Ted Grant

Tories and Workers - The coming clash

Written: Autumn 1970
Source: Militant International Review, issue 3, Autumn 1970
Transcription/Markup: Patrik Olofsson, 2006
Proofread: Patrik Olofsson, 2006

Political perspectives in Britain cannot be understood except on the background of the development of world capitalism. In the last quarter century, in the main industrialised countries, there has been an expanded growth of the economy. The so-called undeveloped areas, formerly colonial or semi-colonial, have fallen behind; capitalism in the present epoch has aggravated the contradictions between the growth of the countries in the West, including Japan, and the much slower growth or even relative decline of the underdeveloped countries. This period has also seen a steady increase in power of the economy of the deformed worker-States, China and the Russian bloc.

Even though there has been a steady growth of the economy in the West, despite minor recessions or small slumps, the economy have been plagued with the illness of inflation. Continually rising prices, partly due to the enormous fictitious capital injected into the economy by arms production and other means have bedeviled the economy.

In addition to arms, there has been the injection artificially into the world economy of dollars, without a backing in the balance of payments. At the same time, the enormous potential of world economy and the world division of labour has been shown even if in a distorted form, by the expansion of the world economy. The increase of world trade, particularly between the industrial powers, has given an added impetus to the development of all the industrialised capitalist economies.

These factors interacting on one another, have given a boost to technology and invention, which in its turn has meant the development of new products and the intensive search for new resources of raw materials and minerals on all the continents. The discovery of such resources in turn has added to the expansion process.

The growth of the economy in its turn has meant an increased power for the working class in numbers and cohesion. The demand for an increased share of the enormous wealth they have been producing is a feature of all the capitalist countries in the West. The wages offensives in Western Europe, Japan and American are an indication of this tendency. Thus the beginning of the revolution in France in May 1968 and the pre-revolutionary situation in Italy are an indication that the growth of the economy by no means solves the problem for the ruling class of relations between the classes. The very explosive development of the economy with all its effects acts as a stimulus to class conflict.

New class battles

This epoch has been one of preparing for new clash battles on the part of a generation of workers, who have never experienced the defeats, and the pessimism induced by these defeats, in the interwar years.

British imperialism economically, diplomatically, militarily, has seen a slow decline in its world position in the last quarter century. Had it not been for the above mentioned factors of world economic growth and the world economic upswing, this would have resulted in a catastrophe. The British Empire has been slowly dissolving. The Commonwealth, from being a source of resources and tribute has become to some extent a burden on Britain. As a market, it has grown more slowly than the industrialised countries at any rate in the ex-colonial and colonial sections. The old Commonwealth has looked towards America rather than Britain, to a great extent, as an economic and military partner. Canada has become almost a province of the United States and New Zealand and Austrialia and South Africa show the same process at a slower pace. Thus the demands and burdens of the old Dominions and the New begin to outweight the connections of the past.

In the past, British capitalist, of course, always looked towards Europe, but always with the policy of the Balance of Power. This has now been shattered by history. Britain has been reduced to just one of the European middle powers, similar to France and West Germany, in contrast to the enormous continental super-powers of America and Russia. The perspective of the development of a mighty China and the colossal development economically of Japan, further accentuates the process of the reduction of British power in the world.

Britain's slow growth

At the same time, of all the big powers, Britain's growth rate has been the lowest. This has meant a steady attrition of power in comparison with her rivals. Not only Japan, but West Germany, has outdistanced her, and France and Italy are rapidly catching up. The futile attempt to maintain British power by enormous arms expenditure has further drained the resources of British Imperialism in the last quarter century. Even so, this expenditure has been an expenditure in effect on scrap.

It is this changed position of British capitalism which has dictated as a last desperate throw to attempt to enter the EEC. Coming late, it is a delusion of British imperialism that they will solve their problems thereby. It is a naked calculation in material gain that dictates the policies of all the Powers.

As far as Britain is concerned, she has to balance up the loss and the gains of entering the EEC. On the one hand, for the great combines of chemicals, electronics, engineering, motor manufacturers, the market of nearly 60 million people in the British Islands (Eire is, in reality, an appendage), is too small. Consequently, they have to find a greater market if they are to expand at the maximum limit of their capacity. Britain has an advantage in scientific research and development, her expenditure alone being equal to two thirds of that of the six Common Market countries. It is in the development of these techniques that she lags behind. The ruling clique hopes that with the spur of the bigger single market enclosed in its own tariff walls, there will be an incentive to invest and thus a greater growth of the economy.

