Ted Grant

Britain in Crisis

Written: September 1977
Source: The Unbroken Thread
Transcription/Markup: Emil 1998
Proofread: Emil 1998

Within the web of the general crisis of world capitalism exists the special crisis of British capitalism. In reality, for the whole of the twentieth century there has been a decline in the power and position of British capitalism. This has been disguised because of the difficulties, upheavals and revolutionary crises which have faced her rivals, especially between the two world wars.

But even more important has been the relative social stability given to British capitalism by the policies of the leaders of the mass organisations of the working class - the Labour Party and trade unions - in periods of both Tory and Labour governments. In the period since the second world war, there has been a collapse of British power, unprecedented in scope and depth. The only thing that has cushioned the frightful social consequences of this steep decline has been the growth of world trade and of the world market during the world economic upswing.

British capitalism has fallen further and further behind her main rivals. In 1960 Britain's share of world trade in manufactured goods was 16.5 per cent. In 1973 it had fallen to 9.5 per cent.

While her rivals increased their industrial production at a record pace, during the world economic upswing British capitalism increased much more slowly. Consequently, her position relative to her rivals declined.

The National Westminster Bank Review of November 1975 points out that from 1969 to 1974 Britain's National Product increased by 11.4 per cent in real terms. But industrial production only increased by 6.7 per cent in real terms. 'Thus industrial production fell by 5 per cent in relation to the National Product.'

Again, industrial production in the ten years from the first quarter of 1955 to the first quarter of 1965 increased by 35 per cent. But in the next ten years it increased by only 15 per cent.

'Thus the annual growth of industrial production has actually fallen by one half since 1965.'

Productive capacity increased by 35 per cent or 3 per cent per annum between 1955 and 1965, by 22 per cent or 2.5 per cent per annum between 1965 and 1973. Since 1973 the growth rate has been only 1.5 per cent.

The ratio of net investment to value added was 8.6 per cent in 1965. It was only 3 per cent to 5 per cent in 1971-73. Inclusive of investment in petrol and gas it rose in 1974 to 6.3 per cent. But without petrol, for the rest of industry, it was only 4.9 per cent. The ratio of gross investment in industry fell from 17 per cent in 1965 to 14 per cent in 1972 and 1973.

However, as the National Westminster Review says: 'Government statisticians believe that something like 10 per cent of industrial production must be invested in industry each year to maintain the industrial capital stock and make good wear and tear, technical obsolescence...' According to estimates they quote, industrial capital stock increased by 8.6 per cent of industrial production in 1965, only 3.4 per cent in 1972 and 4.1 per cent in 1973. This has worsened since the recession and the following squeeze. The rate of growth of productive potential is now only 2 per cent per annum.

The rate of net investment fell by one-half during 1965-74 and employment fell by 12.5 per cent in manufacturing in the same period. The 'de-industrialisation' of Britain, of which Tony Benn has spoken, is shown by the fact that industrial profits have not been ploughed back but invested in more profitable fields outside industry. 19.1 per cent of industrial production was invested outside industry in 1965. This had risen to 26.5 per cent in 1973.

An OECD report points out that Britain 'has lost ground not only in productivity but in quality, design, punctuality of delivery, and after-sales delivery, and after-sales service...'

The Midland Bank Review of May 1977 says: 'Economic miracles seem at a discount, and the prospect is for no more than a minor upturn in a long recession.'

Manufacturing in Britain accounted for 37 per cent of employment in 1961, and only 30 per cent in 1976, such has been the fall in the rate of industrial investment. With shipbuilding, for example, Britain's share of world production in 1955 was 26.6 per cent; in 1976 it was 4 per cent.

In 1960 Britain's share of world manufactured goods exported was 15.3 per cent, according to statistics compiled by the OECD. In 1975 this had dropped to 8.9 per cent. France and Germany's share remained about the same. France's share of world exports fell only by 0.1 per cent to 9 per cent. But now it slightly exceeds the British share.

Germany's industrial exports, which were about 20 per cent higher in 1960 at 18.2 per cent of world exports of manufactured goods, are now more than double those of Britain.

Italy, the other sick man of Europe, has increased her share of world manufactured exports by nearly half from 4.5 per cent to 6.7 per cent. This is a little over 2 per cent less than Britain, whereas in 1960 Britain's share was three times as great.

The one economy of world capitalism that really developed in the last two decades was that of Japan. In the period of capitalism's impasse, that will guarantee future convulsions. For the moment Japan has outstripped her rivals in development of exports. From less than half that of Britain, at 6.5 per cent in 1960, she has increased her share nearly 2.5 times to 15 per cent - more than 50 per cent higher than the share of Britain.

The USA still remains the world's biggest industrial exporter, though her share of world trade has declined somewhat. It has fallen from 22.8 per cent in 1960 to 19.0 per cent in 1975. But West Germany and Japan are treading on her toes (Japan even in the American market) to anguished shrieks from the industries affected.

The absolutely astounding collapse and enfeeblement of British capitalism can be seen in these figures. In the past, the British ruling class looked down on the 'lesser breeds'. Through the virtually exclusive domination of the empire, they could afford to concede a higher standard of living in the upper layers of the working class and even the working class a whole. Now, Denis Healey, the Chancellor, boasts to industrialists that they have the cheapest labour of all the industrialised countries, big and small. This was true already in 1975 before the 'Social Contract' and the deep cuts in the living standards of the working class.

The United States Bureau of Labour Statistics for 1975 gives the average hourly remuneration in industry, according to preliminary estimates in the leading industrial countries. For the UK it was $3.37. Japan had increased her wage rates by practically three times since 1970 reaching $3.32—a negligible difference from Britain. Now she has outstripped Britain in this field as well!

In France the hourly pay in industry was $5.47. West Germany was $6.21 and the disparity has increased yet further since 1975. Even the pay of workers in formerly backward Italy considerably exceeded that of British workers reaching $5.51 per hour in 1975. The United States rate was $7.26, second highest in the world to Sweden. These wage rates do not take into account the level of prices, which is far higher in all these countries than in Britain. Nevertheless, it is a rough index of how the British workers, from being among the highest paid, have now fallen to the status of the 'coolies' of Western Europe.

One of the peculiar problems of British capitalism is the domination of the City of London and thus of finance-capital. Between 1975 and 1976, 'invisible exports' ie shipping, insurance, banking, dividends from investments abroad and tourism rose by 25 per cent to £13,000 million - more than half the total value of exports. With 9.9 per cent of the worlds' invisible earnings, British capitalism was second only to Wall Street.

The division of interests in Britain between the City (finance-capital) and industrial capital is one of the causes of the steep decline in industrial strength of British capitalism. Concerned only with financial return rather than the production of real wealth in the form of factories, machinery and consumer goods, the City has sapped and undermined the economy of the country. It is these contradictions which have undermined completely the role of British capitalism on a world scale.

The partial turning of Britain into a parasitic rentier state, similar to that of France in the past, has been the result of the export of capital and services such as banking and insurance. A Treasury Report of June 1977, confirms: 'Gross invisible receipts were £13,700 million per annum and that invisible earnings now exceed the value of the export of finished manufactures and, last year, were equal to over half the earnings from all exports of goods.'

'In the recession years of 1971, 1972 and 1975, about one million manufacturing jobs disappeared', according to the Economic Progress Report of the information division of the Treasury of June 1977.

As late as 1970 there were 8.2 million people employed in manufacturing, but in 1977 the total was only 7.2 million. Average production per head in 1977 was only equal of that in 1973. But 1973 manufacturing output-per-person-employed was 15 per cent lower than in 1970! This indicated a critical fall.

The reason for this is the failure of big business to invest the surplus extracted from the labour of the working class. Management Today in its issue of July 1977 admits: 'Investment in British manufacturing industry remains low. Since (1965) total capitalisation per worker has fallen well behind that of Britain's EEC partners and other industrial nations. It is not uncommon to find capital available per worker in West Germany, say, amounting to 2-3 times the British level - particularly in such industries as motor manufacturing.'

In 1972, Japan's investment ratio to Gross Domestic Product (GDP) was 34.4 per cent; West Germany 26.3 per cent; France 26.34 per cent; Sweden 22 per cent; and the UK 18.2 per cent

Thus Britain has fallen further and further behind in the booms and recessions of the post-war period. In 1965 capital expenditure per employee in manufacturing industry was £142. In 1970 this had reached £191 and then fell back in succeeding years to £158 in 1975.

All the measures taken by the government in the post-war period to 'control the economy' have only made the situation worse. However, in the main, the same ills affecting British capitalism have affected her rivals as well. Such is the case with the tendency for the rate of profit to decline. The fall in West Germany and other countries has been as steep. But the surplus in Britain has flowed into property speculations, service industries, investment abroad etc., and not back into manufacturing.

In the Bank of England Quarterly Report of March 1976, it was estimated that the 'real' (ie after interest and other charges) return on capital employed by industrial companies fell from about 11 per cent in the early 1960s to around 4 per cent within the decade, and was down to 2 per cent in 1974.

The OECD confirmed this by pointing to the fall in rates of return on capital employed by industrial companies from about 12 per cent in the first half of the sixties to 4 per cent - 'among the lowest in the OECD area'.

In their blind greed for profit, each monopoly, combine, bank trust or individual capitalist is only concerned to maximise its returns, without worrying about the resulting effect on the economy as a whole. Thus the enormous speculation in property until the bubble burst recently. Now there is as much speculation in agricultural land as there was formerly in building property. The money pouring into agriculture matches that still pouring into buildings.

Despite a heavy premium on money invested abroad, it remains at a very high level, reaching £1500 million in 1976. Lavish inducements have been given to industry and a 'bonanza' of nearly £2000 million a year extra profit made out of the limitation of wages by the Labour government's 'Social Contract'. In spite of this, investment is still very sluggish in 1977 and according to projected figures, may reach an increase of only 3 per cent over the low levels of recent years.

This means a further falling behind for Britain. The 100 monopolies which control 80 per cent of British exports use currency fluctuations to increase their profits rather than to increase the share of Britain on world markets. Consequently the situation for British capitalism is actually worsened. Prices of imported manufactured goods rise, but British capitalism does not gain even the advantage of a breathing space for new investment. The monopolies will not increase investment to increase capacity because their market abroad is not increased and inflation further limits their market at home.

As The Director of June 1977 cynically observes '...in a world of complex products, multi-national corporations, oligopolistic competition, price leadership and price discrimination...short term exchange rate changes are likely to be regarded as a windfall addition to profits.'

During the course of the post-war period, the 'Welfare State' was the theme of the speeches and articles of the right wing and left wing reformists. The 'difference' between Britain and other countries was emphasised by the right wing theorists like John Strachey, Douglas Jay, Anthony Crosland, Roy Jenkins, and others. In this, they merely echoed the propaganda of the spokesmen of big business.

