From International Socialism 2 : 8, Spring 1980, pp. 95–104.
Transcribed by Marven James Scott, with thanks to the Lipman-Miliband Trust.
Marked up by Einde O’Callaghan for ETOL.
Geoff Hodgson and Bob Rowthorn have both made replies to Jonathan Bearman’s Anatomy of the Bennite Left (International Socialism 2 : 6). This article attempts to take up the points raised by both, particularly in relation to the Alternative Economic Strategy.
Hodgson’s strategy could be defined something like this: an advance towards socialism through two agencies; on the one hand the mass movement and workers’ councils, and on the other a Parliamentary majority. Supposedly, these are to act in conjunction.
Hodgson tells us that the ‘insurrectionist’ road to socialism has not worked since 1917; that the reformist road to socialism has never worked; therefore a third road to socialism is required, one that is a synthesis of both.
To this end a revolutionary party is discarded because it lacks mass support. Instead the Labour Party, “the largest working class party”, although a party whose mode of operation is inveterately reformist, is chosen in preference. From inside the Labour Party, the argument continues, “a revolutionary current” will press for this centrist, dual strategy.
Clearly we can see from this that the version of “centrism” which Hodgson and co. have formulated stands in contrast to the traditional description of “centrism”. They have formalised and structured “centrism” as a decided strategy, whereas centrism in the past has been comparatively unstructured and unformalised, usually described as vacillation between reform and revolution.
Inside the Labour Party, the “lefts” will aim to move the Labour Party towards centrism by tactically supporting and developing the programme and Alternative Economic Strategy of the reformists. Hodgson and co. believe this process will help to elevate the struggle for a socialist transformation. If there is a distinction between the Hodgson current and the rest of the Bennite left it is that they claim to have no faith in the solutions offered by the Alternative Economic Strategy – they even believe they are totally undermined by the world crisis – but what they do see in the Alternative Economic Strategy is a means of mobilising workers.
The view that we need a “new, third road” to socialism, which will neatly step in between parliamentarianism on the one hand and revolution on the other, is certainly not new; Kautsky’s formulation of the position before 1914 is perhaps the clearest example, but more recently there was the case of the Popular Unity government in Chile in 1970–73.
Indeed the Chilean case provided an illuminating test for the theory. On the basis of an electoral alliance between the Socialist and the Communist Parties, backed up by extra-parliamentary activity – strikes, mass demonstrations, even occupation of the land by peasants and the factories by workers – the Popular Unity government was brought to, and remained in power during these years. In words that exactly mirror Hodgson’s today, Luis Corvalan, General Secretary of the CP, maintained that “in the conditions existing in Chile there is a real possibility to... march towards socialism without civil war, although naturally maintaining an intense class struggle” (Marxism Today, September 1973).
More interesting than the similarity is the date; for on September 11th 1973, the Chilean army carried a violent and bloody coup; slaughtering 30,000 working class militants (the equivalent of nearly a quarter of a million in a country the size of Britain), and torturing countless others. Why was it allowed to happen? Basically because Popular Unity utilised the existing state machine, and was therefore forced to defend it. There is no “third road” between utilising the state and smashing it, either you do the one or the other.
So once in power Popular Unity was forced to attack “excessive” wage demands (as at El Teniente – the biggest copper mine in the world), leading to disillusion and opening up the leadership of working class struggles to fascists and the extreme right. They were similarly forced to defend the state’s monopoly of armed strength, with Corvalan again denouncing those “trying to drive a wedge between the people and the armed forces” at the same time as the army itself was moving into the factories in Concepcion and Santiago one by one to weed out all those who would have organised against the forthcoming coup. Popular Unity even did nothing to defend rank-and-file sailors who came to them pleading for some action against the plans for the coup, but who were then court-martialled for doing so.
Is it any wonder then that the coup succeeded? The truth – the tragic truth – is that once they were part of the state machinery Popular Unity did not, could not, lift a finger to help those who were struggling against it. Worse than that, their very traditions, their socialist rhetoric etc. actually provided a left cover for the preparations for the coup, and demobilised those who would otherwise have resisted them.