The disadvantages lie in the common agricultural policy which would abolish the advantage of generations of cheap good. In its turn, it will cut off markets in the old Dominions and the New. Deprived of the British markets for food, they in their turn would look elsewhere for the exchange of manufactured and capital goods, and this; Britain would be deprived of certain markets. Thus whether they enter or not still remain in the balance.
The inevitable increase in prices of food and other necessities, which entry would mean, would stimulate even greater demands for wage increases on the part of the working class. Consequently, it would provoke an increasing mood of resistance on the part of the workers. On the other hand, the inflation continues in Britain as in other countries, with steady increases in prices, unabated. Thus, staying out of the Common Market cannot solve the problems of British imperialism, while entry on the other hand, though in the interests of the most modern sections of the monopolies, could not solve these problems either.

Conservative victory

The victory of the Conservatives in the General Election was a reaction to the Tory policies of the Labour Government; policies adopted under the direct pressure of Big Business in the City. The burdens of increasing taxes, while subsidising the investments of the entrepreneurs; the whittling away of some parts of the Welfare State, with increased prices for school meals and charges for medical prescriptions; the Prices and Incomes policy with its attempt to limit wages while profits were increased, were all indications of this capitulation to Big Business.

All this, plus the constant pre-occupation with the balance of payments syndrome, were all indications of the lack of vitality of British capitalism. While American with enormous production and power, can (of course temporarily) ignore her enormous deficits and still proceed financially and economically as the worlds" major power, Britain is immediately affected because of her now puny weight, in comparison with the past, in world affairs. She is a lesser power and has dropped from third position to fifth in her industrial output and capacity. France is now within challenging distance.

This explains the feverish preoccupation with the balance of payments. The deficit in the balance of payments in its turn is caused by the competition in manufactured goods on Britain's home market, where despite the second highest tariffs in the world - America's are the highest - Britain is often defeated in price by her main rivals.

All these factors are a demonstration of the fact that Britain has been pushed down to the level of the lesser powers. It is on this background that developments after the General Election must be viewed. The Tory program, leaving aside the demagogy about prices, can be compressed into that of "dealing" with the Unions and lowering taxes on companies, corporations and the rich.

"Deliberate government"

"The Banker", journal of finance capital, commenting in its July issue on the Conservative election victory, declared: "He Heath has been given a mandate to reverse the interventionist policies of the last six years, to restore incentives, at personal and commercial levels, and to instill greater competition through industry .... The failure of the economy, and particularly industry, to gear itself to a high-growth pattern. There are many strands to this: low investment, failure of industry to regroup, poor labour relations, a low savings ratio...."

This, of course, was the real meaning of the Tory program. Coppers to the workers, millions to big business and the directors: a program operated by the Tory Government in Australia in boom conditions. This provoked the first mass political protest strike on August 25th of 14 million Australian workers. Any attempt to carry through the Tory program will provoke a storm within the Labour and T.U. Movement in Britain.

It is the reaction to this significant strike which probably resulted in the changed attitude of the Financial Times against a "Hard" attitude to the workers dealt with further on in this article. It is significant that not a word about this strike appeared in the popular press: It obviously aroused apprehension that the British workers might follow this example, when and if the Tories as they intended, introduced a similar budget.

The Tories came to power with a promise of a new style of government. Gone were to be the frantic scurrying of the Labour Government. Deliberate government would be the watchword. This government has reflected itself in inaction and "deliberate" enjoyment of the part of the Prime Minister and his Cabinet. Deliberate government has meant deliberate nothing, as the capitalist press has cautiously complained. In the light-mindedness and inaction of the bourgeois leaders are reflected the decay of capitalism itself. For fifty years, they have suffered one staggering reverse of fortune after another, in a monotonous and gloomy decline. The nitwit aristocrat Home is followed by the nitwit upstart Heath. The leaders of the bourgeoisie, in this period, reflect the impasse of the system.

The only sections of the program of the Tories which are intended seriously, are those which intend to cut down on the expenditure of the nationalised industries. The Tories intended to hold down the price increases of the nationalised sector for the benefit in the main, of Big Business, the main consumers of transport, electricity, gas and fuel, giving only a marginal benefit to the individual consumer and housewife. Even in this, it is doubtful whether they can succeed in carrying it through to a conclusion. As far as the prices of general commodities are concerned, they have decided to do nothing. Thus, those housewives who were deceived into voting for the Tories on the issue of rising prices will be the hardest hit by the policies of the government. The defeat of the Labour Party in the election can be partially explained by the overweening confidence of the Labour leaders, who in statesmanlike fashion, hardly put forward any policies - let alone Socialist policies - in order to provoke the necessary enthusiasm and confidence of the rank and file. The defeat was more of a setback or a secondary defeat, rather than a debacle. It is due in the main to the apathy and abstention of the more politically backward layers.

In the General Election, the Conservatives gained 13,106,965 votes; Labour got 12,141,676 and the Liberals 2,109,218. The Welsh and Scottish Nationalists, C.P. and various freak candidates received a total of 900,473. The Conservative vote rose by 1.600,000 and Labour's fell by 900,000. There was a 72% turnout in comparison with a 75.9% turnout at the last election. Labour's vote fell in spite of the increased electorate and the fact that youth of 18 voted for the first time.