Now nothing is left of the 'Welfare State' except the shell. In comparison with most of the main capitalist countries, the British workers are worse off in welfare expenditure. More of the GNP of many of these countries goes on transport, health, education, social services and unemployment pay, than in Britain. This was so even before the drastic cuts of 1976 and 1977.

The expenditure by the state and its share of GDP was not much different in Britain to that of her main European rivals, contrary to the poisonous propaganda in the media. The massive cuts of the last three years, in fact, must have brought state expenditure's share of GDP below that of her major competitors.

These cuts have been mainly in public sector investment, because the local and state authorities have found it difficult, especially with an inflation rate of 17 per cent, to cut actual expenditure. It has been estimated by government statisticians that, on present levels, by 1978-9 public sector investment will be back to the level of 1965, in real terms, 13 per cent below the average since 1966.

This will mean a further fall in the 'social wage' in coming years. As an article in Management Today of July 1977 cynically comments: 'Perhaps because of the fanfare with which this was introduced, the cost of the British welfare state has ever since been the main target of those who reject the phenomenon altogether...'

John Strachey, who wrote Contemporary Capitalism as an apology for the policies of right wing reformism, must be turning in his grave. If the contemporary right wingers are not writhing it is because those in the Cabinet and government have, as predicted abandoned all the false shibboleths of reformism and adopted instead a programme of 'extremist' Tory measures to try and save capitalism. Of course they will be impaled on the contradictions this engenders in the struggle between the classes for the division of the national product produced by the labour of the working class.

So far as health expenditure is concerned, despite the former fame of the National Health Service, Britain is falling behind in her percentage of GNP devoted to health. In the field of medicine and health care the UK spends 4 per cent of the GNP. Her main rivals spend far more: Holland 5 per cent; West Germany and France 6 per cent; Sweden 7 per cent; and the USA 6.5 per cent.

In fact in practically every field of social services Britain is behind most of her rivals. This should give her an advantage in the field of competivity. Her industrialists have the lowest wages to pay and the highest subsidies; yet they are falling further and further behind.

The continuation of sluggish production is due partly to the measures of the government in the alleged fight against inflation. These were, in reality, measures to cut the share of the working class in the national product in order to increase the share of the capitalists, in a vain endeavour to give a push to investment.

Writing for the literate members of their class, the journals of capitalism are sometimes brutally frank. Thus Management Today of July 1977, says on the so-called Social Contract, 'the unions...accepted what was, in everything save the name, an enforced restraint of wages.'

The Economist, right wing Tory journal, points out that the 'stage 2 agreement...cut real earnings by a remarkable 7 per cent. This is a signal achievement. No previous post-war income policy, statutory or voluntary has achieved such a gap between pay and prices.' (23 July 1977)

The real secret of the world economic upswing was the dovetailing of a whole series of factors, all interacting on each other. One of them was increased division of labour with the greatest increase of world trade for a whole historical period. This led to a dismantling of tariff barriers and many other obstructions to trade. Another factor was the development of new industries on the basis of the expansion of the world market

This in turn led to increased standards of living in the industrialised countries. Increased super-profits were wrung by the industrialised countries from the colonial world, and a whole series of other factors led to the expansion of the market. This in turn led to an explosion of investment in the capitalist world. Investment of a great part of the surplus extracted from the labour of the workers is the vital essential for the development of an economy. Most of the OECD countries were re-investing 25 per cent of total output each year. In the inter-war period the average had been less than half that, at 12 per cent. It was usually less than 10 per cent per annum in the nineteenth century. Since the war, Britain's investment has been lower than that of her rivals.

British capitalism for the whole of the twentieth century has been sluggish in investment. Previously she relied on her entrenched position and her accumulated wealth and industrial power.

All these advantages have disappeared. Even in banking, the French and German banks are now bigger than the British banks. The Banker of June 1977, laments: 'Our list of top 300 banks in the world...reveals sharp declines in the rankings of the major British banks. No British bank is amongst the ten largest banks. Barclays has slipped to twelfth place, National Westminster to twentieth, Midland to fortieth and Lloyds to forty-second place. At the other end some merchant banks have dropped out of the list altogether. Japanese, French and German banks have taken up the running.'

Thus even the City has not been exempt from the general decline of British capitalism.

With the change in the world economic outlook the situation has changed for the worse for British capitalism. From a haughty dispenser of favours she has become a supplicant. Despite the favourable factors of coal and now oil resources, the capitalists, afflicted by the general crisis, have not taken advantage of the measures of the Labour government which restricted the share of the working class in the wealth they produce. The capitalists, fearful of a new slump, have not been prepared to invest in manufacturing when only 80 per cent of productive capacity can be used because of the restriction of the market by wage restraint and cuts in state expenditure.

The reformists have been endeavouring to increase the profits of the capitalists by cutting the share of the workers and to cure inflation by cutting budget deficits. But they are caught on the other horn of the dilemma of capitalism - without big profits the capitalists will not invest. The result has been that in 1976, despite the practical standstill in production, the volume of imports (excluding oil) rose by 8 per cent.

Manufacturing output in 1976 was 6 per cent below the level of the crisis year of 1974. This was the year of the 'confrontation' politics of Heath leading to the three-day week and an enormous loss in production. Last year, too, the output of the building industry fell by 17 per cent compared to that of 1973.

Personal income, according to official figures, fell by 0.5 per cent. 'Consumer spending' in 1977 fell a further 1.5 per cent in April to June 1977. This downturn depressed the market.

All the sacrifices and falling living standards, all the state cuts in the social wage have not moved the hard-faced and hard-fisted capitalists. They failed in their objective. The programme of counter-reforms has left British capitalism in an even worse state than formerly.

The crisis of capitalism has produced different wings among the politicians and among the economic witch-doctors. Some are willing to risk a further bout of inflation by increasing state expenditure to try and increase the markets. Others, the majority, are in favour of even more drastic cuts in state expenditure. All are for holding down the wages of workers.

The windfall of North Sea oil (only rendered economic by the quadrupled price of Middle East oil) will not solve the problems of British capitalism. If the price of oil on the world market were to drop in the next recession it would cut some of the advantages of British oil production. The oil is extracted at fifteen times the cost of extraction of the oil of the Arab states.

But even if the oil price remains steady, or continues to rise slowly, the main advantage will be to remove one element of instability in the British economy. It could result in a favourable balance of payments in world trade and increase the revenue of the state by some few per cent. But it will not change this fundamentally.

The Economist of 23 April 1977, points out:

"Britain's pessimists like Mr Wynne Godley of Cambridge believe that private industry is more likely to slide from recession to extinction - a slow death obscured by an oil-buoyant balance of payments; that the government is likely to float sterling too high too long on that buoyancy, eroding export profit margins and pushing Britain's share of less than exuberant world trade down even more sharply; and that a strong boost to the economy is needed to raise growth from Mr Healey's forecast 1.5 per cent for 1977-8 to 5 per cent a year, if Britain is not to emerge from its oil years with 3 million unemployed and a skeletal industrial base."

The reformists, like the bourgeois, would like a high growth rate, but are constrained by the inevitable increase in inflation that further deficit-financing would engender. That is why they have capitulated to the treasury 'experts', who really decide policy, and to the pressure of big business.

Thus the spokesmen of capital vacillate between the 'orthodox' monetarists and the neo-Keynesians. Both sets of 'remedies' are worse than the disease.

The Conservative Party

An inevitable future split in the Conservative Party between the right wing 'ultras' and the so-called 'moderates' is foreshadowed by the differences between Keith Joseph and the shadow Labour Minister, James Prior, over the Grunwick strike.

The right wing Bourbons, using the 'philosopher' Joseph as a front (though his views are of the blackest reaction) want an out-and-out struggle against the trade unions, bringing down the full force of the state and the 'law' against the organised workers. They represent one wing of the ruling class, which comprises those sections of big business who are financing the National Association For Freedom (NAFF) (1) - 'freedom not to belong to a union' ie the 'divine right' of employers to tyrannise and doubly exploit unorganised workers in getting them to meekly accept low wages, their 'right' to decide everything in the workshop and to destroy the 'closed shop' - the solid defence of the well organised workers.

This split in the ruling class party of big business - which will be patched up and papered over for the moment - is an indication of the beginning of a revolutionary crisis in Britain. It is only at moments of great social tension and stress that the ruling class openly reveals their differences in strategy and tactics. That is especially so in the case of the Tory Party in Britain.

This party has based itself not only on the interests of the capitalist class and landowners. It has also rested on the active support of the different layers of the middle class - especially its professional and upper layers - and on the passive support of an important minority of the politically backward workers - including even a third of the workers organised in the trade unions.

The support of these sections is due only to the bankruptcy of the policies of reformism. Labour governments have solidified and hardened the prejudices of these layers by their failure to carry out their promises and programme when in power. Without this Support the Tory Party would long ago have collapsed. The failure of the last Tory government with their policy of confrontation with the unions and the working class reduced them to a suburban and mainly South East England party.

The counter-reforms of the right wing Labour government have allowed the Tories to make an electoral recovery. The disillusionment with increased inflation, greater unemployment and lower living standards has meant a comeback.

But the background to this comeback is the sickness of British capitalism sketched in these perspectives. For a time the Tories tried to paint themselves as a second party of reform - Tweedledum to Labour's Tweedledee. In fact, after the deflationary policies of the 1964-70 Labour government, it seemed for a moment that the parties had changed roles. With the failure of the policies of the first two years of the Heath government, the Tories became a party of heavy state expenditure as against Labour's 'orthodox' financial policies of the last period of office.

In reality this merely reflected the desperate crisis of British capitalism and the frenzied policies of the representatives of big business to find a way out. Now, in place of the Labour government's policy of savage cuts and measures to reduce living standards, the Tories stand for a policy of even more draconian cuts in state expenditure and even deeper cuts in living standards.

On this theme the ravings of the former 'sober' journal - the voice of Toryism and of big business - The Times, is an indication of the cul-de-sac in which British capitalism finds itself. Some Tory MPs, reflecting the views and interests of 'the City', (ie finance-capital) even rationalise the bankruptcy of British capitalism. They seriously suggest the 'service' sector (ie insurance, banking, and investment abroad, tourism, catering etc) should replace manufacturing industry as the basis of British capitalism.

By the enormous investment of the surplus produced by the workers overseas and the services of the City, they wish to undertake a caricature of the role French capitalism played pre-World War One and partially between wars. But the world situation has changed. Upheavals abroad would be reflected in Britain.

This same wing of the Tories, like the rest, is also constantly raving about the need for more expenditure on arms and more arms. With a shrinking industrial base that would impose even greater burdens on the workers. This parasitic clique has long forgotten that the only real wealth is manufacturing wealth and that investing abroad, especially in the 'under-developed' world, is to give hostages to fortune.

Rather than the 3 million unemployed which Keith Joseph complacently contemplates, a shrinking industrial base would mean 5 or even 7 million unemployed with one third of the population redundant to requirements. Britain is a manufacturing nation or it is nothing.

