Ted Grant

Labour’s programme—1964-70 disaster was a warning

Source: Militant, no. 124 (September 29, 1972)
Transcription: Francesco 2009
Proofread: Fred 2009
Markup: Niklas 2009

The national executive committee of the Labour Party has issued a draft programme to be discussed at this year’s Blackpool conference. It may be written with the best of intentions, but as the old adage has it, the road to hell is paved with good intentions. The whole keynote of this programme is summed up in the first paragraph:

“We are a democratic socialist party and proud of it. We put the principles of democracy and socialism above considerations of class and market economics.”

The first sentence we would agree with. The second is completely muddled. It is opposition to class economics, the market economy and capitalism which is the basis of the struggle of the labour and trade union movement.

This is not a quibble. Only by changing the economy completely by 100 percent nationalisation can we change the basis of present day society. No one and no organisation can place themselves “above” the law of motion of capitalist society.

Karl Marx spent 40 years working out these basic laws. His work still remains the most modern analysis of capitalism and still remains unchallenged.

This shows that while the major part (90 percent at the present time) of the productive economy remains in the private hands of a handful of irresponsible companies, the laws of capitalist economics will prevail, despite the wishes or actions of individuals, parties or governments.

It is the failure to face up to this basic fact of economic life, which has resulted in the collapse of post-war Labour governments, especially that of 1964-1970.

The programme continues:

“The public today owns a substantial proportion of the economy. Yet critical levers of financial and economic power are still in irresponsible private hands. Crude market forces are allowed a far too dominant role. This is the main reason for our miserable investment record, for the scandalous rise in house prices and for the continuing power of financial speculators to influence national economic policy.”

What are the “crucial levers” of financial and economic power in irresponsible private hands? Nowhere in the programme are they defined, though this is the simplest thing in the world to do. There is nothing intricate or mystical about it. They are the banks, insurance companies, the millionaire property and landowners and the 350 monopolies which dominate the economy and virtually decide economic policy.

The coyness of the NEC is no accident. Woolly phrases and sentimental cloudiness do not pinpoint the source of the evils which capitalism involves and therefore do not pose the only and obvious solutions to eliminate them.

Thus the next sentence must be a classic in vagueness “Crude market forces are allowed a far too dominant role”. How far? A little less “dominant” and the left-wing majority on the NEC would be satisfied? What percentage of “dominance” is involved, 5, 50, 90 percent? The document does not say. The NEC is entirely silent.

If they had thought the problem through in the manner of Marxism then they would have understood that the problem of reorganising society on new foundations is not like slicing ham, one slice at a time, but regarding the economy as a whole. The idea of regulating or “allowing” a role to market forces or the financiers means to stultify those reforms and improvements which the NEC wishes to implement.

1964 programme failed: why should this one succeed?

The understanding of capitalist economics means an understanding of the need for generalised action and the impossibility of piecemeal measures to solve the basic economic contradictions of capitalism.

We will try and analyse these proposals and their realism in the light of the statement that the programme “makes proposals in some fields which could not be carried through in a single Parliament, and sets out objectives some of which would not be attained in 5 years through lack of resources.”

The programme starts out with the statement that “Britain is a rich country”. More than £150,000 million of wealth has been accumulated as a result of the labour of the working class and the application of science and technique The material basis for socialism which has been spoken of in the past by the great teachers of socialism, especially Marx and Engels, is now there for a society of abundance in which the anxieties, privations and poverty of the past can be abolished.

Yet there are millions living on the level of hunger and want. Apart from those on old age pensions and social security, there are 7 million workers earning less than £20 per week.

Problems not solved

The NEC asks members and constituency parties to “tell us how they feel our proposals can be improved.” We will endeavour to oblige! The question of full employment, prices, housing, equality, welfare, and education—all burning issues—are raised and reforms proposed on all of them which most members would support.

But that was exactly the same with the programme adopted for the elections of 1964 and 1966. The results could not be regarded as satisfactory even by the members of the NEC. Yet the same so-called “pragmatic” approach is adopted now. In 1959 and 1964 the programme of reforms was adopted on the basis that the additional money needed was carefully costed. There was only one little flaw.

That the magic wand of Wilson and Jenkins could not change the capitalist economy and its laws. Militant warned in advance of the inevitable failure of the programme adopted. Far from carrying through reforms, the Labour government was forced to carry through Tory policies of counter-reform in the fields of health, education, housing, school milk and so on.

We were not magicians either. An elementary knowledge of Marxist economics and the crisis of capitalism would have been sufficient to predict the inevitable path of the Labour government given the economic policies adopted.

But the policy of the NEC is no different today when the economic situation of capitalism is much worse. Jeremy Thorpe [then leader of the Liberals] has declared that the position of British capitalism is the worst for a century. Heath and the Tory government have adopted many of the economic policies advocated by the Labour government, such as regional incentives, capital grants and subsidies.

