Ted Grant

Britain in Crisis

Source: Militant, no. 444 (February 23, 1979)
Transcription: Francesco 2010
Proofread: Fred 2010
Markup: Niklas 2010

Many workers must be surprised at the fury and the hysterical bayings of the press, TV and radio against the organised workers in the unions.

This has been orchestrated by the CBI, the monopolies, the Tories and the Liberals. To their shame, many right-wing Labour leaders have joined in this hyena chorus of capitalism.

This outbreak of capitalist mental sickness has been caused by the strikes of the railwaymen, lorry drivers and council workers. But the utter cynicism and depravity of the media, probably unequalled by the yellow press anywhere in the world, are shown by the exposure in our paper of the lies distortions and trumped-up cases of distress “caused by strikes”, particularly concerning the low-paid public service workers.

Not a word appears about the nightmare of living on wages inadequate to cover rent, food, clothing and other essentials. Nothing is too vile or too false to use to incite the middle class and backward layers against workers fighting for a bearable civilised standard of living.

This is the class struggle carried to an “extreme” by the representatives of the monopoly millionaires. But it is the sickness of capitalism not the severe winter conditions which has driven the capitalists insane. There is method in their madness.

British capitalism is losing ground year after year in the struggle for world markets and even in its own home market.

There have now been three years of belt-tightening and sacrifice by the working class through the social contract and cuts in the “social wage” (education, health, social services, transport).

The Chancellor, Dennis Healey, boasted to the Institute of Directors that Britain (i.e. British capitalism) had the lowest wages and the biggest subsidies to big business of any industrialised country in the world. In fact, the working class have been reduced to the position of being the “coolies” of Western Europe.

On the other hand, the social contract resulted in a bonanza of profits for big business. In 1976 profits shot up to £7,408 million after allowing for stock appreciation, an increase of 28.9% in comparison with the previous years. In 1977 they further increased to £10,767 million, up by 45.3% over the previous year.

In the first nine months of 1978, profits amounted to £9,498 million, an average increase of 21% on the first nine months of 1977.

But the figures for investment did not go up. In fact, between 1975 and 1976 the amount invested in manufacturing industry actually fell from £3,522 million to £3,345 million. In 1977 there was a small increase to £3,513 million and in 1978 to £3,860m (all at 1975 prices). None of these figures though reaches the investment level of 1970 (4,196 million).

British capitalist industry has become monopolised and parasitic. The capitalists are short-sightedly grasping at the most immediately profitable investment. Thus they invest enormous sums abroad; in service trades; exploited industries like catering; in property speculation, Stock Exchange gambling, tourism and land. Anything but productive industry.

The amount invested in 1970 (in 1975 prices) in the service trades was £3,669 million. By 1978 it had reached £4,690 million, far in excess of that in manufacturing. The estimate for 1979 is £4,920 million. This shows an increase of over a third. That leaves out of account vast sums invested outside Britain. In consequence, British capitalism (in the words of an article tucked away in The Times business columns) is in “irreversible decline.”


Chancellor Healey, thundering against the workers for breaking the 5% limit, does not take the same stern attitude towards the capitalists. He accepts the crisis of capitalism and tries to unload the burdens on to the backs of the working class.

But the failure to invest means that British capitalism cannot compete on home and foreign markets.

The steel industry’s plight is indicative of the general position of British capitalism. One German worker produces as much as three British workers. One Japanese worker produces as much as three German workers. So nine British workers produce only as much as one Japanese steelworker, not because Japanese or German workers work harder, but because more is invested there in modern industry.

It is estimated that this year 54% of cars sold on the British market will be of foreign make. Britain has dropped from second place in the production of cars to sixth or seventh.

Despite greater profits than their rivals in the past (and even now) the British capitalists have failed, even under the most favourable conditions of wage restraint to use the surplus extracted from the labour of the working class to invest adequately in manufacturing industry.

The Financial Times, the journal of big business, of December 17 1978 quotes Chancellor Denis Healey as saying to a TUC strategy conference in Birmingham: “The reason why Britain’s rate of economic growth is expected to fall off next year is because industry will be unable to stand up sufficiently to competition either in home or export markets.”

Manufacturing and semi-manufacturing imports increased by 14% in 1978. Manufacturing and semi-manufacturing exports only by 7%. We have the frank words of Dennis Healey that in 1979 the position will be even worse.

For him there is no question of screaming at the CBI and the capitalists for “letting down the country”. On the contrary his strictures are against the low-paid working class victims of the social contract.