But the threshing about of the Tories like a wounded ox (an appropriate analogy for the castrated capitalism they would see) is itself a symptom of the deep crisis of British capitalism. The switch from Keynesianism to 'monetarist' ravings is an empirical expression of the blind alley of world and British capitalism.

The ruling class tried to crush and tame and render impotent the organised working class, using the Conservative government as its instrument. In this first dress rehearsal they were defeated, without a real mobilisation of the working class by the trade union leaders, or even a clear explanation of the issues and what lay behind the battle. This was not even a real show-down because of the weakness of British capitalism's forces and the mighty potential and actual strength of the organised working class.

But the desperate situation of British capitalism forces the ruling class to try and undermine their moral enemy whom they regard with fury and hatred - the organised working class. If they come to power, driven forward by the pressures of their class needs, the Tories will try again to undermine, subvert and tame the unions.

The stark reactionism of Thatcher, Keith Joseph and Heseltine shows that this is an undercurrent within the Tory Party. The cannibalistic ravings against the closed shop, from the Secretary General of the Institute of Directors, Jan Hildreth, in The Director, shows the feelings of his class. He claims the support of the overwhelming majority of directors in industry and commerce.

They work empirically from day to day without thinking or really understanding the relation of forces and what tomorrow will bring. Yesterday they leaned heavily on the Labour government 'to do the dirty work', as Tory MPs explained in the lobby of Parliament and in the privacy of their clubs. No-one but a right wing Labour government could impose big cuts in standards of living and reduce the welfare state to a decrepit shadow of what it had been.

'The Moor having done his duty...' the ruling class is preparing to abandon him. When the labour and trade union leaders can no longer hold back the movement of the workers to regain what they have lost in living standards during the last three years, the capitalists will turn towards an open reactionary government either of the Tories or a National government.

In spite of the lessons of 1970-4 the representatives of capital are preparing to embark on a new conflict with the unions. Politics is not a question of rationality but the movement of class forces, dictated in the last analysis by class economic interests. The crisis of the system is such that they must attempt again a showdown with the unions.

This is a recipe for class conflict which dwarfs anything in British history. Gone is the boast about the British 'genius for compromise' which was the theme ad nauseam of the media in the whole of the post-war period. It is certainly true that British capitalism in the past could work on the principle of agreement and bargaining with the working class, owing to her privileged position, stemming from her industrial ascendancy and the centuries of pillage of the colonial and other peoples.

That was the historical basis of 'enlightened Toryism'. The fat years are now ended and an epoch of lean years begins. There is no room for compromise, except very temporarily, between the classes. Consequently Toryism will be forced more and more to reveal its real policy - the defence of the interests of big business.

If only the labour and trade union 'lefts' had one per cent of the determination and will of the strategists of capital, the social overturn would be smooth and peaceful. In addition, in a primitive way - a groping and empirical way - these strategists work on the basis of perspectives. The labour and trade union leaders, right and left, prepare nothing and foresee nothing; they act only when they get burned by the fire of events.

The Tories have been emboldened by the recovery of their support. But the support they have regained is from the disillusioned middle class, many traditional supporters of the Labour Party, typified by the now reactionary playwrights John Braine and John Osborne, and the journalist Paul Johnson. They reflect the frenzy of the middle class, faced with high taxes and declining living standards.

In addition sections of the lumpen-proletariat and the politically backward workers have swung back to the Tories. But the basic core of organised labour has remained faithful to its traditional organisations.

This means that an election victory either for the Tory Party under its own banner or under the disguise of a National government would be a Pyrrhic one. Their electoral recovery in the industrial areas of England and in some areas of Wales and Scotland will be very temporary. Even in the middle class suburbs they will lose ground as the crisis of capitalism in Britain and the world develops. Their complete incapacity to solve the problems of the workers or of the middle class will become clear to the masses.

In elections and 'on the knocker' the Tories conduct a campaign of demagogy and of lies to deceive the people. But the real programme of the dominant leadership of Thatcher, Heseltine and Joseph is the absolutely utopian one of a return to the untrammeled exploitative society of Victorian times which 'built Britain's greatness'. The idea of 'back to Adam Smith' or 'back to laissez faire' is an impotent dream of the long gone past.

The reality is the interest of the monopolies which dominate the British economy. The reality will also be the 3 million unemployed to be used as a whip against the employed and against the unions.

Any attempt to 'confront the unions' would soon be abandoned because of the conflict it will provoke and the impotence of parliamentary laws to make a decisive difference.

What is written with workers' organisation and mobilisation cannot be changed by lawyers' tricks. That is why The Times, reflecting the impotence of the ruling class, is ultimately threatening - in effect - physical confrontation with the workers. That is why supplies of CS gas, riot shields and other paraphernalia are already being stockpiled and why shields were used at Lewisham(2) as a test.

Before the 1970 election the manoeuvres of the Tories were similar. There was the Heathian 'Selsdon Man' and the bloodcurdling threats to 'deal with the unions' and 'cut them down to size'. The reality was different; the fantasies of reaction and their actions provoked a counter-attack by the organisations of the working class. The Tories were shattered by trade union resistance, which included the miners' strike.

Now an even more hopeless period is opening up. The projection of the production of 35 to 40 million tons of steel by 1985 has been abandoned and a minuscule target of 25 to 27 million tons set instead. The latter figure is only as high as that reached by British capitalism in 1973. This means a further deterioration in living standards, far lower than the last three years, and a continuation of the ruin and decay of Britain. Consequently the support for a Tory government would melt away faster even than in 1970-4.

But the ruling class prefers to rule through their direct instrument, the Tory Party, where possible, both in times of calm and in times of social turbulence. They concede to Labour governments only when they perceive there is no other way of 'disciplining' the workers at a time of crisis.

Now the large number of small strikes in every area - affecting engineering and other industries - indicates that the usefulness of the Labour government as a brake on the movement of the workers is very limited.

In a period of turmoil, under pressure, a Labour government would concede far more than a Conservative government. If possible the strategists of capital would, therefore, prefer a Tory or possibly a 'National government'.

If the next election is fought with the main parties intact and under their own banner, it seems likely that the Conservative Party will gain a majority, probably of 30 to 50 seats. The size of the majority will be small because of the image of Thatcher-Joseph-Heseltine, and because a decisive section of organised workers will rally round their party, the party of the trade unions. But this is just an estimate of the situation at the present time. It is always difficult to predict the result of elections. This is especially true in a period of volatility in class relations, with the sharp changes of opinion in the working class and especially the erratic swings of opinion in the middle class. An epoch of reformism is at an end. Reform and concessions can still be gained through pressure and struggle, but can only be temporary. At this time the bourgeoisie prefers to try and install a reliable government which will be prepared to serve its interests without looking over its shoulder at the union leaders and the Labour Party.

Big business ruled and got measures in their interests due to the acquiescence and acceptance of the trade union leaders and the Labour government during the last three years, although the interests of capital have always been decked up as the 'national interest'. The right wing trade union leaders, and sections of the left, through lack of alternative policies (which would have meant a policy for the overthrow of the rule of capital), persuaded the rank and file to accept lower wages and the whittling down of the welfare state. They leaned on the workers' loyalty and trust in their leaders and their organisations. The faith of the workers was put at the service of capital.

But the advanced workers have decided 'enough is enough'. They see such policies resulting only in an electoral weakening of the Labour government. They see the sacrifices as having been useless, the numbers of unemployed getting worse and inflation still continuing at a high rate. The ruling class too has decided that that particular 'ballgame' is over. They must look to different methods of rule, not the conveyor belt but rather more open 'confrontation' and bludgeoning of the workers.

In the inter-war period and particularly during the Tory government of 1951-64 there was a tacit acceptance by the right wing trade union leaders and by the right wing leaders of the Labour Party, of the 'divine right to rule' of the capitalists and their representatives, the Tory Party.

The Labour Party was a tame and 'loyal' opposition only suggesting meekly the amelioration of some of the worst sores of capitalism The trade union leaders were ensnared and entwined with the capitalist state; there had not been any national official strikes for decades. The unions were regarded almost as a department of the state machine.

But the developing crisis of decaying British capitalism resulted in the election of a Labour government in 1964. By 1967-8 already there were symptoms of the breakdown of this relationship by the pressures of the rank and file. Even under a Labour government there were official national strikes such as those of the seamen.

The strategists of capital evolved policies to put the unions in a straitjacket through enforced collaboration of the unions with the state in lowering living standards. This was the meaning of 'In Place of Strife', Labour's proposed anti-union bill which was smashed by the resistance of the unions and the rank and file of the Labour Party.

The attempt of capital, through the Labour leaders, to force this collaboration with the state was unsuccessful, however. The pressure of the workers, the move to radicalism and the active participation of the advanced layers led to a partial transformation of the unions. Left leaders more sensitive to the pressures of the rank and file were elected. They broke away from the embraces of the state machine.

In a sense the same process is taking place at the present time though the union leaders are terrified of the possible consequences. Cautiously the 'Social Contract' wage restraint policies have been repudiated at conferences and at the TUC, though the leadership has succeeded in formal votes reaffirming the rule that there should only be one wage claim every twelve months. Whether they can make this hold remains to be seen.

Protest against actual cuts in living standards has been muted. The trade union leaders have been terrified of the consequences of an avalanche of strikes and social conflict. In 1968 to 1970 they were prepared to show the way in defence of the workers' living standards. Paradoxically, the repetition of the same process has been muted by fear of a clash with the forces of the state, opening up incalculable consequences.

The secret discussions between the Tory Shadow Labour Minister, Prior, and leading members of the TUC (including former left wingers like Scanlon and Jones) were intended to find a way of compromising with the Tories if they come to power.

The TUC is trying to avoid a clash with the state similar to 1970-4, which had been provoked by the Industrial Relations Act. But the clash was not caused simply by the wish or the stupidity of the ruling class. It was caused by the frightful decay of British; capitalism. It was the expression of the irreconcilable clash of class interests in the division of 'the national cake'.

The TUC would like to return to the relationship they had with the Tories and the state of 1951-64. They are terrified of the implications of a renewed battle on the lines of 1970-4, not because the unions are weak but because they are stronger! Despite mass unemployment, more workers are organised than in the whole of British history - 11.5 million - more than half of the working population. A much higher proportion of the industrial working class is now organised than ever before in Britain.

Lenin conceived that it would be very difficult under capitalism for more than one-third of the workers to become organised in unions. Yet, in most of the industrialised world, the unions now comprise the majority of the working class. That is the expression of the immense power accumulated by the working class during the last three decades.

The TUC leaders and the 'sober and moderate' Tory representatives of capital (terrified by their own weakness as revealed in the events of 1970-4) may wish to come to an agreement. But such an agreement will be built on sand. The rabid bayings of the directors against the closed shop indicate the real attitude of capital.