In fact, the programme reveals the NEC rubbing their hands with delight because of this. They have not asked themselves what these measures have to do with socialism if they can be adopted by a Tory government.

In any case they have not solved any of the problems facing British capitalism as a result of the measures. Investment fell 7 percent in 1971 and probably an additional 3 percent in 1972. The projected increase for 1973 is 10 percent but that will only bring the investment programme up to the 1970 level.

But the Labour government’s record was no better. They achieved only a 10 percent increase in total over 6 years!

This is relevant when the document speaks of economic development as the gate for entry into the promised land of raised living standards, social services and so on and then tamely says “Labour will adopt a fresh approach to the relationship between government and industry”.

What does this imprecise formula mean? What fresh approach? It can mean anything. It was the same sort of language which was used in the programme of 1964. We are still suffering the consequences of such nebulous formulae.

Again the document speaks of “redress[ing] the balance of power between giant corporations and the community” How? What with? What measures? With a feather duster perhaps? There is no real indication of how this can be accomplished.

There is a tremendous economic power in the boardrooms of British industry. The decisions of the bankers and industrialists of the biggest firms weigh far more powerfully than the decisions of the government. According to Labour’s Economic Strategy, the 30 biggest companies alone have a bigger budget than that of the whole state of Britain! The Prudential Insurance Company alone has a bigger budget than the state of Belgium. The directors of these firms are far more powerful than the entire cabinet or the prime minister, who remains as wax in their hands while they own and control the major portion of the economy.

They in turn are at the mercy of the laws of capitalist economics. Heath’s programme of savage assaults on the standards of living and the rights of the working class were not dictated merely by stupid whims, but by the fall in the rate of profit, which in turn is only the other side of technical progress.

The profit of the capitalist class is the unpaid labour of the working class. From what Marx refers to as constant capital, that is machinery, buildings etc., no profit is produced in industrial production. Profit only comes from the surplus labour of the working class. But the capitalists through competition are compelled to invest more and more in production. This means that there will be a tendency for the rate of profit to decline (there are counter-acting factors). Everywhere in the capitalist world this has been demonstrated as correct during the last few years.

That is why the promise “to attack economic inequality in all its manifestations” is so hollow. You cannot get economic equality without destroying the source of inequality—the ownership of capital. How can the government iron out the difference between a banker and a boilermaker, between an old age pensioner and an industrialist, between an executive at £10,000 to £20,000 a year and an electrician?

Even if you tax the former heavily the inequalities remain. There are no reports of suicides among the capitalist class as a result of the policies of the last Labour government. There is not anything fundamentally different in the present projected programme and that of the last Labour government.

According to the calculations of the NEC the Tory government by manipulating taxes and the budget will have given by the 1973 budget about £1,375 million a year to the rich.

Under the Tories, the number of unemployed, in reality, must be over a million. Even according to the official figures, it is over 921,000.

Yet under the last Labour government, it was already over 600,000; consequently one must take with a pinch of salt the promise to restore full employment, with the failure to point out the cause and remedy of unemployment.

Inequality rooted in capitalism

Unemployment is not caused by “wickedness”, “doctrinarism” or “stubbornness” by Heath, Barber, Davies, Macmillan and all the Tory crew. It is caused by the difficulties of British capitalism and the “shedding” of labour by the monopolies, to restore or increase profits. The programme says as a first priority:

“Full employment, 4 men and women unemployed in every 100 workers is intolerable. Our first task therefore will be to plan for full employment and this will require economic and industrial policies in which the government intervenes in private industry and takes responsibility for growth and jobs.”

What economic and industrial policies in private industry can guarantee jobs? The industrialists and bankers who in private may be very kind hearted gentlemen, sobbing over the plight of the unemployed, in business are hard-headed and stony-hearted gentleman gangsters, whose policies are dictated by the greed for gain and higher profits. No one can change the situation by words, exhortations and appeals.

The industrialists will close their factories if the profits fall severely. The bankers will provoke panic if driven too far. They cannot be changed by “instructions” from the government. It is the economic laws of capitalism which dictate their activities in the economy. So long as the basis of the economy remains capitalist there is nothing else for them to do if they do not wish to face ruin personally and for the economy. Consequently they consider it their duty to lead erring governments to see the light.

Consequently the pressure would not be of the Labour government on big business but the reverse. The present confidence of the present left Labour leaders would soon evaporate at the first signs of economic and financial panic which the passive resistance of big business would provoke.

Thus Harold Wilson has spoken of a “strike of capital” against the last Labour government. What is there to indicate that in a developing crisis, things will be better next time? On the contrary, they will be far worse. Big business will pull out all the stops to force the next Labour government to bow to their will. What plans are there to break a strike of capital? There is not the remotest inkling of the real class struggle in society, at the present time or in the coming years.

