Ted Grant

A socialist policy for Labour

Source: Militant pamphlet (October 1965)
Transcription: Francesco 2010
Proofread: Fred 2010
Markup: Niklas 2010

“Like every radical government before it—and it is true not only of the Labour governments since the Second World War but also true of the Liberal governments before the First World War—it has to face this tremendous; conspiracy of those who have and who lived by having, rather than earning. Throughout history no privileged group has ever surrendered without a fight and usually that has meant without any holds barred…” (George Brown)

Harold Wilson, George Brown, Jim Callaghan and other leaders of the labour movement made searing criticisms of the policies of the Tories, in the House of Commons, in general propaganda meetings, especially during the last general election campaign.

All these criticisms can be summed up in the quotations given below from the speeches of Harold Wilson in Parliament. On July 18th 1961 Wilson said

“Surely the government has learned by now that when one restricts production, whether by hire-purchase restrictions, interest rate policy, or any of the other techniques they have used, the result is not a fall in prices but a rise in unit costs, and that means higher prices. Surely they have learned that lesson by now. Yet here we have a sharp rise in the cost of living. Prices, costs, fear of the wage spiral, all at a time when, by common consent, export markets are becoming more competitive day by day.”

And again:

“of course he had to satisfy the international banking community by masochistic and irrelevant cuts in our standard of living, harmful restriction and needless increases in our costs and price structure, because he believes that international speculators are impressed only by actions which in the long-term harm the economy.”

They made a devastating indictment of the “restrictionist”, “blind alley” and “vicious circle” “stupid” policies of the Tories. During the course of the whole period of this Labour government, Wilson and the Cabinet have staggered from one expedient to another. They have, in reality, adopted far more “restrictionist” and “blind alley” policies of “stop-go” than even in the worst phase of the Tories under Selwyn Lloyd.

Why has this happened, and what are the consequences going to be for the Labour government and the labour movement in the future? Every worker in the trade unions, the co-ops and the constituency parties must ask himself this question. Who is to guarantee that even worse measures will not be undertaken by the government in the future? Already there has been the threat of legislation to restrict the rights of the trade unions in collective bargaining. One Tory expedient after another is being adopted.

It cannot have the result that Wilson and the other leaders desire any more than the measures of Selwyn Lloyd solved the same critical problems. The difference being that the world economic situation is far more difficult than at the time that the Tories acted in this way. What then to do? What policies to adopt? This is the fundamental problem facing the movement.

For decades now, airy solutions have been advanced. The labour movement has the strength and the power to win over the majority of the people, first to understand the problems, then the need for socialist solutions. But first the active workers in the movement must be equipped with an understanding of the causes of the crisis and the only way it can be solved in the interests of the working class, and not of the capitalists.

The indication of the changed position of British capitalism particularly under the rule of the Tories, lies in the fact that as late as 1950, 25 percent of the world market was under the control of the British capitalist class. In 13 years of Tory rule this was reduced to 13 percent of world markets, during this period in other fields too, the same process took place.

One of the main causes of this collapse in the power of British capitalism has been the decay of British imperialism itself. The shelter that they had in the Empire has now gone. In the period before the Second World War, with the pound sterling of Britain [and] the British empire, (but also semi-satellite empires of Britain at that time, such as France, Italy, Portugal and Belgium,) the British capitalists could shelter behind the protection of the market that they possessed. Now the situation has changed; the colonial peoples have been struggling for their independence. No longer does Britain directly dominate the economy of these countries by military means and from that point of view has to compete on more even terms with the other capitalist powers. Entrenched behind high tariff walls, entrenched behind the control of their Empire, the British capitalists had deliberately prevented the modernisation of the economy because it would not have paid them.

Less is spent on education for example, than in any industrial country in Europe, in relation to income. Only fascist Spain has a worse record in this regard. Russia, formerly backward Russia, spends 16 times as much on education, 4 times as much per head of population as Britain. Germany has twice as many university students as Britain. In the sphere of the growth of the national income, Britain has the worst record, apart from Belgium, of any of the industrially developed states of Europe or of the world. 2.5 percent a year was the increase in the economy on the average in comparison with the 3.5 percent of America and a far higher percentage in Germany, in France, in Italy and in other countries. Every two years since the end of the war there has been a crisis in the balance of payments. This crisis is caused by the diseased nature of the British economy. In the years before the war, there was a deficit in the balance of payments. In 1938 for example about £900 million was imported and only about £500 million exported. The balance was made up by investments abroad, shipping, insurance and banking. By these means the economy was kept in balance. Since the war, this has not been so.