The organised workers are not at all demoralised by the political defeat. They have turned their attention to the industrial front and the struggle for higher wages and better conditions. This militant mood has already developed out of disillusionment with the policies of the Labour Government. The measures which the Tories have projected for the future can only strengthen this mood. The Jeremiah of the Tories on the question of strikes will merely provoke even bigger strikes on the part of all sections of the working class.

The demands of the transport workers, of the miners, railway men, the engineers and public employees of anything from 15% to over 30% increases are an attempt to make up for the lost wages due to the prices and incomes policy. The dock strike was intended to mark a stand on the part of the government. The Conferederation of British Industry and the Government itself announced that the economy and the country could not stand further "wage inflation", i.e. an increase in the share of the wealth produced by the workers, or an attempt to catch up on the steadily increasing prices.

Retail prices are steadily rising. They rose 3½ % in the first seven months of this year according to the official index which is artificially weighted not to show the extent of price rises. The poisoned argument of the capitalist press that increased wages cause increased prices is falsified by the admission of the financial press - not read by the workers - that devaluation and world inflation are having their effect in Britain. It is not prices that chase wages but wages that chase prices!

The politically illiterate and savage journal of the right wing Tories, The Economist, was screeching for action and a firm stand to withstand the Dockers claim, even at the cost of a long strike. This, for the purpose pours encourager les autres (to encourage the others) as a lesson to the other sections of the working class. In more decorous terms, the Financial Times and the Times editorialised in the same vein. The actual strike of the Dockers was greeted with delight by The Economist - its effect on the balance of payments was considered secondary, from the point of view of these ruling class spokesmen, to that of teaching the working class a lesson, and thus helping safeguard an increased share of the profits for the ruling class. Thus we see it is not the 'country' and its interests that dictate the policies of these loud-mouthed representatives of the capitalists, but the naked and selfish interests of capital.

The Economist, greeted with screams of pain the minor concessions to the Dockers which amounted to 7% increase on their wages. (Of course, this was a major "concession" in comparison with the cast guidelines of 3.5% increase of the Prices and Incomes policy).

Capitalist retreat

Mr. Michael Nobel, President of the Board of Trade, at Cumbernauld on 21st August, gloomily said that "Britain was not in a period of slump but we were very much on the borderline". He declared that number one priority to be the "curbing of inflation" even before solving the problem of economic growth".

The Financial Times for 21st August points out editorially: "taking a half-yearly comparison (of industrial production) the rise in the first half of 1970 as against the second half of last year has been less than 0.5 per cent .... Even (consumer spending increase) is unlikely to bring the rate at which output is rising quickly into line with the underlying rate of increase in productive capacity even if the latter is now somewhat less than has been widely assumed." Thus even the miserable increase in productive capacity cannot be utilised because it would not help to increase the profits of the capitalists. Capitalists are not interested in producing goods because they are wanted but only for the purpose of increasing the mass of profits in relation to the capital laid out.

The TUC and the Labour leadership, pointing out the slack capacity which is not utilised, are making the mistake of asking capitalists, their Government and system, to do things which are not possible. The contradiction of want and low wages, amid the possibilities of plenty, are result, and causes of the problem of the maximisation of profit under capitalism, which is interested in this and not maximum production.

The mood of the working class to oppose attempts to cut living standards or even to prevent improvements in. the standard of living is almost universal throughout the industrialised capitalist countries. The working class in Britain is not prepared to tolerate a disguised version of a Prices and Incomes Policy from the Conservative Government.

The Financial Times of 26th August presents the dilemma of the Government editorially: "The choice is in essence a simple one. The Government can either accept the argument of the National Institute (Economic Review) that there is little the Government can do about inflation one way or the other and that it, therefore, might just as well reflate. If incomes policy does not arrest the rise in British costs relative to those of our main competitors, then sooner or later the exchange rate must take the strain."

The Government's alternative to this specter of a new devaluation, before adopting any new "stimulus" to the economy was first: "We would have to get to grips with wage inflation". It then argues on the National Institute premises that inflation and devaluation "could in time become a vicious circle, with one triggering off the other in turn. But the real argument against accepting inflation is a much more fundamental one. Inflation even at the present rate sets up considerable social, and therefore political, strains. If the rate were to accelerate these strains would become all the greater."

Neither inflation, meaning steadily rising prices, nor deflation meaning depressing standards and leading to even higher unemployment, serve the interests of the working class. What then of the present impasse combining both deflation and inflation! Such is the result of so-called "planned capitalism" in America and Britain. All the high-flown theories which were supposed to have solved the problems of capitalism and explained the post-war economic upswing are shown in all their bankruptcy. (In the next issue we will deal with these questions).