Do the NEC think that it is just the personal peccadilloes of Heath in introducing the Industrial Relations Act, Housing Finance Act, budget measures flagrantly in favour of the rich, VAT and other measures? True the cabinet is probably the worst and most incompetent government of Britain for a century, but that is not the principal reason for these measures. They may be introduced crudely and stupidly but it is the class interests of capitalism which dictate policies.

Nor is the bitter resentment and resistance of the workers in strikes and demonstrations anything but an expression of the class struggle. This cannot be wished away by men of goodwill. It cannot be changed by “intervention” in “private industry”; nor can it be changed by the government “taking responsibility for growth and jobs” when the real economic decisions will not be in their hands, but in those of the capitalists who control industry and are in turn in the grip of “market forces” which they cannot control.

We can predict in advance that “economic crisis” and the “pressures of the world market” will be offered as excuses for the inevitable collapse of the programme of the next Labour government. If it is based on the document of the NEC, most likely the “mess inherited from the Tories” will be an alternative excuse. As if Labour can come to power unless capitalism and the Tories are in a mess!

What use is a programme which will only work under a model and sunny climate of capitalism! Again it is a question of understanding the real face of capitalism and not projecting a capitalism which never has and never will exist.


“The scourge of price inflation must be stopped. Labour’s prices policy will set a legal limit on price rises for essentials and key commodities. The NEC will study in depth the relationship between price stability, social justice and the level of income, both earned and unearned and put our proposals to the nation.”

It’s a pity that the NEC did not make a “study in depth” of the last Labour government. Surely, as serious politicians, they should have undertaken an analysis of the policies and mistakes of the last Labour government, in order to avoid the pitfalls and mistakes which led to the collapse of that government.

Instead they seem determined to repeat the fatal errors of the past. Limiting the prices of certain essentials, while these are in private hands will cost enormous subsidies and result in high prices for the goods not so controlled. It is the inflated expenditure of the government the enormous share of the GNP which it takes, the use of the printing press to print money which is not covered by goods or gold which is one of the main causes of inflation, but the opposite process under capitalism, deflation, is as bad if not worse for the workers. They are two sides of the same capitalist coin.

No “study” will find a solution while the basic economy remains capitalist. Yet last year trying to avoid the mistake of deflation by the Jenkins’ method in the last Labour government, the NEC decided precisely on an inflationary binge for the next Labour government, that is a policy of devaluation, which as surely as night follows day would mean inevitably inflation and an increase in prices.

Heath has pre-empted this policy by floating the pound, as he has adopted or borrowed many of the other policies of the Labour government, in turn borrowed from the policies of previous Tory governments. These have not solved the problems of the economy.

Prices are increasing, partly as a result of the 1967 devaluation, more as a consequence of the latest de facto devaluation. But if the new Labour government merely intensifies the inflationary policies of the Heath government this will have disastrous consequences. One of the secondary reasons for the sickness of the British capitalist economy is the “intervention” and manipulations of the government. Hence the bleatings and screaming of big business and the press. But on the other hand, under modern conditions the state is forced to “intervene” but the intervention cannot but benefit big business in so far as it is effective, which it has not been in the past period.

There is no need to “study in depth” social justice and the level of incomes both earned and unearned; ask any politically conscious rank and file active member of any union. There can be no “social justice” while the capitalists gobble up a great part of the wealth produced by the workers due to their ownership of capital.

While this basic relationship remains the “level of prices” will be determined by the world market, the home market and the interests of the employers.

The same promises were made in 1964-66 re incomes, prices, housing and employment. But the programme of “little by little” could not be implemented because the interests of big business prevented it.

“Housing shortage shameful”—but no cure outlined

“Today’s homelessness, particularly when it exists alongside massive profiteering in land and housing costs is shameful. Labour will therefore give high priority in public expenditure to the development of a housing programme which will provide good accommodation for every family at costs they can afford”.

This is an entirely laudable objective which every member and sympathiser of the labour movement would support. But how is it to be obtained? There is not a word in the tens of thousands of the programme to explain this. It is not a difficult question. The lack of housing, the slums, the high rents, the Housing Finance Act are not caused by lack of resources. The building workers are there (in fact 175,000 are unemployed), the factories to produce the materials for housing are in existence, the financial resources are there, but what stands in the way are the vested interests of rent, interest and profit.

It is the private ownership of the land, of the banks and of the big building firms which stands in the way. It would be entirely possible to build houses to rent at 6 percent of wages if it were not for the profit system. 80 percent of the cost of council housing goes in interest to the moneylenders, another 15 percent to the landowning sharks and building profiteers. If it were not for this it would be entirely possible to build between half a million and a million houses a year and rapidly solve the housing shortage which it is impossible to solve while capitalism remain. Vague promises without concrete figures will solve nothing.

