THE BRITISH LABOUR PARTY'S
"NEW" PROGRAMME
By GEORGE EDWARDS
The Labour governments of the post-war period conducted their work under conditions of full employment and of boom conditions of a world shortage of both capital goods and consumer goods. Consequently they were enabled to carry out a radical programme of reforms and retain the support of the overwhelming majority of the organized working class and considerable layers of the rest of the population. The decline of imperialism resulting from the revolutionary upsurge of the colonial peoples in the East forced British capitalism to relinquish its direct domination of India, Burma, and Ceylon. This could be presented as a "socialist" measure transforming the British Empire into a free association of peoples. The changed position of Britain in the world made. it imperative that there should be a modernization of the decaying basic industries of Britain if British capitalism was to have even a chance of competing on the world market. In the inter-war years, British capitalism, entrenched in its Empire and with semi-satellites such as Portugal, had been content to rest on its own backwardness as far as these industries were concerned. It would not have paid the capitalist monopolists to invest in new plant when they had a relatively guaranteed market with the old, and could not use even the latter to full capacity. Consequently, in contrast with dynamic American capitalism, the British basic industries had been stagnant as far as technological progress was concerned. Now the urgent task was to modernize these industries. The colossal sums required would not have been profitable for private enterprise to invest. the task fell to the state. The ruling class offered only lukewarm opposition to the nationalization of steel, coal, transport, railways, electricity, and gas. But the Labour Party ranks regarded this as the beginning of the socialist revolution.
So with the reforms introduced by the Labour government on the basis of the super-profits being coined by the capitalists: National Health Scheme, improvements in the conditions of the workers, and others. This is the basis for the solid support the Labour Party retains among the masses. But even wards the end of Labour's tenure of office, petus of the radical programme was lost. Under pressure from the capitalists the Labour Party leaders began to retreat. The 1951 election programme definitely promised only the nationalization of the sugar monopoly and of water. In 1955 not even the nationalization of sugar was definitely promised.
This retreat of the Labour Party bureaucracy has reached a new stage with the publication of the programme for the General Election anticipated in 1959 : "The Future Labour Offers You." The background to this policy statement, which is being sold in millions of copies, is the grim state of the economy in Britain. For the last three years the economy has been virtually at a standstill. In 1958 the level of investments dropped. Production has hovered round the same figures as in the previous year. Over half a million workers are officially 1 unemployed and the figure is rising. Hundreds of thousands of workers are on short time.
At the same time fixed national investment has been maintained. The capacity of production of the economy has been increased every year in the last three years by £ 600 million to £ 700 million per year. Meanwhile, according to the January figures, current production is lower than it was three years ago at this season of the year.
The ruling class has advanced a deflationary policy, in the interests mainly of the financial oligarchy in the City of London. They have had as a windtall a surplus of £ 500 million in the balance of payments. And, using this, they have introduced the foreign "convertibility" of the pound to encourage foreign investors to use the facilities of the money market in the City. This will result in increased business for banking, insurance, and the Stock Exchange.
But the basis on which convertibility has been launched is very shaky. The surplus is mainly due to a fall of 8 % in import prices of raw materials and foodstuffs, while the fall in the price of industrial goods exported has been negligible in comparison.
This advantage will turn into its opposite as the primary producing countries have less and less money to spend on industrial goods.
Meanwhile the deflationary measures forced on the capitalists in the last period, and the heightened competition on a shrinking market in world trade, has resulted in the development of substantial unused production capacity, 20% of steel capicity was not in use in 1958, amounting to a loss of 4 million tons. There were 38 million tons of coal lying at the pitheads at the end of the year. The most promising forecasts for the present year do not anticipate an increase in the production of steel over last year, while an additional surplus of 3 million tons of coal is expected. According to The Economist, the "investment 1 Some authorities put the figure as high as 1,500,000. Married women not paying full insurance, dockers covered by the Dock Labour Schemes, and many other categories, are not included in official figures.
boom" in engineering was "over" by the middle of monopolists, the private banks, insurance companies,
FOURTH INTERNATIONAL 1958. In shipbuilding cancellations exceed new orders and Britain has dropped to third place in world production. In building, the total of construction work, public and private, in housing and industry, maintained the level of the previous year or exceeded it slightly.
Chemicals saw the first fall in output since 1952 and a small drop in exports. So also with other industries. It was to give a "shot in the arm" to the economy that the government introduced a relaxation on hire-purchase and banking loans, and lowered the bank rate in stages to 4 %.
As the Labour Party leaders are constantly stressing in their propaganda, between £ 2,000 million and £ 3,000 million of production have been lost in the last three years.
Despite the record of the Tories, so unconvincing has been the alternative offered by the Labour Party that it has failed to make any substantial inroads. It has seemed that the Conservatives might win the next election. The feat of the same party's winning three
43 or any big-business enterprises.