The steel industry on which the question of nationalisation has come up in the recent period boasted that in 1964 they had a record production of 26 million tons. Yet in 1950 Britain had been the third industrial power in the world and the third producer of steel. In 1963 she had become the fifth industrial power so far as the production of steel was concerned. 26 million tons of steel were produced in Britain as against the 38 million in Germany and the 40 million of Japan. Backward Japan has now outstripped the industrial might of British capitalism. Japan is the third, Germany the fourth, and Britain now only the fifth industrial power of the world.

Russia produced over 85 million tons of steel in 1964. Yet, in 1929 Russia produced 4 million tons against Britain’s 14 million tons. In this way the superiority of state ownership and a plan is demonstrated even in a totalitarian system with all the inefficiency, corruption, and mismanagement that this means. Russia has completely outstripped the power of British capitalism, on the basis of a plan and on the basis of the nationalisation of the means of production. Last year Russia produced more engineers, technicians and scientists than the rest of the world put together. All these facts demonstrate that the argument against nationalisation and socialism, assiduously put forward in the press, and in the propaganda of the ruling class is patently false, and has demonstrated its falsity, in the language of figures; in the language of steel, cement, and the other means of production.

25 years ago, Britain, apart from America, New Zealand and Australia, had the highest standard of living in the world. At that time the standard of living in Germany was 50 percent or 60 percent of the standards of the British people. In Sweden the standard of living is now 30 percent higher than in Britain. In France the working class has won equal pay for women; in this respect Britain and the British workers are still lagging behind the achievements of the French workers and of the workers in Europe.

Now we face the position where the standards in Germany and in France are as high or even higher. In the social services and in pensions too, Britain is falling behind. As far as unemployment pay is concerned, for example, it is about 20 percent of the average wage in Britain, whereas it is about 80 percent of the average wage in Holland.

It is true, nevertheless that the absolute standards of the British working class have increased in the last 25 years. This is due to overtime working, women working, bonus schemes, and of course to full employment. In the past, the British capitalists never tired of speaking of the lazy British workman. Now we have the situation where the hours worked are higher in Britain than any of the other industrial countries in Western Europe.

When one considers the productivity of labour the working class in Britain is relatively more exploited than they were before the war. Even if the absolute standards of the working people have increased, we have the shame of the exploitation and super-exploitation of women and youth. Whereas the average wage for men is about £18 0s 0d including overtime, that for women is only about £9 15s 1d per week.

The rich get richer

Under the control of the Tories, rents, interest and profit have increased enormously. In the last 18 months of Tory rule £3,000 million was made on the stock exchange in capital gains. With a cut in surtax, nearly £1,000 million per year has been given in concessions to the rich under the Tories. Undoubtedly, in spite of the relative decline of British capitalism the rich are richer than at any time in history. The slogan of the ruling class seems to be: eat, drink and be merry and to hell with what happens tomorrow. The reason why Britain has been falling behind is not at all the demands of the working class; not at all the refusal of the working class to work; the real reason has been the failure of the ruling class to re-invest the money which is squeezed from the unpaid labour of the working class. Industrial investment in Germany has been 25 percent of the product per year, in Japan 30 percent, in Britain only 15 percent including the investment of the state industries.

Here, let us point out, that the Tories are not at all against state expenditure, not at all against the intervention of the state. They want the intervention of the state for the benefit of the ruling class, for the benefit of the capitalists and not at all for the benefit of the people as a whole. Under the Tories and, unfortunately, it still continues under the Labour government, nearly £400 million per year is still given in subsidies to the capitalists. Steel, cotton, the big farmers, whole sections of these, have continued to receive subsidies from the state. Even today two-thirds of industrial research, takes place in government, controlled establishments, or is financed by the government.

In relation to the machine tool industry which is the key industrial centre of the economy we find Mr. Asquith (the head of the biggest machine tool company in the country, which had about 60 percent of the market in machine tools under its control), bluntly declaring in the Annual Review of the Financial Times 2 or 3 years ago, that it would not pay machine tool manufacturers to automatise the production of machine tools because the market was not big enough. As a result British machine tools production still proceeds on the basis of batch and not mass production, and is 50 years behind the times, 50 years out of date.

The machine tool industry, which is the key industry, continues in that particular sense, to sabotage the development of the economy in Britain. In every other industry machine tools play their part; in the engineering industry in particular, and now more machine tools are imported than are exported by Britain. This is the result of the selfish calculations of the machine tool owners, and in this respect, they are no better and no worse than any other section of the capitalist class. In the production of computers, which were invented in Britain, Britain has fallen far behind her competitors, in America in particular, but also in Germany and other countries. Now the computer manufacturers are demanding a subsidy for improving the production of computers, and this has just been given by the Ministry of Technology, under Frank Cousins. This amounts to £15 million.

We have the situation where Russia, Poland, East Germany and Romania—countries 20 to 30 years ago [based on] agricultural production—will now be producing machine tools on a mass production basis on such a level that they will be able to flood world markets in the next 5 to 10 years.