As Britain’s decline continues, no doubt the right-wing Labour leaders together with the press, CBI and Liberals will blame the disastrous situation on the workers. The working class has the temerity to fight to regain living standards lost over the last four years of “austerity”!

But as a result of the capitalist crisis, the workers are on a treadmill. The monopolies will try to cancel out wage increases by raising prices despite the problems of world competition. Failing to succeed in this way they will exert pressure on the government or engineer a devaluation by provoking panic on the foreign exchange markets.


This debasing of the currency “at a stroke” will wipe out the gains of the Herculean and heroic struggles of the workers to regain living standards. Then the reactionary media will glibly trumpet out that higher wages have caused inflation.

But inflation will be caused by higher prices for the food, raw materials and manufactured goods imported. This is because the pound’s “value” will fall in relation to other currencies.

In any event, prices of food and raw materials, as well as manufactured goods on world markets are increasing, inevitably giving a twist to the inflationary spiral.

However, after their previous painful experiences of devaluation, one of the main causes of inflation, the ruling class will only turn to this drug reluctantly. It requires bigger and bigger doses to have the same effect. On the road of devaluation there is only a dead end.

But the “alternative” of incomes policy, which means squeezing out a greater surplus from the labour of the working class, has been tried since 1948 by successive Tory and Labour governments. When the workers have seen that it is just a racket to increase the share of the employers at the expense of the working class, they have inevitably resisted and the policy has broken down.

The policies of reformism, of gradually reforming capitalism, have been shown to be bankrupt. We have consequently had from the Labour government the adoption of vicious Tory policies. They abandoned the policy of increasing state expenditure (except for arms), and adopted the policy of slashing cuts.

The renegade Prentice, now a Tory candidate for Parliament, has blurted out that there are at least four Cabinet Ministers and dozens of Labour MPs who agree with him and his Tory policies.

This is because many of the middle and upper class Labour MPs live no differently from their Tory peers.

They believe in capitalism, the so-called “mixed economy”, and therefore are prepared to hold down the living standards of the workers in order to bail out the system.

Consequently the right-wing leaders of the Labour Party are forced into the position of openly advocating strike-breaking; of crossing picket lines to try to defeat workers struggling for wage increases. But it was Trotsky who wrote that nobody can break the will of the working class to transform society.

It is because they can see no other course than trying to prop up diseased capitalism that the right-wing reformists behave in this way. Not prepared to “take on” big business they are forced to “take on” the working class.

On the basis of accepting the capitalist system, without fundamental changes, there is a crazy logic in this position. It is the needs of the economic system which forces them to the position of counter-reformism.

Neither inflation nor deflation can serve the interests of the working class. Of course Militant, as a Marxist paper, supports increasing vitally necessary state expenditure on social services. It supports every struggle for wage increases. But when there is a fundamental crisis of capitalism these gains are cancelled out.


There is no enduring solution to the problems facing the working class under capitalism. But in the struggle for higher wages and better conditions and hours the workers will come to recognise the need for a fighting socialist programme and the transformation of both the Labour Party and the trade unions. It is necessary to make Clause IV of the Labour Party constitution a living reality.

The programme of Militant will become the programme of the working class and the labour movement. There is no other course for the working class if they are not to face catastrophe. It is impossible to plan capitalism. The national and world markets are dominant in this system.

The labour and trade union movement must break with capitalism. Labour must be committed to introduce an Enabling Act to break the power of capital. The House of Lords and the Monarchy, both of them reserve weapons of capitalism, must be abolished. The banks and insurance companies plus the 200 monopolies which control 85 % of the wealth must be nationalised with compensation only on the basis of proven need.

By mobilising the trade union and labour movement to carry this programme out we can ensure workers’ control and management of industry and the state.

A plan of production would rapidly modernise British industry to produce an abundance of goods for all. A monopoly of foreign trade by the state would regulate Britain’s world trade.

One and a half million unemployed are compelled to rot in idleness. Capitalist economists themselves have pointed out that given productive work in industry they could produce at least £15,000 million of wealth. That is £20 per week for every family in Britain.

At the moment they are paid £4,000 million to do nothing. That alone amounts to nearly £6 a week for every family if they were back at work. This does not take into account the enormous increase in production that would follow once the workers take over society.

A £70 minimum standard for all including the old age pensioners, widows, the sick and the disabled with a 30-hour week would be entirely possible in a socialist Britain.