One of the most telling points in the programme is the indictment of the Government for the loss of £ 3,000 million of production in the last three years. And this theme recurs constantly in the propaganda of the Labour Party leaders. But they do not use it to explain the inevitability of such drops under the system of private enterprise. They put forward their propaganda in such a way as to make it appear that it is a wicked preference for unemployment and low production that motivates the actions of the Conserva-
In reality the Conservatives were driven to these measures for lack of an alternative. They are quite prepared to launch such schemes as the easing of hirepurchase restrictions when they think these are the only means of aiding the capitalists to make profits. But they do not run a benefit society. Capitalists produce for profit, not for the sake of production.
The whole basis of the programme is laid on the assumption that by Keynesian measures an "expanding elections in a row has not been achieved for genera- . production" can be maintained. tions in Britain. Now the growth of unemployment has begun to swing the pendulum once again in tavor of the Labour Party. A recent Gallup Poll revealed the parties as receiving approximately the same amount of support.
It is in this light that the programme of the Labour Party for the election must be examined. It is vague and cloudy throughout, but promises a complete programme of reforms on all those points which affect the masses at the present time : Homes, Full Employment, Education, the Cost of Living, Old Age Pensions, Health, etc. There is no aspect which is not covered by the document with lavish promises.
The best comment on this aspect of the document was made by the Times Review of Industry in its December 1958 issue. Warning its readers, who comprise the top strata of business executives, not to take this programme too seriously, it said cynically :
He [ the business executive ] knows well enough that what, on the face of it, looks like an impossible commitment, lavish extra expenditure on education, health, hospitals, youth service and similar admirable objects, has a habit of automatically trimming itself into more reasonable shape on the impact of practical finance...
The document covers up as best it can the retreat from the policy of nationalization, apart from pledging the re-nationalization of steel and road transport, by a vague promise that
If — after full and careful enquiry — other industries are found to be failing the nation, we shall not hesitate to use whatever remedies, including further public ownership, are shown to be most effective.
Hardly a threat to frighten Tate and Lyle, the sugar
If in the past three years industrial production had gone up as fast as it did under the Labour
Government, our national income today would be £ 1,700 million higher.
The Chancellor of the Exchequer this year would be collecting £ 450 million more revenue without adding a farthing to existing tax rates.
Against this tale of waste, Labour sets its programme for expansion:
We shall end Tory restrictions on production.
We shall get the machines and the factories working at full capacity. We shall put the unemployed back to work.
We shall launch a plan for capital investment [...]
Labour is determined to give top priority to the re-equipment and expansion of British industry.
A most laudable aim. And entirely modest when the resources of the British economy are taken into account. But how is this to be achieved ? The authors of the document have a ready answer :
"Through the budget and key controls, Labour will ensure that this vital expansion programme is not held up by lack of money and equipment, or by any timidity [!? ] on the part of managers and investors.
The Labour Party leaders in other words know how to run capitalism better than the capitalists themselves. It is noteworthy that the spokesmen of capitalism are more worried about this aspect of the Labour Party's policy than they are about the promises of reforms which cannot be kept while capitalism remains in existence. The above-quoted Times Review of Industry refers to "the [...] disastrous cheap-money mirage [...] still hovering over some of the academic minds in the movement." And again, indignantly : "It is dishonest to imply that a Labour Government
44 would rapidly dispose of the problem of unsold coal stocks [..]"
The argument of this school of Keynesians runs something like this: they will increase investment in the nationalized industries and thus create work ; they will get back the money in increased revenue. But in the first place 80% of industry is owned by private capitalism and only 20% by the state. The nationalized basic industries cater to the privately owned industries. A fall in production in the engineerindustries means that less coal, less freights, less electricity, gas, and so on can be sold. The same with other industries. So certainly the Times Review is correct in arguing that it would be impossible for a Labour government, any more than a Tory government, to dispose of the surpluses being piled up by the nationalized industries (assuming the present economic system as a basis, of course). To increase these surpluses would be the height of lunacy under adverse economic conditions. For, sical Conservative argument runs, "where's the money coming from?" If from the other industries, by taxing the capitalists or the workers, what would be gained on the swings would be lost on the roundabouts. The capitalists would have less to invest, the workers less to spend (and what would become of the promised improvements in the standards of living?), so that this would cancel out. In any event, with production falling, it would be very difficult if not impossible to increase taxes.
On the other hand the resort to deficit financing over a period would be equally disastrous. That is what the Review of Industry was warning about. Spending money by using the printing press is the best way to create fictitious capital. Over a period the value of money would come into equilibrium with-the increased number of notes (other things being equal). There would be a rapid and chronic inflation, which would undermine, the purchasing power of the workers and create a series of explosive situations without solving the problems of the economy. This would resolve itself, at a slower or faster pace, into the same situation as increasing taxes. Deficit financing would be in complete contradiction with the Labour Party's pledge to maintain the value of the pound.
To imagine that all that is necessary is to give orders to the managers and owners of big industry to employ more people and produce more, is to leave the real world of reality, and to enter that of phantasy. Every capitalist will employ the maximum number of people and manufacture the maximum amount of goods if he can increase his profits thereby. But he will not employ a single extra person, or manufacture a single extra article if thereby his profits will be lessened by producing unsaleable goods.
