DILEMMA _APTER THE RUN ON THE POUND»
‘By ™ Se ‘Peters.
. LONDON, Dec. 5 -«- Even sooner - than, ‘expected, the brave words: uttered. by the Wilson leadership on its presentation to parliament . have run up against the harsh reality of its self-imposed limttations a3. social-democratic. government. That is, its annaunced, .commitment to reorganize society under capitalism with . qustice for the working population and the "scientific modernization" of the industrial structure have clashed with the. demands of the capitalist: market and the. requirements of the. state: upon which this market rests. --. 4 mar-. ket anda state. set-up which the. Labour party leadership is. Pledged only to reform, not to abolish and replace.
The mere declaration of its intentions -~ in the "Queen's Speech" and in the Budget presented -- was enough to create,a crisis atmosphere on.the stock exchange and in the [financial] City. The: City. gentlemen had stoically borne the widening gap of the balance. of payments: position -- the unchecked growth of imports over. -exporta . = the. stagnation of production and the foreign loans contracted with a free. hand to cover the gap sq.lLong as the Tories remained in White- hall. [the government administrative center]. As soon as the Labour. government was installed, and, took the first emergency measures.to. curb. imports along with social. welfare legislation, the City. fraternity,,.used -the inconvenience - fa. 5. per cent tariff] caused to the financiers! partners abroad as an excuse to stimulate a run on the pound. sterling. They hung onto their declining coupons and .converted. 2S, much of their sterling. holdings as. they could, and this.. pro= cess. became a chain. reaction when their counterparts in the other... European. markets followed suit. Their objective was to force. the | Wilson administration to retract its social welfare measures, steel nationalization, etc., or to compel it to devalue the pound.and in consequence to be overthrown,
For the moment, this objective has not been achieved. ‘The central government banks of the great powers, above all the American Federal Reserve Bank, have come’ to the rescue of the pound; not out of altruism, of course, but in self-protection, The Labour government has: not gone back on its declared legislative program -- but it has shown itself prepared to knuckle under in various and devious ways: *
‘In refusing to speed up payments of ‘the new pension schedules to the old people and’ widows to ease their burdens at the worst time of year; in spreading word that ‘the coming capital gains and corporation taxes would not be much greater than present wealth taxation; in conceding to the delivery of Buccaneer aircraft to the racialists in South Africa, whom Wilson-denounced and anathematized in such fiery terms only the week before; and, of course, in toeing the line on foreign policy issues (such as the Congo airlift) set by Washington.
Formally, however -~ no matter how shamefully the bold words have by now had to be swallowed,.and no matter how empty the grandiose scheme of social change announced by Wilson may now look -the legislative measures called for by the Labour manifesto remain on the parliamentary books. In fact, the story has been told in the usually reliable financial columns of the press (for instance, the Guardian, Nov. 28) that Wilson rejected all demands by the creditors to go back on this program and was preparéd to go to the country in a new election if there were to be such strings attached to the loans necessary to prevent devaluation,
Whether this is true or not, no known commitments were made that have affected legislation already introduced, Does this mean | that the road is now clear? That the international fraternity of finance capital will simply sit by and watch this program being enacted?
' ‘The real truth-is that the official financial centers, above all the American, came to the rescue of the British currency in sheer fear of the snowballing effect its devaluation would have, particularly on the dollar, for with the fall of these "reserve currencies" (which, with gold, form the backing of the whole world credit structure) there was the possibility that ‘this could lead to an international crash as a forerunner of a runaway depression, with unforeseeable results, The builtein stabilizers of "neocapitalist" finance were thus brought to bear on what was otherwise the normal play of the capitalist market to stave off an immediate catastrophe.
‘It should not, however, be doubted that even acting in selfdefense, the American creditors and their partners are any less keen than the speculators and private stock-exchange operators to effect a retreat on part of the Wilson government in its social legislation, They are merely prepared to take their time with such pressures and to enforce a slower pace of attrition. |
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What will the Wilson government do after this threat has be-: come clear? They have seen the run on the pound, and know the meaning behind it. On the gamble‘of- retaining their Tory representatives ine power =- which just missed: -=- the City financiers allowed the financial-crisis. to grow, Now, they were quite prepared to 1&t. the Labour government and with it the ordinary people who work for wages and salaries, pay-up for the Losses, This course was encouraged by) the::most "unpatriotic" attacks of the capitalist politicians and the -.press, “It should be an: object.lesson to the social democrats’ -- and their followers in the ranks -- on how to consider the "national interest." If the leaders have been impressed and learned something, they have still to show it.