The incredible truth is that the left reformists actually seem to want us to repeat these experiences. Hodgson himself, for instance, tells us:
“For brief moments in their struggle a healthy, mutually reinforcing dialectic between mass struggle and constitutional reform emerged ... Chile is a distorted and very limited example of a dual strategy that would have a much greater chance of success in an advanced capitalist democracy if led by a genuine socialist coalition, without narrow parliamentary illusions, but with a necessary majority in Parliament.”
The “new third road” is not new. It has been tried and found woefully lacking. Nor is it a third road. Because the existing state is seen as the organ for putting the “socialist strategy” into practice, ultimately – i.e. when they are in power- it ends up as that very familiar cul-de-sac, the parliamentary road to socialism.
But, the faulty reasoning behind Hodgson’s position certainly does not ensure its defeat. Indeed in present circumstances, with an adverse balance of forces, the world crisis, and a marginalised revolutionary left, centrism has a greater appeal. It is this development which is important to revolutionaries.
In similar circumstances, in the 1930s, Trotsky monitored the development of “centrism”. About the German centrist party, the Sozialistische Arbeiterpartei, he had this to say: “Under the pressure of circumstances, centrism can go far in analysis, evaluation and criticism: in this realm, the leaders of the SAP ... repeated much of what the Bolshevik-Leninists said two, three or ten years ago. But the centrist stops short fearfully when faced with revolutionary conclusions.” He concluded: “... a centrist is a knife without a blade.” 
There is another reason why centrism, a current inside the Labour Party, is a knife without a blade. It lies in the simple fact that they are a current inside a party and not a party themselves.
Modesty must be required by all revolutionaries, so I am not making any exaggerated claims about the SWP. It is not a mass party, nor is it likely to be in the next few years; indeed, it faces a day to day fight to keep shape as a party. But then, at least it is a party, capable of undertaking its own, independent, agitational work; independent that is of other parties, and not of the working class.
But where was the Labour Party, or any group submerged within it, during the engineering strike? During Robinson’s sacking? Or during the steel strike?
All other Labour lefts have failed, this much at least appears to be common ground to us all. This failure is usually attributed to doctrinaire “parliamentarianism”, but the role of the trade union bureaucracies is certainly just as important. In 1932, the ILP didn’t leave the Labour Party just because it was unable to alter the Parliamentary Standing Orders. It left because it had been consistently defeated beforehand by the trade union block votes that had made its position untenable. In 1937, when the Socialist League dissolved, it had been thoroughly defeated for the past five years at every attempt to build a mobilisation against fascism, a “united Front of the Working Class Against Fascism” as it was called, by the manipulations and mass votes wielded by Ernest Bevin and Walter Citrine. And in the 1950s, the Bevanites were not broken by parliamentarianism, but by the “triple alliance” of Deakin, Lawther and Tomlinson.
Jonathan Bearman was, it is true, mistaken in his prediction of the outcome of the last Labour Party Conference. The unforeseen factor was: how far were the bureaucracies prepared to go to ditch Callaghan and the antiquated system of decision-making.
But the fact that this will help the left does not mean that it was a victory of the left. In 1931 the trade union bureaucracies ditched Macdonald and thus assured his downfall, but they soon went on to defeat the left. The same could happen this time. The basic question of the trade union bureaucracies was unaffected by the last Labour Party conference. Hodgson is well aware of this point. At the “Activists Conference” held by the Labour Co-ordinating Committee in Manchester in November, he raised the matter of the block votes, but then added in qualification: “I have no answers to this problem.”
But while every Labour left has failed, they have all revitalised the Party when it has needed it most. The obvious example is the challenge to “gradualism” by Stafford Cripps and the Socialist League. At a time when the Party was at a very low ebb, Cripps and the League helped to win back many activists who would otherwise have been lost to the Party. It was, if you like, a kind of reformation in the reformism.
Something similar is happening in the Labour Party today. The Bennites – and indeed the centrists – are reforming reformism. Ian Birchall described the role of the left very well recently:
”In a long established party, such as the British Labour Party, the relationship between the leadership and the left is harmonious and functional. When Callaghan attacks Benn he simultaneously (a) reassures the bourgeoisie that he will have no truck with leftist ideas and (b) reassures the constituency left that Benn is a threat and that it is worth their while staying in the party. When Benn attacks Callaghan he simultaneously (a) reassures the bourgeoisie that Callaghan is a “moderate” and (b) reassures the constituency left that there is still a fight on.” 