In another section of the document, the NEC refers to delegations to the Soviet Union and other countries of Eastern Europe. We all oppose the totalitarian system of government but nevertheless, on the basis of the elimination of landlordism and capitalism, in these formerly industrially backward countries the housing problem is beginning to be solved. Russia builds more houses per annum than Western Europe, Britain and America combined! True these are jerry built because of the bureaucratic method of government and mostly of shoddy quality because of the lack of democracy and control by the working class. But nevertheless they charge only 5 percent of wages for rent, and the population is rapidly being housed in reasonable circumstances in comparison with the past. This is no miracle! It is only because they have expropriated the capitalists that it became possible. There can be no “providing of accommodation for every family at prices they can afford” until the real evils that prevent this are concretely attacked.

The nationalisation of the land of the banks, insurance and big building firms with minimum compensation on the basis of need is not “doctrinaire socialism” but a vital necessity if the housing problem is to be solved.

The resolutions calling for the nationalisation of the building industry and the banks and insurance companies passed at conference by big majorities during the last few years show that the rank and file understand this. Why does not leadership lead or at least take up the lead given by the rank and file?


“To finance our public expenditure programme, while protecting the lower paid, a greater contribution to tax revenue will be called for from those with incomes well above the average. We will also redistribute wealth through new forms of taxation on the very rich.”

In a very good section on How the rich got richer some very telling facts are brought out in an indictment of the Tory government. But unfortunately the point made by the Tories is absolutely correct, that in a capitalist economy the money for investment for private industry, 90 percent of the productive manufacturing economy, must come from the profits of the investors. As the programme points out, company profits rose by over 13 percent in 1971 and in the last quarter of 1971 undistributed net profits rose by 25 percent. Yet even under these most favourable conditions provided by their government, investment fell by 7 percent in 1971 and is projected to fall by another 3 percent in 1972.

Wealth tax—rich will find loop holes

If Labour cuts into the profits of the capitalists how will the necessary investment in industry be maintained or, what is necessary, further increased? Wilson tells us in his memoirs that he was faced with a “strike of capital”. What preparations have been made for a spot of anti-capitalist strike-breaking? There is not even a reference to the inevitable resistance of the capitalists to any drastic measures of reform against their interests.

The document complains about the anti-patriotic investment abroad, yet under the last Labour government investment abroad increased. The document criticises the Tories because “private industry has lost confidence in the prospects of growth in the British economy.” But private industry, i.e. big business, is not interested in growth for growth’s sake but only in increased profits. If profits fall as a result of the measures of the Labour government, then the capitalists will lose even more “confidence”. Investment will fall steeply and this will have catastrophic consequences for “full employment”.

Consequently any hopes and sincere intentions to carry through a “programme of equality” will be jettisoned as it was with the programme of the 1964-1970 Labour government.

“We stress that not everything can be done at once but when over £1 ,000 million could come from just halving today’s unemployed and when £200 million revenue could result from each 1 percent improvement in growth rate, and when millions of square feet of office space are standing idle which could make a vast contribution to local rates, then we are optimistic that the major elements of Labour’s programme can be embarked upon with confidence.”

This is known as whistling in the dark. If we halve unemployment, if we get a higher growth rate… then our problems will be miraculously solved. This is hardly a scientific “hard headed” approach which our leaders pride themselves on.

The indictment of the Tories is biting. With a family income of £17, a £4 a week increase due to the Tory measures results in a 76p increase in income. A family with an income of £28 a week with £4 increase actually ends up 38p a week worse off!

The programme promises that the next Labour government will reverse this. Some palliatives may be adopted but they cannot reverse the general trend of the capitalist system without changing it completely.

For example the document refers to “unemployment as an economic disaster”. A disaster to whom? For the working class certainly but for the capitalists it is merely a “shake-out” of surplus labour. This began even before the Tory government took office. There were 600,000 unemployed under the last Labour government and unemployment was not decreasing but increasing.

While the economic system of capitalism remains, the economic laws of capitalism will remain:

“given the right economic, regional and industrial policies, and the necessary development of the public services, unemployment can be dramatically reduced… Labour will not be finally satisfied until in every part of the country there are at least as many suitable jobs as there are workers seeking employment.”

Unemployment and growth

How can the government decide there must be “balanced economic expansion” and “jobs for all” when they do not have control over the economy? They do not decide but the monopolists. If they make bigger profits they will expand production. If their profits fall they will cut and contract production. With 90 percent of productive industry in their hands their decisions decide whether there will be an expansion in their sectors. They will decide this on the basis of whether they make extra profits or not.

If the government “expands” capital expenditure on necessary public expenditure such as schools, roads, hospitals etc. or the “public infrastructure” of the economy, this will create a semblance of a market and thus some economic activity. This can only be marginal.