On the other hand, the sweet cooings of Margaret Thatcher are a deception (her ideas are in reality those of Keith Joseph). She merely intends to paper over the cracks in the unity of the Tory Party before a general election. As a representative of capital she does not wish to rouse the trade union movement to mobilise the workers in advance. The serious strategists of capital wish to avoid a conflict. It is a different situation to that of 1926 or 1937-9. The ruling class prepared to provoke the General Strike on the one hand and confidently prepared in the latter period, for a bloody repression of the workers through civil war.

Now, because of social weakness, the ruling classes wish for some sort of modus vivendi with the trade union leaders, some sort of arrangement like that of 1951-64. The union leaders, fearful of the forces awakened and aroused in the mass movement of 1970-4, are only too willing to reciprocate and as Len Murray the General Secretary of the TUC said: 'Talk business with any government.'

But the decline of Britain, in the long term, makes this impossible. The social forces of workers and bosses cannot be reconciled. Conflict will open up, opening up in turn, not differences but great rifts in the Tory Party as to how to 'deal with the organised workers'. Nor can the trade union leaders hope to hold their members when they see further cuts in living standards while the rotten bourgeoisie is further pampered and cosseted with massive subsidies by the state.

The press, radio and TV - the entire mass media - have conducted a poisonous campaign of vilification and denigration for ten to fifteen years against the trade union movement. The difficulty for them has been that practically every section of organised workers in the different trade unions has been involved in battle and suffered from the lies, distortions and demagogy of the press since 1966.

In the meantime an element of control or, at least, checking of arbitrary sackings, has developed in the organised factories, workshops and even in organised offices and amongst white-collar workers. Solidarity action for fellow workers on strike has been developed in a whole series of disputes. This is the first heat-lightning of even bigger actions in the future.

Not seeing any mass alternative however, and regarding the Labour government as their 'own' government for a period of years, the rank and file of the trade union movement has accepted increased unemployment, inflation and cuts in living standards without mass protest.

The experience of the last three years has resulted in the accumulation of an enormous pent-up anger, resentment, frustration and bewilderment among the workers. The changed votes at union conferences, and the refusal of the TUC leaders openly to commit themselves to the 10 per cent limit on wage increases of the 'third phase' of wage restraint, was a reflection of this. The Tories might succeed in mobilising the middle class, former Liberal voters and sections of the politically backward workers in electoral terms, because of the counter-reforms and counter-revolutionary policy of the right wing government. But in terms of social forces, this will not be decisive.

The mood of the workers is changing. They will not tolerate from a Tory government, their class enemy, what they would accept - for a time - from 'their' government. The world economic situation, as well as the shaky national situation would undermine the position of the Tory Party from its very first days.

The social peace of 1951-64 cannot be repeated. The crisis of capitalism has reached a chronic phase which threatens to engulf the workers in poverty, want and penury. Consequently, the battle of the workers will be more bitter.

Marx once wrote that a whole series of titanic battles were necessary to educate the working class - a period of wars and class struggles. The period of the last 70 years has been such a period. If capitalism has only lost a third of the world - and that mainly in the peripheral, backward areas - that has been because of the role of Stalinism and reformism.

But in Britain the policy of 'enlightened' reforms is now at an end. The ruling class is caught in the toils of the contradictions of capitalism and its own incapacity to fulfil the mighty role that it played in the past, a role that was relatively progressive for a period.

It is not a question of 'rationality', as the pragmatists in the leadership of the Labour Party and trade unions have imagined in the past. It is the lack of resources on a capitalist basis which demand the 'irrational' holding down of the wages of the workers under a Labour government, cutting consumption and therefore the market. If that is so under a Labour government, caught in the toils and the contradictions of capitalism, how much more so under the Tories?

The capitalists, in the last resort, do not dictate policies. The policies are dictated to them by the crisis of their system, for which there is no way out - except possibly for a period, at the expense of the working class. Workers are in no mood to accept tamely more sacrifices and insecurity for the benefit of big business. This is because of the impossibility of reconciling this fundamental contradiction, which the reformist and Stalinist leaders can never understand. Class conflict is inevitable.

The clash of forces will decide. The crisis - the battle over the division of the surplus produced by the workers - will therefore be very basic. There is not room for much horse-trading and bargaining as there was during the period of super-profits. Consequently, despite the desires of the representatives of both antagonists - union leaders and Tory leaders - their relations will become even more stormy than under the Heath government of 1970-4. Under the pressure of their impotence in the face of mass action a further differentiation would take place in the Tory Party. A gulf would open up with the backwoodsmen right wingers impatient at the failure to come to grips with the trade unions and their leadership. The right wing would be financed by the most impatient and the most stupid and reactionary wing of big business. Fissures and even an open split would develop in the Conservative Party.

At present both sides, capitalists and the leaders of the trade unions, dread a general strike - the capitalists because of their weakness, the trade union leaders because of the massed strength of the forces behind them. Nevertheless, there looms the possibility of a general strike as the culminating point of a series of clashes in various industries - local, regional and national - possibly within one or two years of a Tory government coming to power.

If Mrs Thatcher is not prepared to support her mentor, Joseph, in the question of legislation outlawing the closed shop under the next Tory government, it is because such legislation has been shown to be useless and had the opposite effect on the organised workers. It was counter-productive and merely imbued the workers with contempt for capitalist law which was clearly operating in the interests of big business. It demonstrated to the working class the immense latent power of their organisations.

The events of 1970-4 taught the strategists of capital a painful lesson. It was not possible to act on the level of 1917-20 or 1926, dangerous as these actions were to the capitalists. Even then a threat was posed to the existence of capitalist society.

But they could secure the capitulation of the trade union leaders without much difficulty. They could win a victory in 1926, although at some cost, because the generals of the enemy like JH Thomas, the railwaymen's leader, were bent on capitulation from the first hour - indeed even before the strike started.

As the great Marxists, Lenin and Trotsky explained, an all-out general strike always poses the problem of power. It is a question of either/or. Under modern conditions, the problem would be even more starkly posed. With a Marxist leadership, the trade unions could assume power peacefully, as was possible in France in 1968.(3) With the weakness of Marxism within the labour movement and within the working class at the present time, however, the problem will not present itself in the same way in a possible future general strike. The results could be very different to those of 1926. Before the general strike Trotsky posed the possibility that it could push the labour and trade union leaders into power. With the present relationship of forces, a general strike could mean the collapse of a Tory government and its resignation. It could force a general election. Under such circumstances, with a roused working class, Labour would win. A left Labour government would be propelled into power with all the pressures that that would set into motion.

The question is only posed here because it is necessary for Marxists to understand and prepare for the possibility of events which seem remote at the present time. This is a period of sudden turns and breakneck changes more that at any other time in history. The events in France of 1968 are a warning that we must keep a sensitive finger on the pulse of the changing mood of the working class.

The possible collapse of a future Tory government would see the coming to power of a left Labour government. Because of the acceleration and deepening of the processes taking place within the working class and the absolute impossibility of solving the problems of the crisis of capitalism (except precariously for very short periods), such a government might be forced, under the pressure of an aroused movement of millions, to go much further than its leaders would think possible at the present time.

The events in Chile in 1973 however, constitute a warning of the lengths to which the ruling class will go in defence of their profits and privileges, if they are able. It was no accident that The Times and The Economist showed approval of the coup in their editorials. The major world industrial capitalist powers have re-adopted a democratic posture, including the hypocritical espousal of 'human rights', only because there is no viable alternative for the next period.

The example of Italy has highlighted their dilemma. They have almost stepped over the point of no return in preparing to organise a military police takeover and dictatorship. Fear of the consequences, not love of democracy, has stayed their hand - fear of a counter attack by the working class on the lines of the Spanish workers' reply to the Franco coup of July 1936. But this will not permanently hold them from taking action, given the organic crisis of capitalism.

The position of the British workers is much more powerful than their Italian brothers and sisters. Their organisations are potentially much stronger. They constitute the overwhelming majority of the population. It is this power which causes the strategists of capital, like The Times editorial writers, to gnash their teeth in impotent rage.

The ruling class would like to emasculate the power of the trade union and labour movement and turn it into a harmless eunuch, completely obedient to the whims and dictates of capital. But they cannot do this easily. It would require a surgical operation, ie civil war. Like the Italian ruling class, they are not at all certain of victory under such circumstances. They toyed with and swiftly rejected the idea of a military coup in 1974; they were faced with the revolt of the miners, backed by the labour and trade union organisations - at the bottom, and even to a large extent at the top. They had to drop the idea and were defeated in the subsequent general election.

For a whole historical period of years, stretching to possibly even a decade or more, British capitalism will stagger from crisis to crisis. The ruling class will swing desperately from one government to another.

There will be further radicalisation of the workers. Millions will be involved in political and trade union activity. The middle class will swing feverishly from one side to the other. The lumpen-proletariat will be stirred from its usual passivity into political action. They too will swing from one extreme to the opposite.

What we will have in Britain, given the deep organic crisis, is the Italianisation of British politics.

There may even be the lunatic terrorist activities of a home grown English variety of ultra-lefts. The fascists have already begun such activities from the right. Like a stagnant pond under the influence of social storms the scum rises to the surface first.

But however long such a period will last, because of the weakness of the subjective factor to take advantage of this, in the ultimate, it will have to end in a solution. The militarists will risk all and take to arms to crush the labour movement even if it means civil war. The social crisis of Britain will be protracted. It will end either in the greatest victory of the working class achieving power and the overthrow of the rule of capital, with the installation of workers' democracy, or a military police dictatorship which will destroy the labour movement and kill millions of advanced workers, shop stewards, ward secretaries, Labour youth, trade union branch secretaries, and even individual members of the labour movement. The workers have an ominous warning - the example of Chile.

These are long-term perspectives over the coming period of 10 to 15 years. Events in Britain will be affected by events on the Continent, such as developments in Spain, Italy and France.


The Liberals are a secondary party of big business in the eyes of the strategists of capital. Their function since the war was to prevent a complete and open polarisation of society between the Labour Party, as representatives of the workers, and the Tory Party, as the party of big business.

In periods of Tory government with economic difficulties and class conflict, the mass media, including the press, TV and radio, skilfully built up the Liberals. The calculation was to create a safety net to prevent disillusioned elements, particularly among the middle class and among politically backward workers, from swinging to a changing Labour Party - one which was no longer a bulwark of stability for the social system. Thus they would prevent the Labour Party from gaining an absolute majority of the votes.

It is true that they were helped in this by the timid and false policies of the Labour leaders. But leaving this aside, the ruling class have always been fearful of the effect on the workers of an absolute majority of votes for Labour, particularly if the only other party was the Tories.

In periods of Labour government the need for a safety net is not so pressing. The decisive section of big business, and their obedient tools in the media, wish for a swing to the Tories and a Tory majority. Thus the Liberals receive mainly bad publicity when they are given any prominence at all.

While desiring the continuation of the Liberal Party, for future use, the main goal of big business is a systematic smearing of the Labour Party, to the benefit of the Tories. Once right wing Labour has done sufficient to discredit the ideas of 'socialism' the way must be cleared for a strong reactionary Conservative government.