In the first seven months of 1970, more than a millions workers were on strike, about 1 in 25 of the labour force. This is the largest number since official statistics began in 1947. The number of working days lost amounted to 6.05 million. This is double the number of days lost during the-same period last year. As things are developing 1970 could record the highest number of industrial conflicts since the General Strike. The Government and the employers are set on a collision course with the Trade Union and Labour Movement. Because of the complete incapacity of the employers, and the virtual stagnation of the economy, not enough has been invested to put British capitalism in a strong position in relation to her competitors. Devaluation, an indirect attack on standards of living, gave them a breathing space which has not been used to retool. Now the workers are not prepared to accept passively attack: on their standard of living, or to accept the continuation of their present standards. Meanwhile, the Government, while not even pretending to limit prices, has demanded a virtual standstill on "high" wages increases. They have "asked" the chairmen of nationalised industries to resist "inflationary" wage increases. They have "asked" private employers to do the same - of course, in effect the message the employers "ordered" to be given to them.

As the Daily Express of 28th August -outs it: "since the unions have made it clear that they will fight any interference in wage bargaining, mines, railways and local government services could all be disrupted before the year is out."

The TUC reflecting the pressures of the working class, as shown by the election of left-wing leaders in the AEF and T&GWU, has announced in the mild words of Vic Feather, TUC General Secretary, that the Government's efforts to control wage rises were "a misguided and dangerous course of action". According to the Financial Times of 27th August, "members of the TUC General Council have clearly not yet decided how best to react to the Government's imprecise ideas on wages, and accordingly are not pressing forward to a premature confrontation ... The desire not to slide into a major wide-ranging battle was voiced especially by Sir Fred Hayday, of the G&RVU, who stressed that the TUC should not start on a path which could lead to a repetition of the 1926 General Strike".

Thus the right-winger leader tried to scare the TUC with the apparition of the titanic battles of the past. By trying to be conciliatory and placate the Tory Government, they merely embolden it and increase its obstinacy.

The only thing holding the employers and their Government back is the fear of the consequences of social conflict and its effect on their position both at home and in the world. The publicists of the ruling class are warning them of the consequences and advising restraint and comprise. Dealing with the inactivity of the Government, the political editor of the Financial Times, writes: "an all-out attempt at 'union-bashing' would simply produce more problems than it would solve".

The policy of the Government is not "misguided" but dictated by the interests of the employers and the present difficulties of British capitalism. The only thing that would hold them back, at least for a period, is if they saw that it would cost the capitalists more than they would save by the strike struggles and their effect on the economy. The lack of resolution of the TUC can only lead to the employers and the Government believing they can "deal" with the workers with the minimum of damage to the capitalists" interests.

Spinelessness always stiffens the resistance of the employers. If the Government and their publicists and tools in the Press and mass media are hesitating, it is because of the militant uncompromising attitude of the rank and file. Despite all maneuvers and the threats to take action against "wildcat" strikes by legislation, it is this mood which is being reflected in the attitude of the union leaderships, including that of the G&MWU.

Since the Second World War, when it came to the issue of a "showdown" which would mean a confrontation between the classes, the ruling class representatives in the government preferred to retreat. Under Churchill,
Eden and Macmillan, faced with shattering industrial struggles which would have exacerbated class relations and weakened the position of British capitalism abroad, they preferred to give increases. This they could afford to do even with Britain's slow growth, because of the development and expansion of world economy and world trade. Thus, at each stage, the ruling classes preferred to put off the decisions and the grueling struggle to the morrow.

However, the government, under pressure of Big Business, has dutifully raised the question of a showdown with the workers. Meeting with the chairmen of the nationalised industries, Barber, the new Chancellor of the Exchequer, 'offered' full support to their resistance to inflationary wage increases even at the expense of national strikes. 'Summoned' by the Chancellor, the CBI solemnly agreed to make the same recommendations to private industry.

It is for this that Big Business piles up its contributions to the coffers of the Tory Party. There is only one shadow on this comedy of the servant "instructing" his master, of course, not in the interests of the latter, but "of the nation", and that is the attitude of the working class and its organisations. At the time, when he was speaking the strike which has now lasted five weeks, of four thousand building workers on the Shell site at Guesmere Port was taking place.

They refused the offer of 1s6d per hour increase or £3 per week or more, demanding 3s6d. This is a symptom of the mood of the organised workers, and of the difficulties of operating an unwritten restraint on the wages of the workers. Particularly as after the Tories' coming to power, prices have continued to increase faster than before. In the past, the capitalist class could retreat as a lesser evil, because of the up growth of the economy - though this was shockingly low in comparison with its rivals.

Gross Domestic Product
1963 Prices
Average Rate ofGrowth
billion dollars
billion dollars
billion dollars
billion dollars
billion dollars

The gross domestic product rose by only 0.5% between the first quarters of 1969 and 1970, according to the calculations of the National Institute Economic Review of May, 1970.