The government in an economy dominated by “private enterprise” can only get the money for this in two ways, either by taxing the workers or taxing the capitalists. If they tax the workers—that will reduce standards—and cut into the consumer market. If they tax the capitalists—that will reduce the amount that can be invested. If private investment falls that will more than cancel out the investment of the state.

Heath and company have already stepped up the investment in the nationalised industries, telecommunications, steel, railways and so on in order to give a boost to the economy. In this too he is pre-empting any such moves by the next Labour government. But such a boost can only be very limited in its effects. If the Labour government increases this expenditure substantially then it will mean less expenditure for private industry—the productive part of industry.

In any case it is impossible to increase the capacity of coal, steel electricity, gas and transport if there is no increased sale of these commodities! Are they going to pile up quantities of steel, coal, locomotives and electricity capacity which is not going to be used? This is absurd, in any case it would be lopsided not “balanced” economic development and in the real world would be impossible.

“Ah”—would reply the members of the NEC—“we will solve this by ‘deficit financing’.” This was the stock in trade of the Gaitskell right wing with which they replaced coherent economic thought or policies. Unfortunately the present left-wing NEC has swallowed these right-wing myths. Deficit financing, spending money you have not got and resorting to the printing press or devaluation of money, is the principal cause of inflation.

The rise in prices over a period inevitably cancels out its effects. Either the workers would suffer the effects and there would be a cut in living standards, and this is the usual and inevitable pattern, or the capitalists would lose out and cut the amount they can invest. Either way it resolves itself into the dilemma explained above. With the difference that prices are higher all round and confidence in economic stability and the currency are undermined all round.

That is why it is so futile to talk glibly that,

“when the need arises to stimulate demand Labour will take the appropriate measures and will bring forward public expenditure commitments. Some public works are of a kind that require many months before work can be started, but others are not.”

At a time when the capitalists have abandoned Keynesian delusions that the capitalist economy can be manipulated it is sad that “left” Labour leaders can still be deluded by the nostrums of this capitalist witch-doctor.

The Tories in a panic, reversing the programme with which they came to power, have launched the biggest spending programme, the biggest “peace time money supply” to use capitalist jargon—30 percent—in the last century; it has had the result of the biggest peace time inflation for a century also.


It has not solved the problems of the economy but provoked the biggest strike wave in Britain since the general strike of 1926. An even bigger inflation under Labour, for this is what these suggestions mean, would provoke terrible disillusionment—it would provoke an even bigger strike wave on the part of the working class.

The programme then says with unconscious irony, “active public intervention in the economy is the only way to success.”

The achievement cannot be the responsibility of private industry, nor will any amount of exhortation bring success through market forces alone.

My God! 85 percent of the economy is still in private hands and therefore precisely subject to the laws of the market economy. The NEC does not propose to alter this more than a very small percentage; therefore the economy will remain under the domination of the market. Yet they admit that exhortation or magic words will not change things. But of a socialist economic policy there is never a word.

The present unemployment of a million was not regarded too ruefully by the Tories when they thought they could use it to hold down wages. When this was shown to be false by the struggles of the miners, railwaymen, engineers and building workers, they tried to change course. “Ministers already have considerable powers to attack unemployment, even though to date the present government has failed to act.”

Why? Because Heath, Barber and Davies are afflicted by original sin and wickedness and like to see people on the dole? Let us remember that unemployment was increasing under Labour and had reached the highest figures up to that date, for any length of time, in the post-war period.

Strachey in the 1950s wrote in his book, Contemporary capitalism, that the problem of unemployment had been abolished in Britain and America while in Germany and in France it remained chronic because in the former countries they were manipulating the economy by Keynesian methods. Today the reverse of that situation exists, but inevitably if capitalism remains France and Germany will face mass unemployment.

There is no possibility of avoiding it, in the long term, while capitalism remains. As the hard-faced bankers and monopolists constantly reminded Wilson, the laws of the capitalist economy cannot be altered by kind wishes and wishful thinking.

The programme continues “We believe that industry exists to serve the needs of the community.” How nice! And how pathetic! What difference does subjective “belief” make to the world of hard politics? The NEC’s beliefs will not make a ha’porth [half penny’s worth] of difference to the real owners of industry. Precisely as the NEC itself quotes, they are in business not to make cars, shirts, shoes, or transistors but to make money.


Moreover these owners of industry are under pressure of national and world competition. They cannot be soft hearted or they will be driven out of business. Good intentions cannot prevent the domination of the market nationally and internationally. The attitude of the capitalists is dictated by the laws of the market. So long as the decisive sections of the economy remain in private hands—and the NEC do not intend to alter this situation—so long will the market dominate. No tears or epithets or moral strictures will alter this basic economic fact.