But there is. a certain ; amount of aroused reaction outside government circles, in the parliamentary party and in the Bevanite “press which reflects the mood “of the activist rank and file. =
‘There has been an organized protest. action on the pension a delay among the parliamentarians, particularly the.new members, which was summarized’ in the complaint of one of their spokesmen that the government is demonstrating its respectability to the financial community ‘atthe expense of the old and the weak -- ‘an echo of. Wil-— son's and Bevan's complaint against Gaitskell in. former days. :/There is a growing demand on the part of this new parliamentary left wing for regular meetings to exert control upon the government. From the same quarter there has come criticism and pressure on foreign policy. But . nothing cohesive has as yet come to the fore, 7 o+ In the current Tribune, Michael Foot has indeed paised the right’ ‘questions, writing on “The Pound and Politics." Referring: to. the underlying pressure of the. financiers and the reaction of the: government, he says: "To impress stupid people, it is necessary to: take stupid actions. Such an indisputable conclusion surely offers ‘an immensely strengthened reason for removing the wealth.from such irresponsible’ hands, for vastly extended public ownership, for stolal~ ism on a national and international scale."
It is something for a social democrat to draw such a conelusion, even if he has had to wait for a particularly dramatic demonstration of the insanity of the workings of the capitalist system, ‘to make it, It is even more pertinent for him to note: "Democracy must find such intervention intolerable. And as long as such international . financial. power responsible to no one exists, democracy is on a leash, The core of the Socialist case is that it proposes to make democracy effective, that only by the transfer of economic power can genuinely free institutions be protected and established. Rarely has the case been so spectacularly underlined as in the past few weeks,"
: And he. is right again to stress: "We must seek escape from sitoh a perilous situation by all the means open to us. . . It‘would be..g pitiable ‘betrayal of the Labour movement not to bend all our: energies to this task, The survival of democratic government itself
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depends upon our success, wo.
: SO far, 30: “good. ‘Does Foot therefore propose to follow the Logic of these very pertinent contentions? Alas, no -- "But, alas," he says, “it is not within the power of a Labour Government (even with a -larger- majority than four it would be difficult) to make a full-scale transfer of economic power in Europe and the Western world. It is not possible even in Britain itself, given the programme on which the election was fought and only just won." Logic is thus defeated by the parliamentary mystique, or what Lenin disrespectfully but not impertinently<used to call: parliamentary cretinism,
In fact, Foot's own sharp observations point inescapably to the need to break out of the political strait .jacket that an insane capitalism has imposed on: the British Labour movement. Tory politiclans representing the ruling class are never bothered by formal programs in emergencies ~-- they act on the premise that the prime law is survival. For the British Labour movement to survive this crisis, an emergency program, emergency measures, will be required that obviously break through the capitalist framework of the economy and the state,:. There: is no reason why a Labour government should not take such bold initiating. action, why it should consider its past election program. a restriction to it, why it should not view a radical course speeding up the pace of socialist advance as entirely in the spirit of that program in the new emergency.
There is certainly no reason why, the left wing in the Labour party should not demand it, propagate it, explain it, and above all, demand: Take the:mass of the population, the: working elass into the Labour government's confidence. Open the books..so that the whole country can have a look at how the crisis grew under the Tories and -. Geveloped to the present perilous point. Se 7
a ‘That, at would seem, is. the precondition for finding a. way out -of the dangerous: situation developing in Britain. Resolutely purs"" sued, it can inspire and arquse the labour movement in Europe and in the whole Western world to follow suit.
Marxists cannot, like Foot, confine themselves to point ing to the true state. of) affairs, ‘to show: ‘the dangers, and then meekly -apologize for the Wilson government's retreat from the socialist elements of its program,. Their.task is to arouse the Labour movement to bar that retreat, and to prepare for the advance the whole situation cries out for. | ee
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