Pilkington strike

Nevertheless, this increase was sufficient to allow concessions to the stronger sections and the highly organised. But in the last few years, the revolt of the low paid workers has reached the stage of increasingly bitter struggles and strikes. The strike at Pilkington glassworks, which is the first important one involving all its glass factories, was symptomatic of this. It was the first strike at the St. Helens glassworks for fifty years. It involved the right wing Labour town of St. Helens, and the G&MWU. (Partly owing to the intervention of a tendency which the workers referred to as having "socialist measles", in dubbing the G&MWU as a "scab union", they conduced to the formation of an independent union of Glassworkers, thus tragically separating sections of the militant workers from the more politically and industrially backward elements.) This played into the hands of the G&MWU leadership, which, of course was responsible for the situation, by its bureaucratic mishandling and remoteness from the rank and file. The split and the strike which followed helped the employers' and the G&MWU bureaucracy to crush opposition. The bureaucrats outmaneuvered the dissidents by carrying through some reforms in the organisation of the workers in the plants. The attitude of the ultra-lefts has helped in provoking the temporary demoralisation of the workers.

It is no accident that after the experience of Pilkingtons, the Tories have announced that in their projected anti-union legislation, they will make provision for split unions and for the "Right" of workers to decide by ballot what proportions should be represented by different "unions". They understand the weakening and demoralising effect that split unions have on the organisations of the workers. Undoubtedly, had the militants stayed inside the G&MWU, they would have been elected as shop stewards and controlled the new union branches which had been set up.)

There have been strikes of the dustmen, teachers, and other sections in recent months. The working class has remained firmly committed to the unions; even where these unions have been bureaucratically ran. In the recent period, the seamen's union has transformed itself from a semi-company union into one more responsive to the pressures and demands of the rank and file. This is the most dramatic expression of the process. The move to the left in the AEF and the T&GWU are indications of the same process. The radicalisation of the white collar unions is another sign of these developments. The process will continue and even be intensified in the coming year. There were 3,021 industrial disputes in 1969 as compared with 2,378 in 1968. The number of workers on strike was 1,619,600 (including 227,000 indirectly involved) compared with 2,257,000 in 1968 (including 182,000 indirectly involved). But the 1968 figure includes 1,500,000 in the one day engineering strike. In terms of days lost, the increase was significantly greater, rising from 4,690,000 in 1968 to 6,772,000 in 1969. This does not include the approximately quarter million in 1969 who struck in protest against the projected anti-trade union laws. The figures for 1970 bid to exceed the figures for 1969.

The battles of the Australian workers at the present time are an indication of the process. Not dismayed at the election of a Tory Government, they swept aside anti-trade union legislation and engaged in militant strikes. They are demanding their share of the expanded profits of the Australian industrial boom.

In the 1968-69 financial year, Australia lost 1.9 million working days in strikes. This was double the previous year, and that was almost double the year before that. Even the Financial Times (28th August, 1970) remarks that this year will be a record. 250,000 Australian workers struck as a demonstration against the vicious budget which gave millions to the upper income brackets in lesser taxes and pennies to the workers, while steeply increasing taxes on hardware moods such as cars, fridges, transistors, kitchenware, etc. Civil servants have worked to rule, and there have been strikes of oil workers, milkmen, teachers, brewery workers, container depot workers, electricity workers in Melbourne, gas workers in Brisbane, airline maintenance men, and even nurses in Canberra. Most of these have been local strikes but they indicate the trend. There have been strikes against inflation, or to put it in rude language, steadily rising prices.

The bitterness and resentment of the ruling class at the strength of the unions was shown by the campaign of all the mass media for anti-trade union legislation. But bitterness has to be tempered with realism if it is not to lead to disastrous conflicts. The CBI has not wholeheartedly welcomed the commitment of the Tory Government to anti-union legislation. In meetings with the Minister, delegations of this body have actually asked for a watering down of anti-union legislation) And not at all from kind heartedness or philanthropy do these narrow-minded and faithful members and representatives of Big Business take this action.

Their main pre-occupation is to aim at the funds of the unions, to try and frighten the bureaucrats of these unions into docility, at the same time, trying to enmesh the unions in the state machinery of arbitration and other 'conciliatory' machinery.

The threats of the CBI and of the Government to the unions have met with a skeptical echo from the financial press. The Financial Times of 19th August has some very interesting material on the negotiations between the T&GWU and the giant oil and smaller oil distribution companies in relation to the wages of the lorry drivers of these concerns. It sourly comments on the fact that the employers were forced to grant, in full, the 33 1/3% wage increase demand of the workers. This, the Financial Times felt, showed the strength of the T&GWU and, in particular, the shop stewards.

These negotiations, as the Financial Times wryly remarks, were taking place at the very time that the CBI and the Government were issuing their dour warnings on the effects of wage inflation, and the necessity of absolute resistance!