The programme tacitly accepts the entry into the Common Market and competition and the pressures of capitalist rivals, as well as the pressure of the world market will force the capitalists to intensify attempts to squeeze more out of the working class in order to compete. Whatever government is in power if the economic structure remains basically as now, the economic policies of the government will be determined by this. They will not, as they foolishly believe, dictate to the economy. The economy will dictate to them.

The NEC speak ruthlessly about policies of “economic expansion” and “building up the industrial structure to safeguard Britain’s economic future…by increasing the total size of national resources available.”

“Government planning” impossible in a capitalist economy

Redistribution between rich and poor in a capitalist economy will have the opposite effect. By decreasing the amount in the hands of the capitalists already affected by the tendency for the rate of profit to fall will decrease, not increase, investment and thus prevent an “increase of resources.”

In the madness of capitalism the only grain of sense is that in the greed for profits the capitalists are forced to develop economic resources. The fact that they are no longer doing so in the old way is an argument for their dispossession and for a real state plan of production controlled by the producers. But “government planning” in the real sense of the term is impossible while the economy is owned and controlled by big business.

This will not be changed by indignant phrases about the capitalists “holding the country to ransom”. Tomorrow it will be the Labour government who will be held to ransom. They will either have to take action against these new robber barons by taking away their economic power, or as happened in 1964-1970 do their bidding and exert pressure on the working class to increase their profits, in order to increase the resources of the country, i.e. big business which regards their interests as the interests of the country.

High sounding moral indignation against capitalism did not produce one shirt or any other economic resources. Going into class battle on this basis is like going to war without any strategy or tactics but hoping that singing hymns and high morale would be sufficient to overcome an enemy armed with material equipment in tanks, planes and guns.

The economic arguments are based purely on wishful thinking and not on economic facts. The leaders of the movement have always prided themselves on being “realistic” “hard-headed” and “practical” politicians who believe that politics is “the art of the possible” that was the stock-in-trade of the Gaitskell and Jenkins right wing. Now it has been swallowed whole by the left wing leaders who have swallowed completely the economic programme of the right for the next Labour government.

The nationalisation of the ports, shipbuilding and possibly parts of the aircraft industry, of motor insurance and of part of the pharmaceutical industry which are the nationalisation measures advocated in this programme will not alter the relationship of forces in industry or the economy.

Capitalism will be decisively dominant. The Tories and their big business masters must have chuckled at the promises of improvements in the social services, pensions and standards of living.

They will hang this like a millstone around the neck of the next Labour government. It cannot be carried out on the economic premise of a capitalist economy.

It is the economics of cloud cuckoo land and utopia, not a practical programme. Here too, only the Marxist Militant tendency has a serious practical attitude. As always, it is the reformists who are impractical and utopian in their policies, which are entirely unrealistic and incapable of application. Elementary Marxist economics, even elementary capitalist economics indicates the dream-world of the ideas of the NEC on economic policy: “Instead they [Tory government] allowed investment to collapse and created massive unemployment.” As if the Tory government had it in their power to do anything else! And as if investment was not already beginning to fall under the last Labour government, despite enormous bribes and inducements to invest, especially in the depressed areas!

Floating pound

The capitalists, especially the big business combines, pocketed the money and made the investments they intended to undertake in any case. Unless the capitalists sense a good possibility of making or increasing profits, they will not invest.

The stories of Santa Claus capitalist philanthropy belong to the nursery and not to a serious labour organisation.

The NEC also reveals a certain confusion in their criticisms of the floating of the pound by Heath. This is a disguised devaluation and means an indirect cut in living standards. Yet, in fact, here too, Heath, Barber and company have pre-empted them. At last year’s conference, the NEC statement analysing the “mistakes” of the last Labour government of “deflationary policies”—i.e. squeezing living standards by taxation policies and, through a prices and incomes policy, holding down wages, declared for the opposite “mistake” of devaluation. Neither policy, or as is usually the case, a combination of both, can solve the problems of the working class, or, for any extended period, even that of the economy.

The NEC criticises the government for their handling of economic policy: “Thus the expectation of ‘stop’ following their ‘go’ becomes a major factor in discouraging investment.” But the record of the last Labour government was even worse. The six years were among the worst for investment of the post-war period.

But let us be clear. Leaving aside those by the state, the investments in industry, apart from small sums, are provided by big business. They invest; they decide; they control, on the basis of the profit or greater profit they will make. Otherwise they will not invest. Here too the NEC is inconsistent. After spending 80 percent of the document in denouncing the rich and big business, they say they will provide a favourable climate for them to make money.

One of two things; either the NEC do not take seriously their programme of soaking the rich, or their private investment programme is going to go awry. One or the other will have to be largely abandoned. With the immense power of big business and the woolly ideas of the NEC, the same result as with the 1964-1970 Labour government is inevitable.