Consequently the ruling class does not worry too much if the support for the Liberals shrinks and they become a mere handful in Parliament. In any case, polarisation of the classes tends to take place under such conditions. The professional people and those sections of the middle class inclined to vote Liberal tend to swing over to the Tories. Trying to paint themselves as the 'middle way' between Labour and Tory, the Liberals are almost obliterated by the class poles of attraction.

The Liberals were 'converted' to proportional representation when their support had dwindled to a small minority of voters. They want that system because they hope to hold the balance, like the Free Democrats in Germany, between the two big parties.

Alarmed by the developing swing to the left of the workers in the trade unions and the Labour Party, the media started a campaign for proportional representation. This has been dropped - for the present - because of the opposition of the main group of Tory polititians led by Mrs Thatcher. They are afraid that they will not gain an absolute majority of votes at the next election. The possibility would exist then of an open Lib-Lab coalition, or more likely, as in 1924 and in 1929-31, a Labour government dependent on Liberal votes. This would be a more decisive version of the present situation.

In addition, the Tories with their utilitarian and empirical approach, thinking in fixed terms, see the Liberals as permanent arbiters deciding whether there will be Tory or Labour governments. (They see social processes very dimly and only through the spectacles of their class interest, as well as the narrow interest of their own political party and personal ambitions). They have scented the possibility of a Tory majority in the next elections. That determines their immediate policies on this question.

Of course, with a Marxist policy and leaders, the labour and trade union movement could gain a crushing majority of votes in the polls. Even without it, the intensification of the class struggles, which is inevitable in the next stage, will see millions actively involved and discussing politics.

A Tory government would mean further instability of class relations The formula of Thatcher-Joseph-Heseltine, giving further lavish concessions to big business and taking away concessions to the workers (even if the formula was diluted), would exacerbate relations between two classes. Consequently, mass action, demonstrations and strikes could then result in a sizeable majority of votes for Labour at the polls in the future.

The Liberals have been squeezed because the capitalists and their representatives the Tories are playing for safety and the 'assurance' of rule by the Tories gaining a victory at the next election.

The Liberal leaders have been the chief propagandists for a 'National government'. This would mean a much bigger contingent of Liberals in Parliament on the 'National ticket' - a 'government comprising all parties' ie Tory, Liberal and right wing Labour. The latter are not far removed from the Liberals in outlook anyway, as Prentice, Taverne, Mayhew and George Brown(4) have shown. There are others of the same ilk still in the Parliamentary Labour Party.

Ironically, by the dialectic of the class struggle, the polarisation of classes that this would involve would mean, over a period, not the enhancement of the role of the Liberals, but their massive destruction as a serious political force.

The Labour Government

Disillusionment among the advanced workers at the result of the policies of the Labour government is widespread. Among the backward workers there has been a revulsion against Labour politics.

The Social Contract was accepted grudgingly by the workers because they believed the pleas of the Labour leaders who argued that through the acceptance of sacrifices and lowered standards of living they would secure the end of inflation and mass unemployment. The promises of massive industrial revival through greatly increased investment which would lead to greater increases in living standards had their effect. In addition, the appeals for patriotism and the 'Give a year for Britain' slogan undoubtedly evoked a response.

But the main reason for this support was the lack of a viable mass alternative that the workers could see offering a way out. With the left trade union leaders committed to acceptance of government policies, with only faintly expressed criticism from the Tribunite MPs, the workers could see no practical way out.

Even most of those militant layers of the shop stewards' committees who were sceptical of the government's promises and the attitude of their own union leaders could not convince the rank and file on the shop floor that it was a practicable proposition to take on the combined weight of the employers, the government and their own union leaders at the same time. The mood of the workers was to accept and hope for better times in the short term future. After two years of falling living standards, increased unemployment (which shows no sign of abating) and with inflation still at a high level, the mood has begun to change.

A 10 per cent limit on wage increases (the official target) would not even allow compensation for the inflation of 17 per cent let alone taking into account the level of taxes which would reduce the increases for the higher levels of earning by at least 30 per cent to 50 per cent. The excuse used for increasing prices was 'extraneous influences', like devaluation. This is one of the main causes of the present inflation and represents a further cut in real wages as its effects work through the economy.

The myth of wage increases being responsible for price increases and for the rise in unemployment has largely been exploded in the minds of the big majority of workers. The attempts to maintain a third year of wage restraint, with the support of the union leaders, has met resistance and has been rejected by delegate conferences representing a majority of workers and even at the TUC itself.

However, the limit of 12 months between wage settlements was accepted by the TUC conference. There is enormous pressure on the individual union leaders to make it stick. Reluctantly, large sections of workers have accepted it. But it just requires one important union to break through for it to collapse. Even if there were a national strike on the issue by one union the psychological barriers would be broken.

To maintain the 10 per cent limit on wage increases will be virtually impossible. The hyena press would once again be perfidiously howling that wage increases cause inflation.

The slight fall in the inflation rate from 17 per cent to 16.5 per cent announced in September 1977 (on the July figures) has been caused by the difficulties of the world market and the fall in the price of raw materials and foodstuffs imported from abroad. This trend may continue if the decline in the rate of increase of world capitalist industry continues and the capitalist world moves into recession and slump.

But as in 1974-5 that will not mean a fall in prices, merely a fall in the rate of increase in prices and much bigger unemployment. Under present day capitalism the workers are trapped between the devil of high inflation and the deep sea of recession, suffering both at once in what has been termed 'recession-flation' or 'slumpflation'.

After all the sacrifices, Britain will simply have moved from slump to slump. The media, after the TUC conference, changed tactics. They had been careful, slanting the news to undermine the Labour government and even attacking the Prime Minister, who ceased to be 'Sunny Jim' Callaghan and became a 'shifty politician' not to be trusted. Now they changed to present the situation of 'the country' as rosy - a balance of payments surplus, inflation overcome, share prices booming, good prospects for industry - 'Britain' is ready to leap ahead again. The reason for this is that the organised workers want to regain the standards of living lost over the last three years. They are thoroughly angered by the results of enforced wage restraint.

The ruling class is still hoping that the 12 month rule can be maintained and that they can limit wage increases by the fear of renewed inflation. Hence the propaganda that there will be a 'solution' of British capitalism's problems in the coming period. They gloss over and hide the fact that the increase in investment is miniscule and that there is an actual fall in production.

The ruling class have - temporarily - reversed their attitude to the Labour government in the faint hope that it can still 'deliver the goods', through the aid of the trade union leaders, and at least partially maintain wage restraint. The City and the industrialists must hardly believe their luck in succeeding to cut standards of living by the biggest amount in over 40 years - and this without any mass upheaval.

One reason why the Labour government maintained itself in power for a much longer period than the Marxists anticipated was because the ruling class had no immediate alternative. As long as the government was increasing their profits and succeeding in holding back the workers, why risk a change and stir up the opposition of the organised workers?

The acceptance by the workers of the measures of the Labour government (because the organised workers saw no other way out) had, as a further consequence, created the political and industrial 'lull' which lasted for about 12 months. It was not only a period of lull but even of mild reaction. The right wing in the trade unions and the Labour Party had a temporary resurgence. Amongst the advanced workers there was a feeling of frustration and dismay, in many cases verging on demoralisation.

A mood of pessimism and confusion swept the advanced trade unionists and active Labour Party workers. This mood, and the apathy and inertia of the mass, yet further emboldened the worst reactionary elements in the factories, even to the extent of the more demoralised elements supporting, half-surreptitiously, the National Front.

One main reason for this development was the lack of understanding on the part of the advanced layers of shop stewards and active workers in the trade unions and labour movement of perspectives and theory - ie the fundamental ideas of Marxism. Historically of course, this is understandable, given the policies of the left reformist trade union and labour leaders and the degeneration of the Communist Party leadership.

What it meant was that, in the eyes of the masses, the workshop union representatives and the leading elements in the Party branches had no explanation and no answer to the problems of inflation and unemployment.

In fact many millions even half accepted the propaganda of the Labour and TUC leaders. Most were bewildered and confused. This reacted on the mass of more inert and politically indifferent trade unionists on the shop floor - even on those closest to the rank and file workers, the shop stewards. It was a case of one factor reacting on the other and back again.

Many of the most militant shop stewards, councillors and Labour Party activists, failing to understand the temporary mood of the workers, and instinctively recognising that they were being duped, succumbed to moods of despair themselves. The mood of the ranks infected the attitude of their leaders. This in turn was relayed back further reinforcing the mild reaction.

Even within the most revolutionary periods there will be interludes of reaction, despair, frustration, indifference and apathy. There will be irrational actions and reactionary attitudes by broad sections of the working class. Even advanced layers, not understanding the reasons for this, can lapse into reactionary moods of despising and blaming the workers for their apparent quiescence or particular mood, regarding themselves as separate and apart from the workers. In a sense that is the basis for Stalinism and reformism among some layers of the advanced workers.

Experience will teach the workers en masse as they move into activity, which will be forced on them by the struggle against unemployment, for shorter hours, better conditions etc, in defence of living standards and for their improvement. They will come up against the granite barrier of the world crisis of capitalism. More and more broad sections will begin to understand that capitalism is responsible for their daily problems and anxieties.

The real difficulty has been that the most active and advanced workers in the trade union and labour movement, though feeling this themselves, have not been able to convey it to the working class as a whole, even to the rank and file workers in the factories where they work. This problem arises from the mix-education of militants by the Communist Party and from the narrow, merely trade union 'education' of shop stewards by the unions themselves.

The lull, in terms of the passivity of the workers, is now at an end. There have been no big defeats of the working class during the last three years.

In a sense the workers have been resting after the Herculean struggles of 1970-4. They have waited on events, hoping for some miraculous changes from the Labour government which they brought to power.

Disappointed in their hopes, they have begun to turn to the industrial struggle. Far more than in 1968-70 there has been an epidemic of small strikes in most important industries and in practically every sizeable town in every region.

The media has deliberately refrained from giving publicity to these strikes, as they have covered up reports of strikes in other countries. They are afraid that, with the present mood, the contagion may spread.

Only strikes such as the bakers', or ones involving tens of thousands of workers in lay-offs or actions like the strike in the car industry, have been given any real publicity. The small strikes taking place are on a whole host of different issues - victimisation, conditions, bonuses, holidays, sick pay, pensions and wages among many others.

An important development is the large number of small factories and workshops, previously unorganised or with small union membership, fighting against sweatshop conditions and for union organisation and recognition. Contrary to what the sectarians would have us believe, this indicates the enormously attractive power of the organised trade union and labour movenent, inherited from the past.

It is no longer possible for the employers to concede a comfortable and bearable standard of living - that is why Callaghan and Healey have openly warned against attempts to regain lost living standards, because British capitalism cannot afford this. It will be impossible for any length of time for trade union leaders to hold back their members. Pressure of the members, particularly the active layers, will force them to change attitudes as is the case with the miners, the railwaymen and, partly, the TGWU leaders. With a conflict of interests of massive proportions, the employers in the strong sectors of engineering who employ large numbers of workers - on the docks, in the car industry etc, will have to concede increases higher than 10 per cent or face bitter strikes.