The real tenor of the Government and the reactions of the workers to it, are shown in relation to the question of establishing a second line of air transport, apart from the State concerns BEA and BOAC. BUA, which was preparing to sell out to BOAC, as it was virtually bankrupt, has now seen the light and is trying to merge instead with Caledonian Airways. This is to be a reminder of the advantages of private (un)-enterprise.

As a blessing to this marriage, the Tory Government wants to hand over air routes which would bring £7 million a year profit to the new airline at the expense of the State airlines. Even the chairmen of BEA and BOAC despite their increases of £2,500 a year, have protested strenuously at this racket. Naturally, the "progressive" press, such as the Observer, has enthusiastically welcomed this suggestion. None of the mass media have explained the repulsive character of the suggestion that the State hand over a new "license to print money", to monopoly concerns, without these having spent a penny of money, or forethought, to the development of such routes, which were created at great cost by the State airlines. This pleasant transaction, as was to be expected, has hardly been met with enthusiasm by the workers at the airports. The workers at Heathrow, Manchester, Glasgow, Gatwick and other areas, have responded indignantly by declaring that they not touch any of the aircraft of such a line, and will have it blacked by their brother unionists in all the airports of the world! They demanded that the original BUA-BOAC merger go through.

Storms ahead

Thus, whatever direction the rulers look, the prospect is that of stormy political weather. Any attempt by the Government to carry through their policy would provoke the biggest industrial storm of the postwar epoch. Yet in this weather, they have at the head, Heath, who may be good at sailing small crafts, but hardly has the stamina and the understanding to steer the ship of state through the stormy years that lie ahead.

For more than two decades, the ruling class had constantly proclaimed through the mouth of its statesmen, the mass media and individual capitalists, that investment is the key to progress in the future. Yet it is precisely in investment in Britain that they are falling behind. Investment abroad totals up to £1,000 million in 1969. The investment of the nationalised industries is actually more than 50% the total of investments in Britain. At the same time, so-called private industry comprises 90% of manufacturing and productive industry in the country. In comparison with the colossal amounts invested in America and Japan and the proportion of national income which goes to investment in Western Europe, the sums put into new industry by British capitalism are puny.

At the same time, the tendency of the falling rate of profit has begun to affect all sections of the capitalist world. Falling profits provokes a universal reaction of the capitalists, to try and limit wages as a means of insuring a bigger share of the wealth created by the working class. In Japan and Western Europe, this has partly been overcome by a higher growth rate, which, of course, ensures bigger profits. The chronic crisis and the measures of the government to overcome it, have added artificial impediments to the already slow rate of growth.

The disparity between America, Europe and Japan on the one side and Britain on the other, in the rate of growth, was further accentuated by the higher investment in proportion to the national income in these countries in comparison with Britain. The industrial production figures of some important countries between 1957 and 1967 indicate the trend. Sweden increased at the rate of 6.1% annually, France 5%, West Germany 4.8%, USA 4.6% and Britain only 2.7%.

In 1970, the level of investment will only be 3 to 4% higher than the miserable level of 1969, according to a forecast by the CBI after consulting their member firms. Under Wedgwood Benn the Ministry of Technology had forecast 7%. Even this abysmally low figure will not be reached.

The level of fixed investment (including housing) fell by 1% in 1969. The increase in world trade was 14% by price but by volume only 10%. This increase disguised the slow rise of British exports. The exports of West Germany and Japan leaped ahead by contrast.

In the field of machine tools, Britain's industry now stands fifth in size. This is the indispensable base for the re-tooling of industry. Deliveries of machine tools in 1969 reached the figure of £180 million. Exports were over £67 million, but in return £40 million worth was imported, leaving a favorable balance of only £27 million.

In the field of electronics, exports increased from £140 million in 1965 to £255 million in 1969. An apparent success; but imports increased in the same period from £82 million to £241 million. The favorable surplus dropped from £57 million to £16 million. The trade is forecasting an actual deficit in 1970 in electronics.

The Midland Bank Review also complains: "profit margins, if not generally falling, are at least rising less rapidly than previously, thus restricting the availability of internal funds, the main source of finance for capital development .... Interest rates (are) at high levels .... the amount of new money raised in capital issues was £1S9 million in the first half of 1970 (compared with) £469 million in the first half of 1969...." It expected a modest revival in consumer expenditure.

The rate of interest has increases from 5,8% to 1960, already a high figure, to 9,1% in 1969. In the same issue of The Banker quoted above, it states baldly: "The international interest rate war has, of course, been very much a reflection of the economic times; a consequence of the pursuit of over-ambitious growth rates and employment levels, to the detriment of price stability and international payments equilibrium". Consequently, the Tory Government looks with equanimity at the prospective growth of unemployment to three-quarter million by the end of the year. It is afraid of "stimulating" production for fear of "stimulating" the workers' demand for an increased share of the wealth they produce. Rather a smaller "cake" of which the ruling class get a greater share. Production under capitalism is not for the sake of production but to increase the profits of the ruling class!