Marxists discussing policy and perspective always begin with a study of past experience. It is a pity the NEC have not presented conference with a balance sheet of the Labour government of 1964-1970 or even that of 1945-1951.

In essentials, they are presenting the same programme as in 1964 and in 1966. The results can only be worse. Labour can only come to power under far more unfavourable conditions than at that period. Heath is already desperately using many of the measures (devaluation, regional policy, subsidies) suggested by Labour in Parliament and carried out when they were in government. Instead of congratulating themselves on their cleverness, the NEC and the Parliamentary Party should be asking what these measures have in common with socialism when they are used by the enemies of the working class.

In any case, the use of them by the Heath government means that this method of “stimulating” investment will be used up or require such enormous sums that the cost would be prohibitive. Like the drug of devaluation, it requires greater and greater sums to have the same effect, and the “withdrawal symptoms” will be enormously painful.

“Prices and incomes controls have failed everywhere”

“We shall hold down prices.” Like the promises of Heath, these words will become a standing indictment. Prices and incomes controls have failed everywhere in the capitalist world. An attempt to hold the prices of some necessities stable will cost enormous sums. At the same time, it will result in even higher prices of those necessities which are not subsidised. Man does not live by bread alone, and the soaring of unsubsidised prices, through the inflationary policies suggested, will provoke general discontent. Attempts to impose price controls will end up with black markets, fiddles and all the other paraphernalia of “controlled capitalism.”

The most futile appeal is that to the capitalists: “If inflation is to be overcome, then all sectors of society must co-operate in a necessary adjustment.” The bosses must co-operate with the workers they exploit. The vampires must suck a little less blood from their victims. In any case, this is a vain and fatuous hope.

“Labour believes that there is scope in an expanding economy for rising money wages and, too, that rising wages and expanding profits can co-exist.”

For short periods of time this is true. But first the capitalist economy must be expanding and second the periods for this are usually short. But the disease of British capitalism has lasted for more than two decades. Throughout the capitalist world at the present time there is a tendency for the rate of profit to fall, for reasons already explained. Now the British capitalists can only increase profits and compete in the world markets by cutting the share of the working class.

They can only re-invest if they make extra profits, and a bigger share is not taken by the state. The Industrial Relations Act, the Housing Finance Act and other impositions of the Tories are intended to increase the share of the national production by the capitalists.

Even this massive inducement has failed to get increased investments by the entrepreneurs.

Do the NEC seriously think that by honeyed words, and not concrete deeds, they can get the sordid class interested only in bigger rents, interest and profits to invest more than Heath has been able to?

“A stake in private companies” will be like the stake of the government in shipbuilding and aircraft construction. The subsidies for Harland and Wolff are more than what the company could have been bought for outright. The same is true for the shipbuilding industry generally.

This is hardly the way to transform society. “It is our view that wherever an industry depends for its very existence on huge public handouts… then that industry… is a clear candidate for substantial measures of nationalisation.” What are “substantial measures”? Not even outright nationalisation for bankrupt industries, dependent for their existence on national assistance!

Is there to be a repetition of the steel nationalisation, where the companies which were virtually bankrupt were taken over with gross overcompensation, while the 10% which made 33 percent of the entire profits were not touched by the last Labour government?

No middle road

What the NEC wants is “expansion geared to the real needs and priorities of the community as a whole, rather than to the short-term dictates of the market.” What the NEC wants subjectively and the objective needs of capitalism, are two different things. [One might as] well ask the tide to go back as ask for non-capitalist aims in a capitalist economy.

“Close control co-ordination will be needed… We are considering the establishment of a strong new economic planning unit… demand management… We are investigating the various alternatives… an end to stop-go policies… Experience shows that private capital investment will be forthcoming if there is confidence that demand will grow and that the economy will not be subjected to periodic stop-go recessions… direct action by government is still needed to ensure adequate investment… We shall therefore consider the reintroduction of a general scheme or investment grants… There is a need for a selective policy to encourage investment.”

They can study alternative policies until doomsday, but they won’t get further. Trying to be all things to all men, instead of a simple, clear class policy, is always a recipe for disaster for those whom the NEC represents—the working class. The next Labour government will inevitably go the way of the last—more speedily and more disastrously, if it continues in more glaring form the policies of the last Labour government.

The economy is dependent on the market at home and abroad. It is at the mercy of the laws of capitalism. Good intentions count for nothing in economics. Reconciling the irreconcilable and repealing the law of gravity in physics would be as easy as reconciling the interests of capital and labour. If we start with the incontrovertible proposition of Marx that the profits of the capitalist class are the unpaid labour of the working class, we cannot make the mistakes of the NEC. Either one stands for the interests of the workers, and prepares to attack the citadel of capitalism, or one ends up supporting the capitalists. There is no middle road.