If the union leaders will not lead official national strikes, over a period there will be a rash of unofficial strikes in many areas. Learning that isolated action would not be sufficient, there would then be the tendency to link up through the shop stewards on a national scale to take joint action.

Such mounting pressure is more likely to have the result that union leaders would act on a national scale; national strikes would be on the order of the day. The struggles already involve skilled and unskilled, white collar as well as industrial workers. Some of the mass production industries, like Leyland and Fords, have seen big, unofficial strikes and demonstrations.

What happened after similar periods of 'restraint' (ie after disguised cuts in real wages) will be repeated on a higher scale, this time not during a period of Tory government, but of Labour government. The Labour government can maintain itself in power over the next months, and possibly into the New Year, so long as it can maintain even a partial incomes policy.

From the viewpoint of the capitalists this is 'the best government we have got' while it acts so favourably. It is not accidental that, for the first time in history, the possibility of the coming to power of a Tory government resulted in a fall in shares on the Stock Exchange. £1400 million was wiped out in 24 hours in March of this year (1977), when the vote of no confidence in the Labour government was being moved.

That expressed a lack of confidence that the Thatcher leadership could prevent a titanic confrontation between the classes. For the same reason, after the TUC's reassurance on the 12 month rule, shares rose recently.

The inevitable exasperation of the working class, expressing itself in mass action, will result in pressure on the government, the TUC, the left Labour MPs and the union leaders. This will be particularly so in the industrial unions like the TGWU, the AUEW and even the GMWU.

Under such conditions, with a further fall in production, any small reflationary measures from Healey, like the suggested £1000 million or even £2000 million, will evaporate like a drop of water on a hot stove.

Mounting unemployment of up to 2 million this winter will get the government into serious difficulties. There will be irresistible pressure for further action to be taken, though it goes against the wishes of the TUC leaders who want to do nothing but wait for a better situation next year.

The recession which is developing on a world scale may be temporarily halted by panic measures on the part of the powerful states of capitalism - West Germany, Japan and the United States - and following them, the others. But marginal measures of deficit spending etc, will be merely cosmetic without affecting the situation fundamentally. If they are not then successful, the decline in world trade of the last few months will increase even further. That will have a catastrophic effect on all the major capitalist countries, particularly the weaker ones like Britain.

The big employers have had a profits binge during the last few years of wage restraint. If the TUC and the union leaders can succeed in compromising and preventing big strikes in such industries as engineering and mining, there is still the possibility of the minority Labour government staggering on well into next year.

The strategists of capital are still hoping that they can manoeuvre the trade union and labour leaders to restore right wing control of the Labour Party, by new reforms which would re-institute control by the right-wing over the NEC and the constituencies. This would give them the old game of Peter and Paul once again. They build their hopes on such fantasies.

The objective situation which is developing however - the collisions between the classes - would make this a repulsive anachronism. The eggs have been broken, and cannot be put back in the shell again. Any attempt on these lines would provoke a violent reaction from the rank and file of the trade unions and the Labour Party.

Such schemes are hatched in the editorial offices of The Times and the Tory clubs where the right wing Labour leaders and some right wing trade union leaders are quite at home, completely remote from the rank and file of the wards and union branches. The right wing of the Labour Party still fantasises that it can restore complete and untrammelled domination of the Labour Party and the trade unions as in the 'fifties' and early 'sixties'. They delude their cronies in big business that this is still possible.

The serious elements like Roy Jenkins(5) have accepted the impossibility of regaining complete control of the Labour Party or of organising an intermediate 'social democratic' (in reality pseudo-Liberal) Party through agreement, fusion or alliance with the Liberals. He has departed to the lush pastures of the EEC Comission. Brian Walden has followed to a highly paid job in TV. Dick Taverne, Christopher Mayhew, Woodrow Wyatt and Reg Prentice, being more obtuse, have tried the 'middle way' and will sink into obscurity. The parlous plight of the Liberals at the present time is sufficient testimony to this dead-end.

If there were a new 'golden age' of capitalism internationally and nationally - a new period of capitalist expansion - then a middle way would be a viable proposition. The ruling class could make some concessions to the workers giving them some crumbs from a greatly increased cake. But that is not the perspective. More and more right wing ideas will seem as if they come from an antediluvian past. The right wing MPs are Neanderthal fossils.

The strategists of capital have inconsistent and contradictory aims. On the one hand they try to paint a picture of Callaghan and Healey having 'solved' the problems of the economy, in order to reconcile the workers with the 12 month rule, salvaging as much of the Social Contract incomes policy as possible. On the other hand they wish to rub the noses of the masses in the mess, to convince them of the errors and consequences of 'socialism'.

The strategists of capital will switch to an out and out reactionary government, more right wing than the Tories have been for generations, with its leaders even more reactionary than Baldwin in the 1920s. But before they do that, they will try and demoralise the working class by further attacks on living standards, discrediting the union leaders by making them accomplices of the Labour government in these measures.

Nineteen seventy-eight will be the fourth year of the Labour government. This is the usual 'normal term' of a government in Britain. Dialectically, one of the reasons for the lasting in office of what is now a minority Labour government, is the extreme enfeeblement of British capitalism. The government is delaying an election like Mr Micawber in Dickens' novel, David Copperfield - in the hope that 'something will turn up'.

But the realities of the world market, the grim fall in industrial production, in the output of real wealth, a possible increase in the number of unemployed to close to 2 million during the winter all makes the outlook for what might 'turn up' quite grim.

The figures of profits and stock exchange shares, the balance of payments figures, a small fall in inflation, cannot provoke more than a passing euphoria, despite the propaganda of the media. The workers will contrast them with the continuing fall in their real wages, the lack of spending money for a few 'extras', and the stark poverty of the lower paid just above or, in many cases, below social security levels. This will alienate them even more. The flaunting of the frivolous waste of resources by the rich, while many more youngsters are plunged into the insecurity and despair of life on the dole will further anger the workers. More redundancies and more insecurity, the lack of real investment in manufacturing industry will infuriate the workers as the facts percolate through to them

The expectation of Denis Healey or, in reality, the Treasury officials, of an increase in world trade giving succour to the British economy was a gambler's throw against all the odds. World trade is already beginning to fall and that will create new difficulties for British capitalism.

The Labour Party

It now seems unlikely that the Labour Party can win an election next year.

Organisationally the Party has suffered a further decline. As its 1977 conference report shows, the membership of the wards and constituencies has declined. In many areas the wards and General Management Committees (GMCs) are composed largely of old people. Many wards and GMCs have shrunk to a handful of Neanderthal councillors, with a small clique of supporters.

The right wing policies of the Labour government are hardly a means of stimulating the active rank and file with enthusiasm. Nor are they calculated to induce active trade union workers and shop stewards to join. Most of those who join, at present, are more likely to do so to oppose the present policies of the government.

This steady decline in the active membership has extended over more than a quarter of a century with many minor ups and downs. But the decline in the passive dues-paying membership has been even more marked.

Despite this there has been an even greater decline in the power and influence of the Neanderthal MPs and councillors. They retain a semblance of influence only in the worst rotten boroughs, wards and GMCs that have a 'dead' membership and a virtually complete lack of outside activity. These are almost the only parties where the right wing has succeeded in maintaining their influence.

Even there, the influx of some active people, in many cases putting forward some sort of alternative policies, can rapidly change the position. That is an anticipation and a harbinger of the coming processes of change.

The experiences of the Labour government of 1964-70 and of the present Labour government are preparing explosive changes of consciousness of the active workers in the Labour Party and trade unions.

Also, within the broad masses - usually apathetic or even luke-warm, politically - changes of consciousness are forcing themselves to the surface under the whip of necessity. As in the past, there remains a core of organised workers supporting the Labour movement.

As events develop, particularly with a reactionary government with Labour in opposition and the trade unions and the Labour Party swinging to the left, new layers will become active. They will turn inevitably to the mass trade unions and to their political expression, the Labour Party.

What the sectarians on a world and national scale are incapable of understanding is the practically inexhaustible reservoir of support retained by the traditional organisations of the working class, especially the Labour Party in Britain.

Millions of workers, not awakened to active political life, are being shaken up by the results of capitalism's inability to maintain employment or to give reasonable conditions of existence. They will turn to the trade unions first and then, drawing political conclusions, will swing to the Labour Party.

With the convulsions that capitalism is suffering, a Thatcher-led Tory government would provoke countless thousands of workers to mobilise against them. It was in this sense that Marx spoke of the revolution sometimes needing the whip of the counter-revolution. Of course Toryism is not counter-revolution as such, but it will be a government of counter-reforms in relation to the living standards and the social wage and one of capitalist attack. It will correspondingly rouse the active workers into opposition.

This will be because of an enormous wave of criticism in the Labour Party and the trade unions as a consequence of a new defeat for Labour, following the counter-reformist policies taken by the Callaghan government. The Labour Party, under a left, Tribunite leadership, will move further towards radical policies than at any time in its history. The groundswell of criticism will have this effect. In addition, the influence of Marxism in the Labour Party will be increased. It has already under difficult conditions, had a perceptible effect in raising the level of consciousness wherever Marxist ideas have been influential.

There will be an enormous ferment of ideas among the workers, and hundreds of thousands will become active, as the crisis deepens and the battle between the classes develops. The clear ideas of Marxism must be expounded with a patient, friendly approach. The platform of Marxism will gain a greater support as events demonstrate its correctness. The ideas of Marx, Engels, Lenin and Trotsky will become a powerful influence throughout the labour movement.

Nevertheless, initially the ideas of the left Tribunite MPs and the left leaders will become the dominant ones in the movement - both in the trade unions and the Labour Party. In the decisive areas they will become almost completely dominant and practically take control of the organisation of the Labour Party and the unions.

In a sense they would constitute the labour movement. Processes that have been accumulating for more than a decade would have meant a quantitative leading to a qualitative change.

The Youth

Mass unemployment will now be a permanent feature of capitalism throughout the now shortened trade cycle, both under 'boom' and 'slump' conditions. It bears particularly harshly upon the youth and upon women workers.

More than half the unemployed are aged 25 or under. Hundreds of thousands are going straight onto the dole from university, colleges and schools. A great part of the unemployed youth are black, without hope of a job.

The youth on the dole will be looking for an explanation of their misfortune and a solution to their problems. Hatred of the capitalist system will grow. Tens of thousands could be won to the programme of Marxism. Even more important are the new layers of youth entering employment in industry, the factories and also the offices. They too will be looking for a political lead. Tens and even hundreds of thousands of young people in the schools and universities are worried about their future.

New moods begin to affect the youth even before they affect the working class as a whole, and before it moves into action. In that sense they are like the students - a barometer of moods in society as a whole.

In particular, the middle class fluctuates and moves in a very violent and volatile way in periods of social crisis. Electorally, for example, sections of the middle class in Britain have swung 180 degrees to the Tories after swinging completely against them in 1974.