According to The Banker, "Gross Domestic Product at constant prices fell by 1% up to the end of June. Consumption remained virtually unchanged, with exports leveling off. The fall in total spending reflected slightly lower levels of fixed investment and stock building. The estimate of fixed investment has since been revised to show little change on the previous quarter for manufacturing industry...Indeed the Treasury has since suggested...the outcome may be more in line with the lower estimate of 3%-4% reached for manufacturing industry by the CBI .... Investment plans seem to have been revised downwards because of the failure of the economy to expand, and also the severity of the liquidity pressures (lack of cash and banking limitations on lending) on the private sector..." Business failures in the first half of 1970 were 21% above that of the corresponding period of 1969.

These figures are an estimation of the weakness of British capitalism. Nevertheless, there has been a growth of British industry to a far greater extent and far faster pace than in the inter-war period.

Despite the limping character of its progression, Britain has seen more mergers and concentration of capital than any other country in the world. This concentration on the one side, with the development of mass industries, has not been confined to industry, but to the commercial side as well. While the industrial workers, because of their organisation, have defended and even extended their standard of living, the white collar workers have fallen behind. Relative to the organised industrial workers, their standards have declined. At the same time, the old paternal relationship between managers and staff has largely disappeared, the big commercial firms employing hundreds and even thousands of white collar employees have begun to be organised.

Some white collar workers have taken militant action. Especially in the engineering industry, where the big firms are strongly organised, the staff side, which is close to the workers, has organised militant action involving DATA and the clerical workers' organisations. Layers of workers not reached by unionism in the past, and in which the employers have organised company unions to prevent genuine union organisation, have now been affected.

Bank clerks and insurance officials have rejected company unions and joined unions affiliated to the TUC. Civil servants, post office workers, typists, clerks, among whom strikes had been unheard of, have conducted strikes for better wages and conditions. Many of these unions affiliated to the TUC as a symbol of solidarity with their blue-collared brothers. If they have not yet drawn a political conclusion by the dialectic of history, this has partly been because of the experience of the Labour Government. This has delayed the process but cannot prevent it. Any big movement of industrial workers will gain sympathy and in certain circumstances support by strikes by sections of the white collar workers which would have been considered impossible formerly. From a reactionary attitude, they have been won to the principles, in however vague a form, of Trade Unionism.

On the fringes, in Northern Ireland there has been a struggle of the Catholic minority for equal rights and against the artificial partition of the island. (This raises a whole series of questions which have been dealt with in an article on Ireland in this issue.) However, the effects of the struggle of sections of Irish workers must have a powerful echo in Britain, where an important segment of the working class is of Irish origin.

The problem of the coloured immigrants threatens to form an explosive issue in the next turn of events.

Because of the whole background of rising militancy on the industrial field, the inevitable disillusionment of large sections that voted for the Tories will have a big effect. Above all because they will not be able to hold down rising discontent expressed in the waging of strikes or because they will be compelled to partially capitulate to such struggles on the part of the workers, it is unlikely that this government will last out its whole term. Even if they are able to, they will be compelled to retreat in face of working class strength. But the very continuous decline of Britain in her world power must mean at some stage a real showdown with the working class to try and compensate for the loss of positions abroad.

The ruling class is probing and pressing and taking the line of least resistance, while they are capable of making concessions. This can continue so long as the upward swing of the economy hides the relative fall in the power of Britain. But even such an unhealthy process as inflation can better be cushioned by her rivals, than by Britain herself. Her margins are much less than those of her competitors. Only the great wealth that Britain has accumulated over a period of centuries helps her to alleviate the worst effects of the slow but continuous decline of capitalism.

Effects of the labour government's defeat

The defeat-of the Labour Government has had a big effect within the ranks of the advanced elements in the Labour and Trade Union movement. The anti-working class measures of the Labour Government were resented by large sections of the Labour Movement. Big sections have understood that the defeat was due to the adoption of capitalist policies by the Labour Government. The abandonment of any pretence of Socialist policies and the effect that that has had in the defeat of the Labour Party at the polls has aroused widespread criticism of the policies of the Labour Government. This has resulted already in the first signs of attempts by trade union militants to become active within the Labour Party in order to fight reactionary policies.

In Liverpool, for example, trade unionists in some areas have gathered together a caucus to discuss policies and activities in their local parties. They are uncertain as to program and policy, but they are determined to change the Party policy on Socialist lines. The youth, which always is the most sensitive barometer of political developments, is moving towards the left. The section, however small at the moment, organised in the Young Socialists, is moving rapidly to the left. A big section is already convinced of the necessity for Marxist policies, as the only solution for the problems facing the working class. Critical protests against the lack of militant policies by the Labour leaders are increasing.