According to the report of a commission of American and of British professors who examined this situation, these machine tools will be able to be sold on the world market at 40 percent below the cost of production in Britain.

The real decline of British capitalism, in the past the workshop of the world, is indicated by the crisis in the balance of payments. The British capitalists are beaten on the home market in the selling of washing machines, TV sets and of other manufactured products. The real cause of the crisis lies in the fact that the manufacturers in Germany, in America and in other countries can beat the British capitalists on the home market in Britain, by selling below the price charged by the British, in spite of the fact that Britain, apart from America, has the highest tariffs in the world. In shipbuilding Britain before the First World War was the major shipbuilding nation of the world. She has now fallen behind Germany and, in particular, Japan.

Now, the interest on the national debt for which we are paying, not only for the last war and the First World War, but even the Crimean War, amounts to approximately £1,000 million per year at the present time.

This is the situation which faced the Labour government at the time it came to power. In order to maintain some sort of competitiveness, the ruling class tried to put the expenses of the crisis of their system on to the shoulders of the working class. The Tories introduced the incomes policy. The reason for this is that in a period of full employment the working class is in a strong position. They have a sellers’ market for the sale of their labour power. This gives the opportunity for the working class to gain concessions and this explains the propaganda of the capitalist press, against the unions, against “restrictive practices,” in other words, those concessions that were gained by the working class and the unions in the last 100 years. The attempt to operate a policy of wage restraint is precisely dictated by the enormous strength of the working class.

British capitalism fails

The £800 million adverse balance of trade was caused by the failure of the British manufacturers to face up to competition from abroad. After the Second World War with the first post-war majority Labour government, we had the situation where the ruling class was compelled to accept the nationalisation of transport, railways, gas, coal and electricity. They reluctantly accepted this, because there was no other way in which these industries, ruined and neglected by the owners, could be modernised. Only the nationalisation of these industries led to the modernisation of coal and the beginning of the modernisation of the railways, of electricity and of gas. The reason why the Tories only denationalised steel and road transport, was because these industries could make a profit whereas in the other industries no profit could be made.

When one considers the enormous sums required to modernise these industries, it can be understood why it is that the Tories did not suggest the de-nationalisation of the railways, which were already being subsidised and running at a loss in the years before the Second World War. The lies about the nationalised industries, (which have not been sufficiently combated by the labour movement) were used for the purpose of disseminating the myth of the efficiency of private enterprise. Yet, even today the increase in prices of the nationalised industries has only gone up one-third in comparison with that of industries under so called private enterprise. In steel for example, from having under the last Labour government the cheapest steel (apart from South Africa and one or two other industrial countries), British steel is now among the dearest in the world.

The basic cause of the crisis of British capitalism, a cause which is recognised by the Tories themselves, even by the Tory leadership, lies in the monopolisation of British industry. The British economy is more monopolised than in any other country in the world. In the 1959 election programme of the Labour Party they referred to the 600 monopolies that controlled two thirds of the wealth of the country. These 600 monopolies in the last few years have been reduced to 400 monopolies and these, together with the banks and the insurance companies between them control more than two-thirds of the wealth of the country. ICI, Lever Brothers, Prudential and others, these are the real rulers of Britain at the present time. The Prudential Insurance Company alone has an income of £1,700 million per year, more than the state budget of Belgium—this for one company!

These parasitic monopolies operate rings and ramps for the purpose of maintaining artificially high prices, and it is by these means that the inefficiencies of British capitalism have been preserved. As we have explained, the capitalists and the Tories are not against state intervention. They are for the intervention of the state for the benefit of the monopolies and big business. In steel for example, where they are opposing the nationalisation of the industry, nevertheless the big steel plant at Colvilles was lent £60 million by the Tory government, at a nominal rate of interest, for the purpose of building a modern steel mill. The ruling class is not above getting national assistance from the state but instead of the miserable handouts that are given to the sick, the old age pensioners, and the unemployed, their national assistance, runs into hundreds of millions of pounds. We have the scandal of the racket in aircraft. In the last 10 years the state has provided the aircraft industry with £4,000 million out of £5,000 million invested. The state provides the money and the four big monopolies in the industry garner the profits.

One of the main causes of the crisis of British capitalism lies in the enormous sums of money being wasted on the armaments industry. Over £30,000 million has been wasted in a period of 20 years. This in a vain attempt on the part of the British capitalist class to keep up with the super powers of American imperialism on the one side, and the, Russian bureaucracy on the other side.

In the scandal of the TSR 2 is indicated the crazy attempt of British capitalism to maintain its power in the world through armaments. The armaments manufacturers, and in particular the aircraft manufacturers, are drawing enormous profits from the economy, for goods which are obsolete almost when they come off the production line. This would certainly have been the fate of the TSR 2, on which £1,000 million has been wasted.