The Gaitskellian economists have forgotten the A B Cs of socialism: those of Marxism they have never known. Production under capitalism is for the market, and the market dominates the economy. The
FOURTH INTERNATIONAL whole of industry, including the nationalized industries, are compelled to subordinate themselves to the needs of the market. And this must be so as long as the economy is dominated by the needs and interests of big business. The use of the Budget under these circumstances can only be a palliative at best. A palliative which the capitalist governments themselves can also use. The Tory government is taking away the slack which the Labour Party might have been able to use by increasing the expenditure on public works, roads, hospitals, and housing at the present time as well as the previously mentioned hire-purchase relaxations. Clearly use of the Budget will be a pansion of the economy but the limitations of the market. Presumably Gaitskell or Wilson murmuring sweet nothings in their ears will make manufacturers "bold" and "adventurous." But alas the sale of their products will still be the problem. What other controls? In an economy of scarcity and an unlimited market, controls in a capitalist economy can be relatively effective. But even the last Labour government made a "bonfire" of these irksome restrictions as soon as possible.
But in an economy of surpluses the situation is entirely different. Even controls on foreign exchange dealings would be relatively ineffective, for there are too many loopholes. In an economy of falling production what controls could be imposed to force the capitalists to increase production? On the contrary, the capitalists would be exerting the utmost pressure to force the Labour government to retrench all investment schemes in the nationalized industries for which there was no immediate need.
Even the most superficial analysis indicates the hopeless mess in which the policies of reformism will land the Labour Movement in case the Labour Party leaders come to power with this programme.
And yet the solution is so simple. According to the Programme itself,
Today, fewer than 600 giant privately owned firms dominate the production, investment, finance, and trade of the private sector of Britain's economy [...]. The Boards of Directors [of these firms ] are, in fact, responsible to no one but themselves.
Labour believes the time has come when public control must be extended, so as to ensure that the decisions of these Boards, which vitally affect our economy, are in line with the nation's interests.
But "public control" is not defined and nobody knows what it means, especially the authors of the Programme, or presumably they would have enlightened the Labour Movement on how exactly they are going to carry this out. In reality this formula is intended to cover the retreat from the basic principles of the Labour Movement. Instead of grabbing the bull
FOURTH INTERNATIONAL by the horns (ie, taking these enterprises over), they want to throw themselves at its feet.
seizure of these enterprises, plus all the banks, insurance companies, and any other important industry not affected would transform the situation immediately. There would then be the possibility of really planning the entire economy according to the resources involved nationally and internationally. All industry could be integrated to produce the absolute limit of production, given the present level of the productive forces, and to increase rapidly the standard of living and the wealth of the economy simultaneously. This is a road the Labour Party leaders are not prepared to travel.
On foreign affairs the programme is equally barren. A few middle-class platitudes about the United Nations, as the basis of the policy of the Labour Party. "Disengagement" in Central Europe; the handing of the islands of Quemoy and Matsu over to China (and Formosa? U N administration "until the people of the island can themselves decide their own future without intimidation"); a "fresh disarmament conference" : 1 % of the national income to be devoted to the benefit of the undeveloped areas of the world.
All these notions have been shown to be empty so many times in the literature of the Fourth International that they do not deserve the space needed to deal with them in this article. One point, however. On "Defence":
Labour fully accepts the duty to maintain the military defences of Britain.
So long as the world is split into two hostile camps, we must contribute our share to the defence of the West through NA TO as well as fulfill our obligations to the Commonwealth and to the United Nations [...]. When we return to office, we shall at once work for a proper ba-
45 lance within the NA TO alliance between nuclear and conventional forces [...]. But when all is said and done, the only true defence is world disarmament.
Thus a mixture of imperialist policy with gestures towards disarmament is the contribution of the Labour Party leaders to the world problems of our era.
Completely absent is the idea of internationalism and of the solidarity and community of interest of the world working class. No suggestion that the problems of Britain, even economically, are linked with the problems of the workers of Europe, Asia, and the world. No class lead on foreign affairs any more than on home affairs. An acceptance of present national boundaries as apparently established for all time. No vision of the future society, nationally or internation-
Dealing wịth the situation of the British economy, The Economist of 17 Janaury comments gravely, artificialities of the post-war decade are wholly past." The "artificialities" of the political situation are also coming to an end. The cushioning which reformism experienced in the last Labour government will not be experienced in the next. So much greater will be the awakening of the rank and file to the need for revolutionary solutions to their problems.
The workers in the Labour Movement will learn by experience the bankruptcy of the programme of reformism. The cadres of Marxism have the duty of tirelessly explaining to the rank and file of the Labour Movement the theoretical and practical inadequacies of the programme of reformism. Together with the rank and file of the movement they will fight for a Labour Party victory, to demonstrate in deeds that only the programme of the Fourth International can serve the needs of the British and international working class.