Meanwhile, Wilson and the other members of the former government stand aloof from the attitudes of the working class. In the hot-house atmosphere of the House of Commons and the exotic atmosphere of government in the Cabinet, the class struggle seems far away and the rocking of the boat of the "national" economy, i.e. the vested interests and the privileges of private ownership and the status quo are accepted as the basis for the politics of the nation.

It is in this atmosphere that after the post election defeat and following apparently severe strictures on Heath and the Tory Party, that Wilson declared that he always knew that Heath was a good and capable fellow. At the Macleod funeral, Wilson walked abreast of Heath and Macmillan. Thus, the class struggle in the comfortable atmosphere of Parliament seems an invention of foreigners like Karl Marx. It doesn't apply to Britain. The game of politics they view as if it were a game of cricket. Wilson in effect declares "it's your innings, fellows".

The grim realities of life and the hard struggle of the working class to maintain and increase a little their standards of living; the necessary vigilance to maintain trade union and shop stewards organisations, with the endless pinpricks and provocations of the employers, see the working class, particularly the organised sections in the trade union and Labour movement, taking a different standpoint on the realities of the class struggle. In their daily life, and at work, they are constantly brought up before the necessities of a struggle for existence. Theirs are not the rosy, pleasant exchanges in the House of Commons and in the smoking rooms; theirs are not the port and whisky, caviar and limousine existence of the tops, but on the contrary, the matter of fact realities of fish and chips, and down to earth details in the struggle for wages and prices in the factories, plants and other undertakings where they work.

Thus despite the Labour leaders, and even more, in spite of the threats of the Government and employers, pressures from below will force these leaders - at least in words - to the left. Barbara Castle is already edging her way over in the criticism of the employers and the suggested measures of the government.

At this stage of the process, the bankruptcy of the reformist and Parliamentary Left is clearly shown in the feeble program they are putting forward. It really does not differ radically from the program put forward by thee right in the past.

Yet the explosive possibilities that exist within the working class are shown by the general mood. Should the Tories cling to power and try and maintain this for the whole of this Parliament, big industrial struggles and even the possibility of a general strike, loom on the horizon.

It is in this period that a slow, steady growth of the Marxist current in the Labour movement is taking place: a current not afflicted with infantile delusions and frivolous preening of themselves as the mass leadership of the working class. They have understood the sober realities of history. Events are moving in favour of Marxist ideas and a Marxist tendency if it knows how to work with the real currents of history as they really are and not in fantasy.

In the last fifty years, it is in the Trade Unions and their political reflection in the Labour Party that the radicalisation of the working class has manifested itself. The mass of the workers, especially the organised workers, will never easily leave their traditional organisations, particularly in the early stages of mass radicalisation. They will seek to transform their unions, as they have partially pushed to the left the T&GWU and AEF into fighting organs of the working class. Over and over again, the Labour Party will be refreshed and renewed by the Trade Union branches sending militant and left delegates and the transformation of the wards in the constituency parties. New elements will push to the fore in the shop stewards' committees and in the trade union branches, and in the political labour organisations also. The process that has reached quite a high level in the youth organisations will be repeated in the adult organisations and trade union movement also. The white collar workers who are becoming unionised and union-conscious, will be politicised also, adding to the ferment in the movement.

With the movement into action of big layers of the trade union workers, and the development of political crisis in Britain, the most oppressed and exploited, the most quiescent section of the working class will begin to awaken. The submerged, unskilled workers in catering, in small sweatshops which have succeeded in preventing union organisation, in clothing factories, retail shops and other sweated trades, the workers will move into action. The exploited workers, who have shown their capacity for struggle in the Tailors' and Garment Workers' Union in Leeds and other cities, are forerunners of real mass action on the part of the women.

The clashes and struggles will harden and push out a layer of advanced political workers, convinced of the correctness of the ideas of Marx, Lenin and Trotsky. At the same time, at the opposite pole of politics, forces will be gathering for a struggle against the workers. Powell and the weapon of racialism is still only a reserve instrument in the hands of the ruling class. Discontent at the fumbling and hesitations of the government in the ranks of the Tory Party will be expressed in a drift to the right wing. They will know how to use the weapons of demagogy rather than the old fashioned Toryism of Powell, while using the powerful poison of racialism.

In the Tory Party, the process will complement those taking place in the Labour Party but in the opposite direction. Opposition in the Labour Party will move towards the left, opposition in the Tory Party cowards the right. But these processes will not reach fruition till there is a change of government. A new Labour Government will come to power with the pressure of the workers demanding a radical transformation of society. The counter-pressures of Big Business, the City, the mass media, would far outdistance the mild pressures on the last Labour government. Thus, a new Labour Government would begin its activity with a far different atmosphere than that of the last. With a watchful, wary working class and an embittered ruling class, the stage should be set for explosive possibilities.