Bosses are still beastly to workers

It is characteristic of Tony Blair that he should attempt to assure members of the TUC at their annual conference that "business and employees aren't two nations divided; that's old-style thinking; that's the thinking of the past". In the same way, his Third Way pamphlet, published last year, told us that we could have "patriotism and internationalism", "entrepreneurial zeal" and "social justice", liberalism and socialism. So we can, but the whole story of 20th-century western politics is about the precise balance between these ideals. Likewise, to say, as Mr Blair does, that bosses and workers have "common interests" is an observation that is almost breathtaking in its banality. Yet day by day, the interests of the two sides are still frequently opposed. Old-style thinking may well have been too simple and too pessimistic. But Mr Blair's implied new-style thinking tries to dissolve perfectly natural conflicts in a miasma of good intentions.

The past 20 years, far from showing that employers crave partnership with workers, suggest that capital, if left to itself, just throws its weight around mercilessly. (The previous 20 years, arguably, showed that the same was true of labour.) As a new study from the Joseph Rowntree Foundation puts it, employers have tried to "collectivise effort and de-collectivise risk". Employees are expected to be "totally committed to organisational objectives": to take on more responsibility, to put in unpaid overtime at short notice, to change their working practices at the company's whim and generally to go smilingly and uncomplainingly about their assigned tasks, occasionally saying "aye, aye, sir" to managers rather as their great-grandfathers did in 19th-century family firms. (New-style thinking often turns out to be a retread of some old-style thinking that everyone has forgotten about.) Employers, meanwhile, expect to lay off workers, not just when adverse business conditions or technical change dictate such action but also when the prospect of a merger or some other corporate restructuring offers a few quick bucks to shareholders (and probably more share options for top executives). They expect to do so, moreover, without union interference and without rules of the "last in, first out" variety. Some partnership, some common interest!

Against this background, Mr Blair's comment to the TUC - that employers should not "ride roughshod over their staff" because "they will do best when they take their staff with them" - entirely misses the point. Some companies have no intention of taking their staff anywhere with them, and intend to make profits by smartly dispensing with their services.

The Rowntree researchers, who studied 20 workplaces in detail, conclude that, with managers under increasing pressure from competitors and shareholders, unions are needed more now than ever before. The harder a firm exploits its workers, the more shareholder value it delivers and the more it can steal a march on its rivals. In a form of Gresham's law, the researchers say, "bad labour practices drive out good". Further, as Richard Sennett, the American sociologist, has observed, the habit of modern management, in both the public and private sectors, is to lay down rigid objectives from the centre, to give individual employees maximum responsibility for delivery and then to keep them short of resources to do the job. This may, in the short term, be a good recipe for higher productivity, but it will eventually exhaust many employees, driving them to mental illness, neglect of children or family break-up. Some companies have begun to accept that they should minimise damage to the natural environment; very few think about the damage they may do to the social environment.

New Labour has not entirely ignored these concerns. On the contrary, it has many things to be proud of: a statutory minimum wage, union recognition (where members vote for it), better protection against unfair dismissal, the prospect of limits on weekly working hours. But the implementation has been pragmatic to a fault, with ministers apparently fixing the minimum wage, for example, at a level that would leave employers only mildly indignant and unions only mildly disappointed (because at least the principle has been established). Ministers need to think much harder about where the balance between capital and labour should lie and, in particular, about whether company law should place duties on firms beyond the simple maximisation of shareholder dividends. In other words, if Mr Blair wants less old-style thinking, he must quickly improve the quality of his government's new-style thinking.

This article first appeared in the 20 September 1999 issue of the New Statesman, Men vanish from the universities