The middle class, and particularly students, do not have a stable social basis in society as do the bourgeoisie and the proletariat. They are squeezed between the mighty antagonists in class society and swing between the opposite class poles.

In the rarified atmosphere of the universities all sorts of sects can get a hearing. The students they influence usually drop out of politics soon after leaving the isolated cloisters of the universities, when the huge gap between the ideas they have accepted and the reality of life become apparent.

But many layers of worthwhile students, school students and, in particular, students in the colleges of further education from working class origin, can be won to the standpoint and ideology of the working class.

Throughout history, in all countries, the youth have been the backbone of the revolutionary movement in its early stages of development. This is just as true in relation to the movement in Britain. When convinced of ideas, young people will apply enormous energy, enthusiasm and sacrifice for the cause.

The Communist Party

After 50 years of existence the Communist Party of Britain (CP) is once again in crisis. Lacking the advantage of the mass membership and support that the Communist Parties of Italy and France have, it finds itself in difficulties, similar to those being experienced by the small Communist Parties of Western Europe.

Where the masses can discern no fundamental difference between a mass party and a very much smaller one, they will tend to support the bigger one. That is a social law of politics.

In the past the association with the October revolution was a powerful magnet and a source of strength for the Communist Party in Britain. That has changed into its opposite. The abandonment of 'Marxist-Leninist' pretences by the leadership has reinforced this process. There is not room for two mass reformist parties in Britain; therefore the reformist degeneration of the British CP has contributed massively to the decline of its organisation.

They have the worst of both worlds. They have the odium of totalitarian policies linked to Moscow and have lost the dynamism of the past and the revolutionary policies that constitute the real attraction for the militant minority. As a consequence there has been a staggering decline in the mass support of the CP.

At elections, under conditions of mass upsurge, their vote has fallen below that of nearly half a century ago. In this parliament they have not dared to put a single candidate forward in by-elections because they probably would have obtained an even more derisory vote than the sects.

At a time of disillusionment with the policies of the Labour government, a genuine revolutionary Communist Party might have made at least limited gains in mass support and big gains in the support of the active conscious layer of workers seeking an alternative to the counter-reformist policies of the Labour government But far from this, they have declined in support not only among the masses, but among the trade union and Labour Party activists.

Only among the students, ironically the former stamping ground of the ultra-left sects, has the Communist Party made any sizeable gains. Even in Scotland they have declined, where for a period they seemed to be holding their ground in the traditionally red areas of Clydeside and other industrial areas. Their appeal to youth - the key in the long term - is negligible. It was not for nothing that Lenin declared that 'he who has the youth has the future'. The Young Communist League is an organisation of a few hundred mainly 'paper members'. Without education, without real cadres, with its leaders as much soaked in the cynicism and contempt for the working class as their elders, this organisation has no future as a mass organisation. It is largely a fictitious organisation propped up by the CP in a desperate attempt to build a counter-weight to the Labour youth who have rejected Stalinism.

Among the unions, however - particularly the key ones of the miners, TGWU, AUEW and other industrial workers' unions - they have retained powerful positions inherited from the past. They also have strategic and influential positions in some engineering factories among the shop stewards.

The organic scepticism and lack of perspectives of members of the CP is reflected in its degeneration in many areas into an old peoples' club. It has no attraction for people looking for a revolutionary way out of their problems. Harold Wilson's sneer at the lack of social danger to capitalism from the palsied and sclerotic Communist Party is not very wide of the mark.

The Stalinists retain all the worst vices of bureaucratic centralism inherited from the past. The have lost the former revolutionary faith of their predecessors. At least the old leadership such as Gallacher, Pollitt and Campbell, had some real connection with the revolutionary movements of the workers in the past. The new leaders reek of middle class respectability. The degeneration of the CP into largely a petit-bourgeois sect - in outlook and now, to some extent in membership - is faithfully reflected in the leadership.

The CP leadership has never intended to institute a real Marxist criticism of the way the Moscow bureaucracy grew up and carried through a political counter-revolution against the state set up by Lenin and Trotsky, or of the fact that, while state ownership and a plan remain without workers' democracy and control, the state will continue to be used for the purpose of defending and increasing the power, privileges, incomes and prestige of the bureaucratic caste who control the USSR. They will not explain that Russia remains a grotesque caricature of the ideal of Marx, Lenin and Trotsky and that it is a monstrously deformed, bureaucratic Bonapartist workers' state.

While they assert their 'independence' from Moscow in their own mild way, the CP leadership has become dependent on another pole of attraction - the pole of reformism which, in the last analysis, reflects the pressures of the interests of capitalism in a class society.

The reason for the muffled discontent of industrial workers in the Communist Party with the policies of their leaders, is that they have become indistinguishable from the policies of the left union leaders and the left Tribunite MPs. They wish to ingratiate themselves with 'respectable society' by showing that they are as 'realistic' and 'down to earth' as the reformists. This arises from an underlying contempt for the workers and a disbelief in revolutionary perspectives.

The modern leaders of the CP have never really studied the works of the great teachers of Marxism, as a fundamental guide to action, strategy and tactics. They have busied themselves with little horse-deals and manoeuvres with the ruling class parties and the reformists. They have miseducated their members for decades. This has taken its toll on them.

The CP can out-match the reformist leaders in every way as far as 'putting it across on their own members' is concerned, but now the chickens are coming home to roost. If their policy is hardly distinguishable from that of the left reformists, why should the mass of workers support them, especially since, in spite of cautious and careful efforts at presenting themselves as 'independent', their party is tarred with the same brush as 'totalitarian Russia'.

The lack of a decisive break with Moscow on Marxist lines condemns the 'liberal' wing of the Communist Party to sterility. Their organic contempt for theory as a guide (not as some abstract mysticism) condemns them to oscillate between left-reformism in their own country and muted criticisms of Russian Stalinism and a break with their own past and with Stalinism in Russia.

They have edged away from nationalist Russian Stalinism, not back to the internationalism of Lenin but to a vulgar petit-bourgeois nationalism. If they have not yet reached the depth of reformism reached by the Spanish and Italian Communist Parties, it is because of their own weakness.

The active sections of the official CP, in the leadership as well as in many branches, are now dominated by trendy middle class types. The students and professional people tend to elbow out the workers and to set the tone in the attitudes of the Communist Party. Like the sects they take up as major issues all sorts of incidental by-products of the class system.

The CP remains a sect. If somewhat smaller than it was, it is still by far the biggest of the sects.


The decay of capitalism brings in its train misery and want for large sections of the population. To the working and middle class it brings anxieties, worries, unemployment and privation for many. The inner areas of the big cities have been left to decay and rot, as has happened in the strongest capitalist country in the world, the United States.

All the utopias of the reformists, left and right, of unemployment being a thing of the past, of an enlightened state looking after the unfortunate victims of a competitive society, of cities booming, are now shown up for what they are - mere fictions. The Macmillanite and Churchillite Tories also disseminated the illusion of a 'never had it so good' society. Now a Labour government presides over a real slashing of living standards. So far this year (1977), according to official figures (which are dolled up with averages), earnings including overtime etc, have risen by 8.8 per cent while prices (to September) have risen by 17.8 per cent, which is more than double the rise in earnings not allowing for taxation.

The social wage has also been slashed. Health, housing, transport and social services have been cut to the bone, while in many cities some Labour, as well as Tory councillors, have grown fat on graft and corruption. In decaying inner city areas, vandalism among the youth is rife. Football hooliganism is a symptom of despair amongst the youth who vent their frustrations by emotional involvement with a certain team.

Petty crime among black and white youth has leaped to unheard of figures. Youth without jobs and without amenities are searching for answers to their problems.

For a period, the trade unions supplied no answer because of the Social Contract.

The black population has tended to be concentrated in the worst areas of housing and congestion in the slums of the big cities. They came at a time of great opportunities for employment etc. Now these are past and there is competition for even the most menial of jobs.

Many youth, adults and old people are not at work, where they would become subject to the disciplines of a job and come under pressure to adopt a trade union outlook involving solidarity and organisation.

The poorer strata of the population are now virtual paupers, worse off than pre-war. Labour councils, in power for decades have merely uprooted many communities and replaced them with the abomination of high rise flats. The Labour government seems to have forgotten them. All these factors, and many more have resulted in the demoralisation of some of the lower strata of the population.

The middle class too has received short shrift from both Labour and Tory governments. That is why in Scotland and to a certain extent in Wales also there has been a resurgence of long dead nationalism. Scotland and the Strathclyde area in particular have the worst slums in Europe. This is the climate of despair in which small shopkeepers, professional people, small businessmen and farmers react against the remote and 'uncaring' English bureaucrats and officials in London, pulling behind them also politically backward layers of white collar workers and even industrial workers.

There have been Labour governments in Britain for 16 years, but in every direction people can see only a worsening of the situation. Nationalism was the penalty the labour movement paid for the policies of reformism which have collapsed in ruins.

In England, for similar reasons though on a smaller scale there has been resurgence of reaction. Rising prices, lack of jobs, no solution to the housing problems - the whole gangrenous sickness of capitalism in decay leads to frustration and anger. For the moment the middle class have swung back to the Tories.

Many prejudices among the backward layers of the working class have been inherited from the imperialist past. Many of the old people have been shaken by the influx of 'aliens' or black 'foreigners' into their areas. There is an acute shortage of any sort of accommodation. Unemployment affects the inner areas of the big cities nearly as much as the 'depressed regions' of the North East, Wales, Scotland and Merseyside. There all the problems of capitalism come together in an acute and aggravated form.

There is frustration too at the apparent passivity and acceptance of cuts in living standards by the labour and trade union movement, at the failures of the 'socialism' of the Labour government and the incapacity and feebleness of the Communist Party.

The large scale immigration of an earlier period was used in the poisonous slanting of news in the mass media, planting the idea that immigrants were taking jobs and housing from the native population, or were living in luxury on social security payments etc.

All this had its effect on the backward layers of the population. The black immigrant population was an ideal target as a scapegoat. It is in this atmosphere that various virulent groups have sprung up.

As we predicted, the 'high-falutin' fascist reaction of Mosley was a non-starter. He based himself on the grandiose dream of being the 'leader of one European nation' (impossible to create because of the discordant imperialist-capitalist antagonisms) with the whole of Africa turned into a slave satellite.

Mosley ingloriously faded away. Fascism requires not a world utopia but a reactionary nationalist standpoint, appealing to the prejudices of the backward layers of the population.

The National Front, stemming partly from the defunct 'League of Empire Loyalists', bases itself on the gut prejudices of the criminal lumpen proletariat that infest the inner areas of big cities like London and Birmingham.

Since the split with Kingsley Reed forming the National Party, it has taken on many of the attributes of the open fascist and nazi groupings from which its main leaders, John Tyndall and Martin Webster came. This association with fascism will, in the long run, be the kiss of death for the Front.