The question of support for the Alternative Economic Strategy is one on which there is a good deal of common ground between the politics of Geoff Hodgson and Bob Rowthorn. Bob Rowthorn is a leading member of the Communist Party, an organisation which, unlike the left of the Labour Party, is declining both in membership and influence. It is this fact which makes the position he advances rather more difficult to understand than Hodgson’s; Hodgson can at least look forward to the possibility of his party winning the next election. For the Communist Party the outlook, especially in electoral terms, is pretty bleak.
There are two central issues raised in connection with the Alternative Strategy: the question of the “British crisis”, and the economic and political consequences of pursuing the Strategy. On both issues there are fundamental differences between the position of the SWP and that of Hodgson and Rowthorn.
Both Hodgson and Rowthorn spend a great deal of time demonstrating that the crisis in Britain is worse than the crisis in other advanced countries. Rowthorn goes much further in his conclusions and therefore his support for the Alternative Economic Strategy. But let us start with the issue of the crisis itself. To dispense with one straw man straight away: the SWP has never argued that the British crisis is merely a ‘spin-off from the world crisis; we have argued that it is part of the world crisis. Even the most cursory reading of our publications shows that we are well aware of the severity of the crisis in British capitalism. To give just one example, in the very same issue of International Socialism that contains the article by Hodgson that Rowthorn quotes so approvingly, Nigel Harris wrote:
“Britain shows a much more exaggerated form of the general trend of deindustrialisation, and it is this which underlies the sporadic hysteria of the British ruling class – the relative decline in the capacity to compete of this bit of the world system.” 
“Since at least the mid 1950s, British capitalism has apparently had a consistent tendency for profit rates in domestic industry to be low relative to its nearest rivals.” 
“By now, the British workforce is, relative to the workforce in other advanced capitalist countries, required to work increasingly hard, for longer hours for lower pay, and, because of the relatively low capital per worker, at disastrously low levels of productivity: at some 40% below the levels of Germany and France in manufacturing in the mid-1970s.” 
In fact, Nigel Harris does two things which neither Rowthorn nor Hodgson achieved in their arguments: he examines thoroughly why the crisis in Britain is worse, and in doing so, he locates the position of Britain in the world system. Hodgson and Rowthorn both produce only a few figures showing how the crisis is more severe.
Neither are unaware of developments in world capitalism. The reason for the concentration on the crisis in Britain is not technical, it is political. In order to make out a case for support for the Alternative Economic Strategy, tactical or not, they need to insist on the specificity of the British crisis.
While denying that they are talking about an independent path to socialism in Britain, in practice they have both dismissed the rest of the world for the foreseeable future except in so far as they wish to modify Britain’s relationship to it.
Rowthorn takes the “Britain as a weak link” argument much further than Hodgson: reading his analysis might lead one to think that only Britain was suffering a serious crisis at all. National specificities curiously fade when one crosses the English Channel: we are told that the “Continental bourgeoisie is far more secure than in 1917, and it would be lunacy for the British left to base its entire strategy on the assumption of a simultaneous European revolution.” For someone with such acute sensitivity to national distinctions “the Continental bourgeoisie” is an odd animal to refer to. Is the Turkish ruling class stable? Is Portuguese capital more secure than British capital? Are we dreaming when we hear about revolts in Poland or major strikes in Italy?
The fact that Britain is suffering more severe effects than some other advanced capitalist countries from the world crisis, and that because of the world crisis competition is hotting up between national capitals with the effect that they can less and less afford to bail out weak links in the system, is important for revolutionaries. But the stress that is placed on the specific crisis in Britain by Hodgson and Rowthorn excludes almost totally any sense of the world nature of the crisis, and leads them away from a realistic analysis of Britain’s place within it.
There seems to be no significance for them in the fact that the crisis in the steel industry for example, is a worldwide phenomenon, with thousands of jobs lost not only in BSC but in the Ruhr, Alsace-Lorraine and Indiana/Ohio. The struggle of the French steel workers to save their jobs is, it seems, of no interest in Britain. Yet, it is surely a crucial task for revolutionaries at the present time to counter the propaganda of the government and BSC about the viability of British steel with facts about the international nature of the crisis. And it is not just steel; the same could be said of the world shipping industry, the car industry and heavy engineering.