Not satisfied with the enormous sums of money spent by the state on research on which so-called private enterprise is parasitically dependent, they are demanding more from the Labour government. What function is fulfilled by so-called private enterprise, when all the enterprise, all the research, and all the discovery, has to be made from funds provided by the state? In the months and years before the election, all of these points in one form or another were made by Wilson, by Brown and by Callaghan. In particular, an indictment was made of what Wilson termed the “stop-go policy”. The stop-go policies Wilson pointed out, were leading to a situation where Britain was far behind, where it was impossible to develop production in the way it should be developed, in which the resources of the country were not being used to their fullest extent. Wilson, Brown, Callaghan and the other Leaders in the Cabinet at the present time, in their indictment of the policies of the Tories, promised that this state of affairs would be ended, that the disgrace of the 2.5 percent increase in production on the average would be replaced by at least a 4 percent growth of the economy itself. It was on this basis that the Labour leaders answered the jeers of the Tories as to “where the money was to come from” to pay for the extensive programme of social reforms which were announced by the Labour leaders, the guaranteed minimum wage, guarantee of low interest rates for housing and for mortgages, the guarantees in relation to pensions, the building of roads, of schools and hospitals. These reforms would cost anything from £1,500 million to £2,000 million. These were to be guaranteed by the growth of industry itself.

When the election results were announced Wilson declared (and in this he was perfectly correct) that a majority of five was absolutely sufficient; a majority of one would be sufficient in order to carry out the programme which had been announced by the Labour leaders.

At the elections the Labour Party secured a slightly lower poll than they received in 1959 in spite of the fact that the electorate had increased by a million or so. The reason Labour won this election was the fall in the vote for the Tory Party, the collapse, in the Tory vote of 2 or 3 million. These electors who had previously voted for the Tories on the basis of the experience of the last 13 years of Tory rule, now either abstained or went to the Liberals.

When Wilson came to power on this basis he made it clear that his programme would be carried out. In the eyes of these people it seemed as if the Labour government really meant business, really meant to carry out a radical change in the organisation of society. This had an effect on that politically backward section of the working class who vote for the Tories and the Liberals; it had an effect also on some sections of the middle class, the overwhelming majority of whom traditionally vote for the Tories. According to the Gallup poll, had an election been held some weeks after the general election, the Labour majority would not have been five: it would probably have been anything up to a 100 or 150. This support was gained through the apparent willingness of the Labour Party leadership to tackle the ills of Britain through radical means.

“Stop-go” economics

This is the tragedy of the Labour government at the present time. We Marxists, those who support the programme of the Militant, warned the labour movement in the years before the election, that so long as 20 percent of the economy remained nationalised and 80 percent under the control of the capitalist class, the 80 percent under the control of the capitalist class would dictate to the 20 percent under the control of the state and not vice-versa. We warned that it was an illusion on the part of the leaders of the labour movement that they understood capitalism better than the capitalists. We pointed out that the indictment that was made by Wilson, Brown and Callaghan and the other leaders of the movement against Maudling and Selwyn-Lloyd in their “stop-go policies”, in their wage freezes, in their attacks on the standards of the British people, was incorrect. This was not caused by eccentricities of individuals. The capitalist class, in so far as production would result in profit, would obviously produce to the maximum extent possible, under the conditions of private ownership of the means of production.

The crisis was not caused by individual decisions on the part of Tory ministers. The policy that was carried out by Selwyn-Lloyd, the policy which was carried out by Maudling, was dictated to Maudling and Selwyn-Lloyd by the situation of British capitalism. This was not determined by the fact that the Tories were in power. We predicted that unless the Labour leaders were prepared to make serious inroads into capitalism, were prepared to take action against the capitalist class, then, inevitably they would be compelled to operate in exactly the same way as the Tories had done; we warned that Wilson, Brown, Callaghan and the others would not dictate policy to the economy, but on the contrary, the economy would dictate policy to them!

Now, we see the results of the attempt to compromise with the capitalist class. The Labour leaders had announced in the period before coming to power that by means of a gradual and slow transformation in the social system (painlessly, apparently) gradually the conditions of the working people would be improved, by nationalisation of steel in this Parliament, by nationalisation perhaps of engineering in the next, and so on. Over a period of generations, gradually the social structure of British capitalism would be changed; gradually and painlessly we would have a movement towards socialism in Britain. Unfortunately it is impossible to work on this basis. The 80 percent of the economy, the private ownership of the land, the banks, of the most productive part of the economy in manufacturing industry, is the determining factor in the policies of any government.