The conference resolutions of the last few years indicate that the rank and file understand this, even if not completely.

What distinguishes fundamentally this programme from the programme of 1964-1966?—Nothing.

Why did that not succeed? There was undoubtedly the will for reform. The economic facts of life intervened. There was the inevitable and invincible sabotage of big business. But the laws of capitalism prevailed; in a capitalist economy, they always necessarily will.

Why should the present programme, no different in essence from the last programme, succeed? Capitalism is in worse shape. British capitalism in the Common Market will face even severer competition. Investment will fall. The state will oblige by supporting the weaker and more inefficient capitalists. This will impose even more strain on the resources of the state and the economy.

Why does the left-wing NEC, like the former right-wing NEC avoid the real issue? Unless the commanding heights of the economy are taken over, the banks, insurance, land and the 350 monopolies which control 85 percent of the economy, there can be no way forward.

There is no need to “choose” individual consumption or social services as priorities. Plan the resources! Why not adopt the TUC programme of an 8-hour day, 4-day week, with no reduction in pay, plus a £30 minimum wage?

Where is the money to come from? It can only come from a genuinely planned economy. According to the estimates of capitalist economists, there are over 5 million redundant workers in industry at the present time. The present production could easily be exceeded, even with the present productive capacity, without them.

In a democratic workers’ state, with the elimination of want, insecurity and the other anxieties of capitalism, it would be possible to use the labour of these 5 million, plus the million or so unemployed, to do this and to increase enormously production for the benefit of the entire population.

Leaving aside all other factors, the planned use of labour and all the other national resources of science, technique and skill with the immense economic potential of Britain and with workers’ management of industry and the state, plus the enthusiastic work of these 6 million surplus workers and their nearly 20 million brothers would transform the economy.

Not the meagre target of a 4 percent per annum growth rate under the last Labour government—which was never reached—and has now been exceeded even by the Tory government—but a figure of at least 12 percent and probably even 20 percent could be reached. This would provide the basis for an immediate rise in living standards for the mass of the population.

A social transformation of Britain, with workers’ democracy, would inevitably mean the social transformation of Europe and the world. A genuine era of co-operation and integration of the European and world economy would begin.

This can only be done by mobilising the working class through a campaign for the taking over of big industry, with minimum compensation on the basis of need. A campaign putting this forward, would undoubtedly gain the overwhelming majority at an election.

Britain is a civilised and cultured country, but already the symptoms of capitalist barbarism are beginning to appear. The laws attempting to restrict the rights of the working class are an indication in which direction the capitalists are beginning to think. Action is necessary to defend their profits.

“Racial raving of Powell and Monday Club threatens labour movement”

The cultured gentlemen are showing their vile nature as soon as they think their system is threatened. Like the German or any other capitalists, there is no infamy to which they will not turn when they feel capitalism is becoming endangered.

The vile and cunningly slanted racial campaign against the Ugandan Asian refugees by the mass media (the popular press, radio, TV—the means of communication in the hands of big business) was a dress-rehearsal for the future. The denigration slanted campaign against strikers is another example.

A future Labour government which tries to act in the interests of the masses will face an unexampled campaign of lies, hysteria and misrepresentation.

Big business, in addition to using the gutter-press and gutter-radio and TV tools, will subsidise the racial ravines of Powell and the Monday Club and other reactionary organisations. If some Midlands industrialists offered Powell more than £1 million years ago to campaign for the leadership of the Tory Party, they will subsidise him and the Monday Club to the tune of tens of millions to propagandise against a new Labour government which threatens action against their vital interests.

The next Labour government, it is certain, will take power at a time of crisis for capitalism. It, will inevitably, with its present programme, be a government of crisis. The sure instinct of the active Labour rank and file, and of the active trade unionists indicates that only socialist policies for the complete transformation of society, can serve the needs of the labour movement.

Nearly four decades ago, in an atmosphere of crisis engendered by the rise of fascism, Clement Atlee wrote about the need for a Labour majority in Parliament to introduce an Enabling Act to take power to transform society.

Unless our leadership is prepared to do this and by mobilising the forces of the organised labour and trade union movement for a campaign on these lines, it will lead the movement to a debacle, which would pose the problem of the very existence of the movement itself in the future.

Powell has spoken apocalyptically of “rivers of blood in the streets.” The racial poison which will be used against the Labour movement would pose large-scale clashes. All this can only be avoided by firm socialist action and a socialist programme.

There are 10 million workers in the trade unions. With their wives and families they would constitute over 25 million. The handful of parasites who own industry would be powerless against such a force if properly organised.

And all the downtrodden who don’t belong to unions would be roused to their feet if there was a prospect of real change. This is the task which a bold socialist programme should set itself!

No more tinkering with the capitalist system! Nationalise the 350 monopolies and introduce a planned economy under the management of the trade unions!