Ted Grant

Militant's Programme: For a Socialist Plan of Production – Capitalist crisis deepens

Written: April 1979
Source: Militant special

The Tories have declared war on the organized working class in their Manifesto. Despite speeches about ‘freedom’ and all the other smooth talk, the measures they propose are a declaration of class war, a twisted echoing of Heath’s Industrial Relations Act.

The cardboard lady Mrs Thatcher has adopted her ‘Iron Maiden’ pose [reflecting her big business paymasters] to “Cut down” the power of the trade unions and “Restore the balance between the Trade Unions and the Employers”.

“It won’t be shouted from the Hustings”, says the ‘Economist’, right wing organ of big business “but Britain needs a swing from wages to profits to help regenerate industry. Britain’s underlying growth rate is now so low that getting higher profits may need a cut—not just slower growth—in real wages”. (7/4/79)

That is the background to the Tories’ policies, and the media’s poisonous campaign against the unions.

The unions are the shield of the organised working class, protecting rights, conditions and living standards.

Through pressure to defend and improve the social wage; pensions, hospital services, housing, social services and transport, they fight for the interests of all workers.

All the rights of working people including the right to vote, organise and strike; free speech and free press were won by struggles of the labour movement.

The real Tory programme is one of holding down wages; allowing prices to rise, and further slashing government spending. The CBI has called for another £6,000 million cut.

In five years, arms expenditure has increased from £3, 600 million to £8, 500 million.

This programme is bitter class war. The Tories want to deepen the present gulf between the health, housing, and other amenities of the capitalists and those of the workers. Private health schemes and subsidies for private schools are encouraged. These are all out of the reach of workers, who must suffer cuts in already inadequate services.

Pennies from income tax concessions to low income families will be more than cancelled by increased food prices through increasing VAT on necessities such as furniture. But cuts in tax will mean that ‘at a stroke’ the weekly income of top directors and managers will rise by more than the average industrial worker earns in 6 months.

Meanwhile, arms expenditure will rise. British capitalism is obsessed with ‘arms’, with spending more than doubled in five years, at a time when their Japanese rivals spend less than 1% of GNP on ‘defence’.

The Japanese ruling class have ploughed back the surplus extracted from the labour of the working class into industry, one of the reasons for their out-stripping all their capitalist rivals except for the United States.

Without a powerful industrial base, armaments do not increase the military strength of a country. Quite the reverse. Yet the Tories, and unfortunately under pressure, the Labour leaders too, have increased the production of what amounts to scrap metal, rapidly obsolescent arms.

This will neither frighten the Russian bureaucracy (who treat British capitalism with open contempt) nor assist the standing of capitalist Britain with her allies.

Why then this crazy stockpiling? Merely a frenetic attempt to restore the long gone power of the pre-war days when Britain was second only to the USA as a world force. But now Britain is regarded as a poor country by her rivals: twentieth in the league of industrialised nations. “Defence” and “law and order” would be the only exceptions to Tory cuts.

But the Tories’ determination to drive down workers’ living standards and to increase big business profits is not a personal whim of Thatcher and Joseph. It is caused by the economic crisis of British capitalism which has polarised class society into two fundamental camps, the workers and the capitalists.

It is false for the right wing social-democrats or even Tribunites to weep at the ‘unfair’ attitudes of the Tories. Their programme is dictated by the economic impasse of capitalism. The failure of Keynesianism leading to inflation has led to attempts to return to orthodox methods of deflation of the past. Neither will help workers.

But to carry out such a policy the Tories have to weaken workers’ resistance and try to undermine their defence—the unions. Even after the experience of the Heath government the capitalists need to return to economic and social confrontation. On the road of capitalism there is no alternative.

In 1979 in Britain, only one worker in three is employed in manufacturing industry. Sir Adrian Cadbury, the chocolate boss has projected that it will shortly be one in five. In the last fifteen years 1.5 million manufacturing jobs have been lost in Britain.

But the number employed in West Germany, France, Japan and Italy has increased by more than a million over the last ten years. That process has begun to seize up in those countries too as a consequence of the organic crisis of world capitalism. But within this world crisis is the special crisis of British capitalism.

In the past the only argument for capitalism was that in their greed for gain, capitalist reinvestment in industry increased the wealth of society. But in Britain the capitalists invest in unproductive money-spinners like land.

The failure to invest in the production of real wealth, i.e. manufacturing industry, and in particular machinery and equipment for production means that Britain is falling further and further behind her rivals. Despite higher subsidies which pay for half of all manufacturing investment it is increasing at a snail’s pace.

The capitalists invest in land, property speculation, tourism, stock exchange speculation, advertising, service industries, casinos, horse racing, antiques, painting and jewellery, anything but in manufacturing industry.

In 1976 they invested over £2,000 million abroad. Now the City of London wants Mrs Thatcher to open the floodgates by abolishing the dollar premium on investment abroad.