It is true that the Labour government has introduced some useful reforms in abolishing prescription charges, in establishing security of tenure for thousands of private tenants, and in increasing pensions, and in this has received the backing of the whole of the labour movement. But even in the case of pensions the 12s 6d increase had to be postponed for six months due to the pressure of the international bankers. During this delay costs rose enormously and partly whittled away this increase. Needless to say no such postponement was made in the massive increases in MP’s salaries.

But within a few weeks of the Labour Party coming to power, they were compelled to raise interest rates, to put a surcharge on imports which had the immediate effect of raising the cost of living and raising prices. Only by these means could the feeble British manufacturers hope to put a freeze on the import of goods from abroad. It is the import of manufactured goods which is at the root of the problem and not at all the import of raw materials and foodstuffs which is absolutely necessary for Britain. Britain still remains a country which is tied, more than any other, to the world market.

Wilson seems to imagine that to call a thing by another name changes its nature. Lloyd and Maudling spoke of a wage freeze. Wilson put forward the idea of an incomes and prices policy, but we see that the prices policy announced by brother Brown is not worth the paper on which it is written. The increase in the cost of living since the coming to power of the Labour government has been 5 percent. A bigger increase in a like period than within the last 10 or 15 years. It is true that the Labour leaders were faced by deficits of £800 million which had been accumulated by the Tories in the balance of trade in the previous years. But the only way in which they could have dealt with this from a socialist point of view would have been by launching an attack on capitalist ownership. Instead they attacked the standards of the workers. They slapped down the import surcharges and then they put £600 million of taxes on the consumers. This has been followed by further attacks.

Baying and howling from the City

The reason why the government has had to behave in this way is because they were not prepared to stand up to the bankers, to the industrialists and to the vested interests of rent, interest and profit. They have capitulated to the pressure of the capitalist class; they have out-Selwyned Selwyn-Lloyd, they have out-Maudlinged Maudling; they have carried on in exactly the same way as the Tories would have done. Maudling in an indiscreet moment pointed out that in the “in-tray” at the Treasury were the measures, taken by the Labour government, that had already been prepared by the Tories if they had won the election.

What then is the point of electing a Labour government unless the government is prepared to take measures, drastic measures, entirely different to the policies carried out by the ruling class themselves? When at first it appeared that the Cabinet was not prepared to capitulate to the pressure of big business, we had the situation where the bankers in the City of London, where Sir Halford Reddish launched an attack on the Labour leaders as if they were roaring red Bolsheviks. In his annual report published in all the “top” papers on May 17th of this year Sir Halford said,

“I said last year that the election of a Labour government embracing socialism would be a disaster for our country and so it has proved…If the bath is overflowing it is not much good baling out with the soap dish. The thing to do is turn off the tap. And the tap in this case is excessive government expenditure. But it is difficult to imagine any government whatever its political colour, and much less a socialist government, resisting the temptation to bribe what is s largely an economically un-informed electorate, as long as there is universal suffrage…Our so called full employment really conceals much under-employment, with far too many cases of two or three men doing work which could and should be done by one man. A little more work all round and less talk of leisure and our export problem would soon be solved.”

In the City of London, according to the Economist the bankers and the industrialists were going around bleating about the Bolshevism of Wilson and the “Bolshevik government” which existed in Britain.

They conducted a tremendous attack on the Labour government demanding that expenditure, “the wasteful expenditure” of the Labour government should be cut. More of the resources of the country should be allowed to go to “private enterprise” to the industrialists, for the purpose of investment. We see the crisis that arose at the time of the cuts in the orders to the aircraft industry. We see what is wrong in the attitude of the Labour leaders and of the Labour government, in the way in which they have approached the working class on the one side, and the way in which they have approached the ruling class on the other. For example, at the time of the crisis, with the cancellation of the TSR 2 contract, we had the situation of Wilson wining and dining with the four managing directors of the four monopolies that control the aircraft industry, to discuss the crisis in the industry. Yet, when a shop stewards delegation of the aircraft workers was sent to Downing Street to interview Wilson, he was “too busy” to meet this delegation.

At the same time in the endeavour to maintain the position of British capitalism, Wilson has carried out a policy that has received the applause of all the reactionaries at home and abroad. He has attempted to support the position of the American ruling class in Vietnam and the reason for this is his “East of Suez” policy, a policy of attempting to maintain the interests of the tin, rubber and other monopolists in the area of Malaysia. It is this that has dictated the policy of full support for the criminal policy of American imperialism in Vietnam.