On a wider level, unemployment has risen in all the advanced countries: 8 out of 12 major OECD economies have unemployment rates above 5%. The OECD predicts an average unemployment rate of 6% by the end of 1980. Investment is slowing down, and growth in the whole OECD area is forecast at only 1%, assuming no further important rises in the oil price. 
Because of the stress placed on the British crisis, the main problem for Rowthorn becomes a battle for higher productivity and the regeneration of the British economy by a left government trying to advance to socialism while the rest of the world remains under capitalist domination.
“If the Alternative Strategy could only raise Britain’s long-term growth rate up to the level recently achieved by other capitalist countries during the recession, this would be a significant achievement and would allow for a modest rise in living standards ...
Britain must pay her way in the world. This is a harsh fact of life which applies no matter what kind of economic system or what kind of government we have.”
This, according to Rowthorn is just the way things are. In this situation import controls, control over finance capital and the multinationals, compulsory planning agreements – are supposed to be measures which will be forced upon the capitalist class, though only by a high level of struggle on the part of the working class. He distinguishes himself from parliamentarianism by his insistence that there will be stiff resistance to these demands on the part of the ruling class. The mobilisation by the workers to achieve these aims and the improvements in the economy will build working class consciousness and confidence to proceed to a complete socialist transformation.
In practice, what would be necessary for a boom in British capitalism to take place? Rowthorn believes that adjustments in the pattern of Britain’s trade, combined with controls over investment funds would be sufficient to provide the conditions for a recovery. Does this really stand up to examination? The British capitalist class has consistently invested less per head than almost any other advanced economy since the war, and a great deal less than Japan and Germany, in productive activity. This low investment came on top of an already declining industrial base. Britain invested only 15% of GDP throughout the 1960s, compared with 25–27% in Germany and up to 37% in Japan. Even Rowthorn’s co-thinkers realise as much when they admit that “the economic adjustments required ... involve, according to the Cambridge Economic Policy Group model, for example, a 50% increase in manufacturing investment, over and above its trend rate, for at least a decade.” 
While the Cambridge economists suggest that blanket import controls, against foreign manufactures sustained over a long period of time, would help, they are not enough. “Import controls are a necessary, but not a sufficient, condition for starting a successful reconstruction of industry; they would have to be supplemented by supply policies, whose character and effectiveness would depend on the balance of political forces.” 
These “supply” policies would necessitate state-directed investment, but also they would require the incorporation of the trade unions into an “aggressive industrial strategy”, because such a strategy would also necessitate increased productivity and lower spending on social services and a long-term stringent incomes policy, “money wage-settlements should be reduced to 5% a year after 1980 (enforced by wage-control if necessary)”  or in other words, a huge wage cut in real terms, with inflation running at 20% or more. All, of course, in the cause of long-term regeneration. The scale of the problem in Britain, after decades of lack of investment, is too large to be overcome by a temporary boom generated by import controls.
The contradiction for Rowthorn is that Britain’s crisis must be severe in order to justify support for the Alternative Economic Strategy; but on the other hand it must not be so severe that a left reformist government is incapable of solving it without attacking the working class.
Bob Rowthorn does not want to see attacks on working class living standards, or social services. He wants to see an expansion in the British economy precisely to raise workers’ living standards, and thereby workers’ self-confidence. In reality, his strategy would require defeats for the working class quite incompatible with his political objectives.
Hodgson spells out the criteria for his support for the Alternative Strategy as follows: “The most central question is: will the class struggle be advanced by critical and but vigorous support for this strategy or does an alternative and effective means exist?” 
Up to now at least, the Alternative Strategy can be shown to have been totally ineffective in advancing the class struggle. Furthermore, practical support for it leads to actual support for demands like incomes policies which have been fought against for many years by the most militant sections of the working class. It also leads to ignoring and even despising the demands which workers themselves actually throw up in the course of struggle.
It is the worst form of substitutionism and utopianism to draw up a set of demands and then try to impose them on real struggles. As Marx wrote in 1875, “Every step of real movement is more important than a dozen programmes.” 