So, despite the sacrifices of the last five years the working class in Britain has the lowest wages of any capitalist industrialised country. Only by exploiting cheap labour can British capitalists compete in world markets; but in today’s world, cheap labour is not enough.

In productivity of steel Britain has been outclassed. Now, due to massive investment, Japan produces 45 cars in the time it takes workers in British factories to produce 7. Of all the radios sold in Britain, a mere 4% are made in this country,—and exports are negligible!

Britain 20 years ago had 98% of the world market of motor bikes. They now have 2% of the. British market! Half of the cars, televisions, fridges, vacuum cleaners and washing machines sold in Britain are imported. 25% of all manufactured and even more semi-manufactured goods are imports.

And British manufacturers’ share of markets at home and abroad continues to fall. Denis Healey has pointed out that “in 1979 manufacturing will be unable to stand up sufficiently to competition either in home or export markets.” The Treasury forecast greater import penetration and a deterioration in the volume of trade in manufactured goods. Healey has also estimated that manufacturing exports would rise by only 7% while imports rose 14%.

In the vital sphere of machine tools, British capitalism is also losing ground. Imports of agricultural machinery (expensive sophisticated technical equipment) has risen 197% in ten years. Exports have grown by only 31%. Investment in the machine tool industry has fallen sharply in real terms since 1970, particularly in new building.

In 1970 £18.6m of plant and machinery was manufactured; by 1977, this had declined to £17m. The amount of new building collapsed from £5.2m to £2.2m (all at constant 1975 prices).

British capitalism is being defeated on both home and international markets because of failure to invest in manufacturing industry. There is a contradiction between finance and industrial capital. Service industries are more profitable.

The ‘Economist’ again points out “without a revival in profitability, why should the average British company invest more? In 1976, it was making 16.8% on capital measured at historic costs, compared with the 15% it could have got simply by depositing cash risk-free with local authorities.”

Interest rates are so high that it does not pay the capitalists to invest in machinery. They produce not for need, but for profit. The contradictions of capitalism have so developed in Britain that the essentials have been forgotten—real wealth is manufacturing wealth.


Reforms promised by Labour, which we support, could not be carried out on a capitalist basis. Capitalism must press for counter-reforms: wage cuts and slashed services, i.e. the Tory programme. At this moment big business do not want a Labour government.

This crisis poses a nightmare future for the real producers of wealth, the working class. Britain remains potentially an enormously wealthy country, but only if the resources of society are taken over by the working class.

The nationalisation of the banks and insurance companies and the 200 monopolies controlling 85% of the wealth of the country (with minimum compensation on the basis of need) is indispensable to release productive forces from the fetters which bind them.

Planning production would mean the maximum production of goods to benefit working people, and the absorbing of the unemployed into productive work. The £4,000m paid out in dole could be used for social purposes. Used in productive industry the unemployed could produce £20,000m extra wealth. £20 a week for every family!

Only about 80% of productive capacity is now in use— because of the limits of the market. 20% more goods could be produced by this alone with a socialist plan of production. In addition a democratic plan of production would entail workers’ control of management of industry and the state.

Without the fear of redundancy if they produced more, the workers would respond with invention, initiative, elan and enthusiasm. A growth rate of 20% a year would be possible.

A socialist Britain could begin with at least £70 a week for every family, including pensioners, widows and the sick. Skill and technique would be used to the maximum extent. Within a few years Britain’s factories could be completely reequipped.

At most a 35-hour week would be worked, while rapidly a 4- or 5-hour day with a 4-day week could be introduced. This would allow the involvement of the whole population in politics, and give the working class the necessary time to run industry and state.

The new techniques of computers and micro-electronics would make this entirely possible. Under capitalism, though, they would merely put further millions out of work.

Professor Curnow of Sussex University predicts that on introduction of micro-computers, “The first jobs to go will be in the office and light assembly work in factories, mostly carried out now by working housewives.” “The typist, secretary, lower white collar management man will become redundant,” he says confidently (‘Daily Express’, 8.12.78).

Professor Stonier of Bradford University predicts that 90% of manufacturing jobs will be abolished by the silicon chip in 30 years.”10% of the population will provide all the material things we need,” predicts the professor.

New technology will mean unemployment under capitalism, but leisure and plenty with a planned economy.

“The basic week will be four days of 5 hours a day, and people will be moving back into the education system for the whole of their lives.”

This would be impossible under capitalism. But in a democratic socialist Britain, it could be achieved in 3, not 30 years.

Such a state would be a beacon to workers of Europe and the world. A socialist appeal by British workers would be followed by the collapse of capitalism in Western Europe and the fall of Stalinism in Eastern Europe. Internationalist policies and a socialist United States of Europe and the world would lead to the scrapping of the lunacy of arms production.

£1,000,000,000,000 is wasted throughout the world every four years on arms. The greater part of the world’s scientific resources is spent on preparing ever more devilish instruments of destruction. Used constructively, all these resources could abolish poverty and disease, racialism and war. It would mean the complete transformation of mankind.