In the endeavour to gain the support of the trade unions, Callaghan, Brown, and Wilson were compelled to put forward the idea of fair shares (even then, in reality, it would have been unfair shares) and equality of sacrifices on the part of the working class and sacrifices on the part of the industrialists and the owners of industry. And yet, when Callaghan as Chancellor introduced the capital gains and corporations tax, such a howl went up on the part of the ruling class as though they were being entirely expropriated. Sir Halford Reddish spoke about “theft” being introduced by means of taxation; and yet a similar law to that which they were intending to introduce, had been in existence in the mighty bastion of free enterprise, America, in the last 25 years. Yet the capitalists were not prepared to allow even this modest measure of incursion into the enormous super-profits that they had made in the period of the last 20 years, while Britain, from a relative point of view, has been going down. If one examines what has happened to the capital gains and corporation tax, to the Finance Bill, one finds that 134 amendments were introduced which entirely emasculated the Bill, turned it into a Bill without any real content, and now the ruling class has said that most of the demands that they were putting forward have been agreed to in the Finance Bill.

To give one example of the amendments that have been introduced, a maximum limit of £25,000 per year in salary was suggested, as one of the clauses, in the Finance Bill. A howl of rage on the part of industry greeted this suggestion. As a consequence this clause has been withdrawn, and as we have seen in the recent case of Harveys, in which Harvey was giving himself a salary of £273,000 per year plus £100,000 in expenses, now unlimited sums can be taken at the discretion of directors and managing directors of industry. The fantastic sum of £25,000 per year was not considered sufficient.

Need for a socialist policy

If one examines the problems of the last 20 years, one can see that the terrible decline of British capitalism has partly been disguised by the economic upswing of world capitalism that has taken place. The fall of British exports would have led to catastrophe in this country had it not been that world trade has enormously increased. It is a smaller share of a bigger cake that is being received by the capitalist class. The decline of British capitalism still continues and unless the labour movement is prepared to take real action against the capitalist class, then we will rapidly have the situation of Britain being turned into another Spain with all that that would mean in the decline of the standards of living of the people, and of the working class. The New York Times and the Herald Tribune, the allies of British capitalism abroad, have openly speculated on British capitalism following the path of Spain. After the loss of her Empire she declined, remaining stagnant economically, socially, industrially and in every other way.

But in the small island of Britain which depends on trade for her livelihood this would mean terrible conditions and terrible standards for the working people. And yet, this situation is entirely unnecessary; this situation is entirely due to the selfish interests, the “private-unenterprise” interests of the capitalist class.

The Labour leaders spoke in the past about the need to “conciliate” the middle class. They demanded a watering down, a dilution of the socialist programme of Labour. Yet when the representatives of 500,000 shopkeepers recently sent a delegation to the Board of Trade to complain about the racket of the manufacturers who waste hundreds of millions of pounds on advertising schemes, they were not received. This was at a time when the small shopkeepers were made scapegoats for the big increase in retail prices. An abolition of the free gifts racket could lead to a cut in the cost of living of 1s 0d or 2s 0d in the pound. Douglas Jay, also, was “too busy” to meet this delegation, yet he can always find time to meet the representatives of big combines, of the big supermarkets, in discussing problems of this particular character.

How then is the labour movement to face up to the crisis of British capitalism? How then is the labour movement to convince the politically backward sections of the working class who vote for the Tories? How to convince those sections of the middle class who have traditionally voted for the government of big business? These sections of the people vote for their worst enemies, for the exploiters of the people, for the agents of big business only because they do not see any real alternative, they do not see any way out of the situation, in which they find themselves. In the past, as any discussion on the knocker, in door to door canvassing would reveal, they have put forward the idea that if a capitalist policy is to be operated, then obviously the capitalists are the people to carry it out; “they have the money, they own the business, they have the education, and they know how to rule”; that is the argument that has been put forward by Tory workers and by the middle class in the past. The only way in which to convince these people would be by means of demonstrating in practise that the Labour government and the labour movement stands for the interests of the people, and is prepared to take drastic measures against big business. This is the only way in which the problem can be solved. Lenin, who in his day was no mean theorist, once pointed out that an ounce of experience is worth a ton of theory in convincing the masses of people of the advantages of socialism over capitalism, of the advantages of the ownership of the means of production by the people over capitalist ownership of the means of production.

How then to face up to the problem? The only way in which a plan could really be operated in the interests of the people, the only way in which a plan could work would be by taking over industry. Let us remember that at a time of boom during the last 20 years there has been so-called, “spare capacity”, and there is spare capacity in many industries, even at the present time. The reason why there is this spare capacity is that the capitalists would not make a profit by producing the maximum quantity of goods. The market is not big enough, either at home or abroad. Therefore, they will not produce the goods which are necessary and which are required.

If the Labour leaders were prepared to carry through the nationalisation of the joint stock banks, the nationalisation of the insurance companies and the nationalisation of the 400 monopolies that control two-thirds of the wealth of this country, then the situation could be radically transformed.