In regard to the demand for import controls, Hodgson makes a revealing statement:
”The argument for import controls is analogous to the socialist argument for nationalisation within capitalism. These advances do not alone bring socialism but they are necessary prerequisites, and the struggle for them can raise working class consciousness and power. At the same time they can be abused, as nationalised property is abused by the bureaucracy in the Soviet Union. Import controls can be abused in the nationalist or reactionary way. But we must not confuse the policy options associated with a reform with the reform itself. We support the principle of nationalisation but oppose its abuses. The same is true for import controls.” 
The question here is not one of “abuse” – it is of the role of these “policy options” under capitalism. In a capitalist system, import controls will be used to serve the needs of capitalism, not the working class. Their role in a workers’ state i.e. in a situation where the working class has taken state power, and smashed the existing state machine, is quite a different matter. When revolutionaries raise the demand for nationalisation in a non-revolutionary situation, they do so to defend the working class, to insist that it should not be made to pay for capitalism’s crisis, not because they have any illusions that thereby they are creating a bit of socialism. A successful defence of jobs in this way develops class consciousness in an anti-capitalist direction. The demand for import controls is in no way analogous: where-mobilises workers it is in partnership with the interests of capital, since the whole point of demanding such controls is as part of a drive for “national recovery”.
It is here that we come to the crux of the disagreement between ourselves and those who support the Alternative Strategy from the left Hodgson and Rowthorn both go to great lengths to show that their support for import controls is based on an “internationalist” perspective: they don’t want to export unemployment, or whip up chauvinism. But they completely ignore the real world in their protestations. The material base for the demand for import controls will not be a revolutionary, internationalist one: the demand will mobilise the most backward sections of the working class behind the most right-wing, class collaborationist trade union leaders.
It has already done so: the most active supporters of import controls have been the leaders of the textile and footwear unions, leaders who have supported incomes policy to the hilt, and have never led a fight in their lives. To quote Alec Smith, General Secretary of the National Union of Tailors and Garment Workers in a recent letter to the Financial Times:
“Workers in the industry have an important part to play in continuing productivity improvements. They recognise the necessity to reduce unit costs through improved efficiency ... Given this level of good will, we start with a considerable advantage. What is now needed is the support of the Government ... through stemming the flow of, often unfair and frequently illegal, imports.” 
Or the leader of the National Union of Hosiery and Knitwear Workers:
“Whilst we have always accepted it as a duty to help developing countries, this has developed too far, and the continuation of buying low-cost goods means that people are buying unemployment for those who work in our industry.”
And having warned his members about “wreckers” who have suggested that he and his fellow bureaucrats have “taken too much notice of the employers” he concludes:
“With all its problems and disagreements, this Island of ours is the greatest democratic land throughout the world.” 
So much for internationalism.
In the past few years, we have witnessed all too clearly that sections of the working class – the most backward sections, many in declining industries – can be mobilised by racism behind fascist organisations. The deepening crisis could potentially increase that mobilisation. Demands for import controls, however motivated, will inevitably fit into any growth of racism and chauvinism.
Obviously, revolutionaries seek to expand the control of the working class over all aspects of life. But that is quite different from the idea that workers should concern themselves with decisions about the management of capitalism, with questions about the relative benefit of this or that investment choice.
Once it is accepted that workers ought to help take such decisions, rather than developing resistance to the attacks of capital, then the whole independence of the working class from capital is jeopardised. It becomes much easier for it to be incorporated, to be drawn behind demands for running capitalism this way or that. A capitalist state can only operate by capitalist criteria. We can force it to act one way or another, to grant reforms and so on; but only by remaining completely independent of it are the gains made real ones. Controls which will regenerate capital cannot be anti- capitalist, regardless of where the demand for them comes from. The fact that they may imply certain costs or a certain lack of freedom for the capitalists is only relevant if they do not at the same time expand capital and profits. But the whole point of such controls as Bob Rowthorn repeatedly says, is as part of a programme of “national recovery”.
In short, by supporting the Alternative Economic Strategy, Hodgson and Rowthorn will not be developing class consciousness and power but will be helping to give a “left face” to what is essentially a programme of class collaboration to “solve” the British crisis.