The lurid campaigns in the press about the tens of thousands of Ugandan Asians descending after their expulsion by Amin,(6) came as a tonic to the National Front at a time when they were in the doldrums. The stoking up of prejudice by the press prevented the disintegration of the Front at that time.

But it is significant that most of their gains have come from the demoralised lumpen section of the population in the inner areas of some of the big towns and cities. These are areas of high concentration of immigrant populations.

In the East End of London, they have gained support in the former areas where Mosley was strong - in some parts of Hackney, Shoreditch, Limehouse and Bethnal Green.

The same types of hawkers, small businessmen and small shopkeepers looking for some explanation for their difficulties have fallen for the poison of racialism expressed in an even viler form since the split: Webster and Tyndall have adopted the Nazi and Ku Klux Klan definition of an Indian and a Negro as anyone with a single grandparent of this origin. All are to be forcibly deported without exception! This repugnant racialism delights the criminal lumpens who compensate themselves for their lowly position by regarding themselves as belonging to a 'superior' race. These are the overtones of open nazism - not disguised but open racialism.

There is a sprinkling of middle class elements and even some politically backward workers within their ranks. But from the point of view of a would-be fascist organisation, the tactics of the Front have been suicidal for the long-term.

They have attempted to get a basis among the working class, trying to penetrate areas and constituencies where the Labour Party and the labour movement are strongest. This will be a fatal turn for the Front because a fascist movement must gain its main support from the middle class. With such a basis it can then draw behind it certain crazed sections of embittered and backward workers.

Fascism by its very nature must draw its main forces from the 'frenzied petit-bourgeois, ruined by capitalism'. This is only possible where the labour movement is paralysed by its leaders, and fails to show an alternative to the people as a whole.

In any event the situation has changed completely since the pre-war years. The ruling class has learned a sharp lesson in the dangers of losing political control and handing over the reins of the state to mad demagogues such as Hitler and Mussolini. They are not predisposed to cede power to their slavish and lunatic imitators in Britain or any other country for that matter.

In countries where there has been a counter-revolution in the post-war period such as Greece and Chile it is the army and police apparatus which has been used to establish a military-police Bonapartist dictatorship. It is true that these have acted in the same way as the fascists, using them as a model in order to establish a totalitarian state. They have attempted the complete destruction of the organisations of the working class and all the democratic rights which go with them. But they have been far weaker and without a mass basis. The Greek Colonels' regime(7) collapsed after seven years - a relatively short period. Probably the Chilean regime will not last much longer, despite ferocious repression.

The Chilean ruling class used the fascist 'Fatherland and Freedom' party as an auxiliary to the generals. Their role was one of provocations, bombings, assassinations and the creation of chaos in the country. They could never hope to take power on their own. They have played no significant or any independent role since the assumption of power by the Generals' junta.

In Italy the neo-fascists have tried to play the same role. They did not dare to aspire to seize power for themselves. The working class, through its organisations - trade unions and workers' parties - was too strong for them to be able to do so.

They have played the role of jackal to the military, trying to provoke the army to take power by creating an atmosphere of lawlessness and chaos with bombings and assassinations. They have attacked trade unions and workers' political demonstrations and headquarters with bombs, blown up banks and business premises etc, all to give the impression of an anarchic breakdown of society.

All these activities over a period of years (over a decade or so) were carried out in collusion with the Christian Democratic Ministers of Interior and Justice, and with the heads of police, Military Intelligence and the Special Branch.

The neo-fascists were merely an auxiliary of the state to carry out the dirty work for capitalism in a society undergoing crisis.

This is entirely different to the position with Mussolini and his fascists. He burned, assassinated and butchered his way to gain support for fascism from among the petit-bourgeois and prepare his own coup with a mass force behind him. This was also the position with Hitler. The forces of the state were placed at his disposal once he had won the big majority of the maddened middle class.

In Italy, at the prompting of the CIA, the bourgeoisie and the state machine braced themselves for a seizure of power by the military, with the fascist thugs as an auxiliary. At the last moment they hesitated and abandoned the project.

The reason was their fear of the inevitable reaction from the powerful proletariat. It would lead to a civil war, which they were not certain they would win. A coup of the military would have provoked a situation like that of July 1936 in Spain.

So the capitalist rulers are not prepared to risk this kind of action until there is absolutely no other way out and they are forced to put their whole existence at stake. Consequently they have largely dispensed with the service of the neo-fascists - at least for the time being. The latter have anyway split in two and are now completely ineffective.

Thus we see that it is wrong to draw lessons from the past in the way the sects do - expecting every detail to be repeated in exactly the same way. The only time they use the writings of Lenin and Trotsky they misuse them because of their lack of understanding of Marxist method.

This method takes all social processes in the interaction on the classes in society, the strength and the relation of forces, the international environment, balance of classes and so on. The enormous preponderance of the working class as a social force, the fact that it is the overwhelming majority in all the main countries of industrialised capitalism must be weighed against the shrinking numbers, strength and cohesion of the various strata of the middle class. Their combative power is shrinking when opposed to that of the working class.

Of course, it is possible for individuals and even small politically backward groups infected with racialist ideas to support the National Front. Some will even join. But they can only be attracted in any numbers by a dynamic mass movement of fascism - even then they will be mainly unemployed and absolutely demoralised workers. This kind of development can only come after some decisive defeats of the workers. Not only one, but under modern conditions there would have to be a few. Yet there has been no great defeat for the proletariat in decades.

Despite unemployment, the trade unions are growing in numbers and strength! The position of the proletariat is one of unprecedented power, despite the recent paralysis caused by the Social Contract and the disillusionment with the measures of the Labour government.

The Marxists must publicise the dangers of fascist reaction and attacks on Labour Party premises and meetings. The attempts to burn down various left wing bookshops and premises underline the danger these scum represent to the labour movement even at the present time.

The movement and the working class must be educated to the danger these organisations, however small, represent to the rights of workers.

Supporters of Marxism will never tire of pointing out that the real aim of these organisations is to atomise the working class and render it helpless in the face of the ravages of the capitalists.

Their programme is the complete destruction of the trade unions and the Labour Party, to take away from the workers all their democratic rights - the right to organise, the right to strike, the right of assembly, free speech and a free press and even the democratic rights of elections and the right to vote freely for candidates of their own choice. That is, the fascists aim to destroy the elements of a new society that exist in the labour and trade union movement. They would stop at nothing to prevent the possibility of an overthrow of capitalism, using the savage methods of concentration camps, police and military terror etc.

Marxist supporters must expose these views but they must have a sense of proportion as Marxists did in the post-war struggle against the Mosleyites. As we predicted, the latter have largely disappeared as an organised force. The esoteric doctrines of their leader had no appeal to plain reactionary petit-bourgeoisie.

The real menace of fascism, perhaps in the not too distant future will probably come from the reactionary wing of the Tory Party. The howls over the closed shop and the bayings for action embodied in resolutions from the Tory constituency parties, are indications of upper middle class and middle class reaction.

Under conditions of a protracted economic decline, with the social storms which would face a Tory or National government, the right wing Tories, plus so-called 'liberal' Tories in groupings like the Tory Reform Group, plus a section of ex-Labour Party right wing reformists, would reveal increasing discontent. They would demand drastic action against the unions, 'those Bolsheviks and extremists', with their 'unreasonable' and 'intolerable pressures', 'throwing their weight about' etc.

The elements that form the Monday Club are the types that would hive off to the right and form the core of a new organisation. Besides union-bashing, they would also engage in social demagogy. Like the Monday Club, such an organisation's racialism would be overt - 'stop all coloured immigration', 'send back all illegal immigrants and black criminals and muggers'. The poison would be there without the crude nazi-like ravings and outpourings of the National Front.

If there were a big majority National or Tory government the right wing would move increasingly into opposition over the lack of measures against the workers' organisations. Under heated conditions, an early split would be possible. More likely a split from the Tories would take place under a new Labour government, particularly if it were a left wing one, and the Tory Party were incapable of effective opposition.

Such a right wing party would try to organise the small shopkeepers, the small business people, professionals, technicians, managers, staff, white-collar workers and politically backward workers, lumpens and criminals into some sort of force.

But we have to emphasise that it would only be the failure of the labour movement to transform society which would bring about this punishment. It would be the penalty to be paid for temporising over drastic measures against capitalism which could result in a further recoil of the middle class from the 'crime' of reformism, just as nationalism in Scotland, and partly in Wales is the consequence of local and national incompetence by the reformists.

But with the rise of a mass movement, as workers, the Labour Party and trade unions move into action with demonstrations and strikes and other means of struggle, the advanced workers will draw behind them the big majority of the more politically backward layers. The National Front has only gained because of the passivity and inaction of the labour movement during the last two or three years.

Once the movement goes into action the Front will be left stranded. Feuding amongst the fuehrers and ego-maniacs who compose its leaders will break out again as support ebbs. The National Front will have new splits as they will be incapable of explaining or understanding what will be happening with the movement of the working class.

Like the sects they live in the past without understanding the specific conditions which led to the victory of fascists in Italy, Germany and Spain. They will be like a poisonous insect which irritates a giant who moves to crush it because it stings. Recently, when the North West TUC moved - threatening to bring 20,000 workers into action, distributing 2 million leaflets etc, the authorities were compelled reluctantly to take action and ban the National Front march in Tameside.

Nevertheless the opportunity should be taken by Marxists to explain the deadly effects of racialism, the evils of capitalism and the loathsome, evil and malignant cancer of fascism and of the National Front itself.

The dialectics of class relations are like a book sealed with seven seals to the 'gentlemen' of the sects. The 'old cart horse' of the TUC, under the flick of the whip of reaction, would flex its muscles and the working class would show its strength.

By involving the mighty Labour Party and trade unions in the struggles against fascism and racialism, typified by the activities of the National Front, Marxists can raise the level of understanding of the working class as a whole to the need to change society.


(1) The National Association for Freedom, an extreme right wing, anti-trade union organisation, which gave advice and support to the Grunwick company in a bitter and long running dispute over trade union recognition. Forerunner of the Freedom Association.

(2) In July 1977 the fascist National Front attempted to march through an area with a large black population. They were blocked on the streets by a counter demonstration in which the Labour Party Young Socialists played a prominent role. The police used riot shields in defence of the NF's 'right' to march.

(3) See Clare Doyle's Month of Revolution (Fortress) for a full account of the revolutionary general strike which gripped France in May-June 1968.

(4) Prominent right wing Labour MPs who all left the Labour Party and ended up supporting the Conservative, Social Democrat or Liberal Parties.

(5) Roy Jenkins, a former deputy leader of the Labour Party, was a driving force in the split by a number of Labour MPs in 1980-1 to form the Social Democratic Party.

(6) Idi Amin, the Ugandan dictator presided over mass murders and expulsions of Ugandans of Asian origin. Some fled to Britain, leading to racist propaganda by the press.

(7) The regime collapsed after supporting an abortive coup in Cyprus in 1974.