For a socialist plan of production

What is necessary, is for the labour movement to announce a plan of production. To get the engineers, the technicians and the scientists to draw up a plan on the basis of the resources of the country and to draw into this plan not only the people at the top but the working class at the bottom; shop stewards, the representatives of the trade unions, of the technicians, of the small business people, of the small shopkeepers, of professional people, of housewives. Representatives of the overwhelming majority of the population in Britain should be drawn democratically into the discussion of the plan and of how the plan should be worked. The small farmers should be given cheap credits, the small shopkeepers also, housing loans should be granted on nominal interest, council housing free of interest, if the labour movement is not prepared to take this action then they have to retreat to Tory policies. The Labour leaders have been routed by big business. The measures for the control of the economy that they have announced are drastic measures to try and keep down the wages of the working class, drastic measures which will mean enormously increased profits for the capitalists. They have retreated even on the issue of immigration, on the issue of the 800,000 or so coloured workers who came to this country in the search for “decent conditions”, in the search for employment, in the search for a reasonable standard of living. The capitalist class have used these workers in their own interests. Without coloured labour the transport system in this country would break down; the hospitals would break down. Only by the use of coloured labour have the hospitals and the transport system been able to continue to function as they have done in the last ten years.

Now, having used these workers for the purpose of obtaining profit, the capitalist class is quite prepared to appeal to the worst forms of racial prejudice, to the worst forms of chauvinism for the purpose of protecting their profit system.

If at a time when the working class is relatively quiescent, if, at a time when the capitalist class is still continuing to pile up enormous profits—for the purpose of gaining power for the Tory Party—such gentlemen as Sir Alec Douglas Home, Enoch Powell, the so-called man of integrity, Selwyn-Lloyd and other leaders of the Tory Party, are prepared to make use of racial prejudice for the purpose of gaining control, what would they do under conditions when the economy is no longer going forward?

What then is to happen, when, instead of the 20 years economic upswing that we have seen in the last period, this will be succeeded by a downswing of capitalism?

If the reforms which were promised by the Labour leaders, cannot be carried out at a time of boom on the world market, at a time of an increase of world trade, what will happen to this programme of reforms at a time of world recession?

The speeches of representatives of the ruling class, of Mr. McChesney, the Governor of the Federal Reserve Bank in Washington, and of other sober representatives of the capitalists have warned of the dangers of a new and deep economic recession, in the years that lie ahead. A new 1929 is quite likely to take place. The capitalist class have no confidence in the development of their own system and if the Labour leaders cannot cope with the situation when world capitalism is going forward, if they cannot cope with this situation except by taking capitalist measures, what would be the situation if they were faced with a new and deeper economic slump? If they behave and they will behave in the way that they have, on the basis of the crisis of the economy, we will have a similar situation which existed at the time of the MacDonald government of 1929-31 with all the consequences that that was to have for the labour movement. And yet, this situation is entirely unnecessary.

The Financial Times pointed out more than 6 months ago the impossibility of carrying through the programme that the Labour leaders had suggested on the basis of the situation which existed in the economy. Yet if one examines the programme put forward by the Labour leaders, if one examines this year’s agenda of the Labour Party conference one sees how the workers are demanding measures in relation to education, measures in relation to housing, measures in relation to the social services and education which should be easily realisable, but cannot be realised whilst the capitalist system remains in control, while capitalism is still in existence. Even in relation to the problem of housing for example, before the war, Britain had actually reached the production of 450,000 houses a year, now the Labour government has set itself a target of 400,000 houses.

This in spite of the fact that the population of Britain in the intervening period has increased by some 14 million, by more than 25 percent, so that with an increased population, less houses are being built. Even capitalist Germany is building 800,000 houses per year at the present time. And in the Soviet Union, in spite of its former backwardness, in spite of all the difficulties, in spite of dictatorial control, nevertheless in the field of housing, they are building more houses than the whole of Western Europe, Britain and America combined. The reason why they can accomplish this is the reason why it is necessary to take measures against capitalism. What stands in the way of a housing programme is not at all that the resources are not there, but the interests of the financiers, of the landlords, of the landowners, the vested interests of the building employers, all these stand in the way of the production of housing when all the resources for the production of houses are there.

To give one example, when the Corporation of Liverpool wished to borrow £12 million (and that was before the recent freeze on borrowing activities by the councils was put on by the government), they were told that they would have to pay back £50 million, i.e. £38 million in interest—of assured interest, of assured profit for the parasites of finance capital. And yet, it is on the housing question that racialism is based. Instead of the Labour government bowing before the pressure of the racialists, bowing before the pressure of the capitalist class; they should have developed a housing programme of 800,000 or even a million houses a year. This would be entirely possible if one could cut through the entanglement of the vested interests of the capitalists.