Bob Rowthorn suggests that the only choices which face us are accepting the Alternative Strategy, or making ultimatist demands for immediate socialist revolution. He accuses us of doing the latter, of being totally unrealistic and “sounding very revolutionary”.
In fact, there are many reform demands which can be raised now, which would lead to immediate benefits for working class people, without tying the movement to a class collaborationist strategy.
Rowthorn’s analysis is lacking in any sense of the enormous wealth which is generated and wasted by capitalism, wealth which could be used for the purposes of raising living standards. Just to look at a few examples of demands which could be raised:
In 1978 the British ruling class spent £7,493 million on defending itself, not including £1,347 million of the police force. It spent only £5,073 million on housing. The Thatcher government is raising spending on the army and police, while cutting the amount spent on social services.
It also intends to spend £20,000 million on developing a nuclear programme which is both socially unnecessary and dangerous. Slashing all this waste expenditure could bring immediate benefits.
Rents, dividends and net interest accruing to individuals amounted to £13,671 million in 1978, or nearly double expenditure on the National Health Service.
Debt interest paid out by local authorities amounted to about £3,000 million, or 17% of total expenditure. 
Either the abolition of rents and the writing off of debts, or less radically, a freeze on rents and a ceiling on interest rates would produce an appreciable effect on living standards.
The expropriation of second homes could wipe out homelessness overnight, but without even going that far, action on debts and interest could free local authorities to build more houses.
Unemployment could be cut by the implementation of a total overtime ban, the reduction of the working week and longer holidays. These have been demands put forward by the Right to Work Campaign for years, together with occupations of factories threatened with closure and the demand for nationalisation without compensation.
None of these demands calls for insurrection tomorrow. What they do do is to lay the blame for the crisis where it belongs, and to insist that workers do not pay for the mess which capitalism is in.
As socialists, we surely take as our starting point that capitalism produces sufficient wealth to provide enough for all, but because of the ownership and organisation of production, that wealth is wasted or even destroyed. Certainly capitalism is incapable of providing decent homes, social services and living standards for all, but to read Rowthorn’s analysis, one would think that the world was poor in absolute terms, not in terms of the way production is presently organised.
However much Rowthorn’s ideas are meant to be used in an anti-capitalist direction we have already seen how they will be used by the reformists and trade union leaders, both ‘left’ and right. They will be used for protectionist, chauvinist even racist purposes – quite the opposite of what he intends. He and Hodgson will both find themselves acting as left cover for those whose aims are anything but revolutionary.
Rowthorn and Hodgson’s perspective of a socialist Britain going it alone in a sea of hostile capitalist states is essentially Utopian. The central problem for revolutionaries in Britain is not that there will be a revolution tomorrow, and we will be isolated. The crucial task is to mobilise workers against capital on a day to day basis, strengthening class consciousness, generalising and politicising struggles. To do that means exposing those who want to co-operate with capital – reformist politicians and trade union bureaucrats. The Alternative Economic Strategy does the opposite of exposing these people: it lets them off the hook of having to lead a real fight.
Only by resisting all attempts at class collaboration, insisting on the independence of the working class, can a movement be built to challenge capitalism in Britain, and to respond with effective solidarity to the struggles of workers in the rest of the world.
1. L. Trotsky, Once Again, Whither France?, in On France, 1979, pp. 125–6. Incidentally, the SAP were much to the left of today’s Bennites.
2. I. Birchall, Portugal & Social Democracy, IS 2 : 6, p. 77.
3. N. Harris, Deindustrialisation, IS 2 : 7, p. 76.
4. Ibid., p. 77.
5. Ibid., p. 78.
6. OECD, Economic Outlook, December 1979.
7. A. Singh, The Reconstruction of U.K. Industry, in Deindustrialisation, ed. F. Blackaby, 1979, p. 220.
8. Ibid., p. 223.
9. Ibid., p. 209.
10. G. Hodgson, Britain’s Crisis, IS 2 : 7, p. 87.
11. K. Marx, letter to Bracke, May 5, 1875.
12. G. Hodgson, op. cit., p. 89.
13. Financial Times, 29 February 1980.
14. Address to the National Union of Hosiery and Knitwear Workers Conference, 1975.
15. CSO, National Income and Expenditure, 1979.
Last updated on 17.8.2013