Then the racial question could never be raised. It is only the existence of slums and overcrowding, which are a consequence of capitalism, which make this racial poison necessary to the capitalist class. It is not generally realised that Britain still remains one of the wealthiest countries in the world. The amount of wealth that is in existence in the land, the factories and the other resources of production, amounts to more than £100,000 million. If the Labour leaders were really doing the job which they should be doing, they would have explained the crisis to the working class that exists at the present time.

In millions of copies they would have published the statement of Sir Halford Reddish which openly declares the hatred of the capitalists against the labour movement and its programme. They should have published this in millions of copies to indicate the real attitude of the ruling class. Quotations of what Sir Halford really stands for have already been given in this pamphlet.

Plenty for all

At the same time, is it necessary to freeze the wages of the workers? Is it necessary in solving the problems of production to hold the workers in check? The experts of the ruling class have declared that three or four million workers are redundant in the factories at the present time, that the same amount of production could be achieved with three or four million workers less, and this explains the attitude of the ruling class on this question.

If they have not sacked this number of workers at the present time, it is because of their fear of the social consequences, that that would provoke, not at all any fear of the misery that this would mean to the mass of the working people. Whenever they have tried the policy of sackings, whether in Nottingham, whether in Glasgow, whether in Wales, or Birmingham, or any other area of the country, they have met the justified resistance of the workers who do not wish to see their brothers, their mates, their comrades “on the stones” as the expression would have it, living on the pittance of unemployment pay.

And yet, the resources of the country are there to guarantee a full life for all, and this is the conclusion not only from socialist sources but from capitalist sources as well. In the Sunday Times a little before the election of the Labour government, there appeared two articles by an efficiency expert, an American, not at all a socialist or a Marxist. In this he pointed to the millions of workers who were redundant in the factories at the present time; he showed that by organising production more efficiently, by imitating the so-called restrictive practices of the workers and the restrictive practices of management, it should be possible to increase production immediately by about 50 percent. At the same time it would be possible to lower the hours of work in the factories to 4 hours per day and increase production not at the miserly and miserable figure of 4 percent per year which British capitalism has not been able to realise (this is the target put forward by Wilson and the Labour leaders), but a production target of 12 percent per year. He could not understand why production could not be organised on this basis, he could not understand the nature of the system.

If industry had to be operated on the basis of a plan, if we had nationalisation with compensation on the basis of need, it would be possible to increase standards of living and guarantee abundance for all. The miserable pittance given to the old age pensioners, the miserable pittance given to injured workers, the miserable treatment of the sick and the unemployed; the working class would treat even the parasites of the capitalist class far more generously than that. Compensation should be on the basis of need with a maximum of £20 or £25 per week.

If automation is to be introduced into the economy for the benefit of the working class and not to introduce more suffering for the workers, it will be necessary to nationalise these industries and to operate industry on the basis of a plan. Organising production democratically, with the control of industry and of the state, by the masses of the people themselves, it will be possible to increase production in Britain by 20 per cent a year; to lower the hours of work and to build a paradise nationally and then later internationally. What is the alternative? Automation in America is already wiping out more than 2 million jobs a year and that is the explanation of the unemployment of 5 million or so in America, in spite of the enormous increases in production which have taken place in the last few years. Wilson, in his speech in Birmingham, warned the country and warned the labour movement that a drastic process of automatisation of industry could lead to 7 million unemployed in Britain by 1970 and to 30 million unemployed in America.

For an alternative to Toryism

The labour movement must offer the people a clear alternative to capitalism, must offer a genuine socialist programme; this is the only way in which the labour movement can guarantee the development of society and the further progress of the movement.

After nearly a year of the Labour government, instead of the labour movement being on top, we have a new access of confidence on the part of the ruling class, and on the part of their representatives, the Tories. The dropping of Home and his replacement by Heath was intended as a measure to prepare for an attack on the working class, and as an attack on the conditions and standards of the working people; to be more accurate, to resist any improvement in the standards of the people.

In the pages of the Financial Times, the Times, the Economist and other journals of big business we had the complaint that the Labour government had failed to establish an “incomes policy”, by incomes policy they meant a limitation of the incomes of the working class. Therefore they said, the next Tory government would have to take “other measures”. By other measures they meant restriction of the rights of the working class, they meant the restriction of the rights of the trade unions, a limitation of the right to strike, drastic measures to limit the powers of the unions, as they have been limited in America, with the Taft-Hartley Act.

The only way out of this impasse for the labour movement is to carry out a programme of real socialist measures on the lines that have been sketched in this pamphlet.

In the months and the years that lie ahead it will be demonstrated that this is the only means by which housing, social services, education, production, the enlightenment of the people can be obtained, that only by socialist methods, only by taking action on these lines can the labour movement save itself from destruction.