John Pepper

Britain’s Balance-Sheet for 1926

Source: The Communist International, Vol. III, No. 5, December 15, 1926, pp. 5-13.
Transcription/HTML Markup: Brian Reid
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CLEAR and unmistakable is the balance sheet of the first half-year of the British miners’ struggle: the General Strike and the miners’ struggle signify a decisive turning point in the history of Great Britain.

The tendency of the mighty British Empire to fall to pieces, revealed more and more clearly during the last decade, has been hastened greatly by the events of the last half-year. England’s position in world economics has become still more undermined. The world monopolist position of Great Britain has suffered a series of shocks. The very structure of the British Empire, the inner cohesion of the component parts of the Empire has been markedly loosened during the last half-year.

In domestic politics there appears a sharpening of class antagonisms hitherto unknown in England. A far-reaching restratification of the classes and a regrouping of the political parties is in progress.

The Meaning of the Miners’ Lockout

The Government and bourgeois press, and the Right and Left Labour leaders, have all tried to make out that the miners’ lock-out is an “ordinary,” “orderly,” “industrial,” trade union struggle. In reality, however, the miners’ struggle developed every day more and more into an open political struggle for power. In reality not only the economic but also the whole political life of Great Britain revolves around this struggle.

The feverish efforts of the parliamentarian gasbags and trade union bureaucrats were aimed at portraying the miners’ struggle as a mere repetition of former miners’ struggles, a repetition of the miners’ struggle in 1921. Of course, the present miners’ struggle has certain points of resemblance to former miners’ struggles in England, but it nevertheless possesses peculiarities that stamp it as an entirely new kind of struggle. The following fundamental factors play the decisive role in this connection:

(1) This miners’ struggle is taking place after the first tremendous General Strike.

(2) The leaders of the miners’ union are no longer Right Wingers, such as Hodges, but “Left” leaders like Cook.

(3) The miners’ struggle is being carried out in the atmosphere of the Emergency Powers Act.

(4) The question of power as between mine magnates and mine workers has been brought up extremely sharply. According to the apt comparison of the “Economist,” an “irresistible force” has clashed with an “immovable object.”

(5) The struggle is proceeding within the shadow of a general bourgeois offensive against the trade union movement.

(6) The miners’ struggle broke out at a time when the British mining industry found itself in a crisis that cannot be solved within Britain alone, nor upon a capitalist basis. The British bourgeoisie is confronted with the dilemma: what is it to do with its “surplus” coal, or what is it to do with its “surplus” miners?

(7) As the arena of this struggle there is no longer a booming but a declining British Empire—and this is fundamental. The British capitalists are less and less in a position to be able to make important concessions to the working class. Mere defence of the prevailing working hours and wages meets with the resistance of the capitalists as a whole, and thereby becomes a political struggle o first magnitude.

The Economic Catastrophe

The six months miners’ strike has resulted in the internal disruption of British industry and has also severed very important world economic relations. The economic journals of Great Britain give one a picture of a tremendous economic earthquake. To be sure, the British capitalists are trying to keep secret and minimise the consequences of this economic earthquake, but the truth nevertheless leaks out: devastation, ruin, economic dead and wounded are seen everywhere.

British coal production, the foundation of the country’s mighty economic structure, is completely paralysed. In April, 1926, the month prior to the struggle, British coal production amounted to 22 million tons. In May, June, July and August, nothing was produced, and only in September was a weekly production of 500,000 tons reached. (“Economist”—Monthly Supplement, October 23rd, 1926.) Not less than 100 million tons of production have been lost, according to the figures in the “Economist”—about 26 per cent. of the annual production of coal in Europe.

The shortage of fuel has sapped the vitality of the other basic industries also. British heavy industry is gradually ceasing to produce. In April, 1926, 147 furnaces were in use with a pig-iron production of 539,100 tons. By the end of September only five furnaces were working and the total British pig-iron production amounted to only 12,500 tons. Steel production in April amounted to 661,000 tons, but in September was only 95,700 tons. The “Economist” is necessarily forced to admit the catastrophe: “Pig-iron production has sunk almost to a vanishing point.”

Heavy Industry Paralysed

By the end of September, all available reserve stocks of pig-iron were exhausted. “Reserves of British pig-iron have now reached the point of exhaustion.”—(“Economist,” Monthly Supplement, October 23rd, 1926.) The paralysis of coal production has its effect in the paralysis of heavy industry, and the lack of iron and steel production of course makes itself felt in the finishing industries.

The longer the struggle lasts the more devastating will be its effects. The capitalists boast that between 200,000 and 300,000 miners have already resumed work.[*] The bourgeois press is lying, the number of blacklegs is much lower, but the bourgeoisie itself is compelled to admit that blackleg coal thus far has played no real role whatever. In desperation “The Economist” writes on October 30th: “If the rest of the men dribble back as slowly as the first quarter of a million it will be next August before the miners are fully at work again. This is the hard fact with which the Government is faced at the end of six months.”

The situation is actually becoming more and more catastrophic for the British capitalists. No coal is being produced, and the chances of keeping up coal imports are steadily decreasing. Great Britain, the mightiest coal exporter in the world, has now become not merely dependent upon European and American coal production, but it must beg for coal. “The Iron and Coal Review” at the end of September reckoned the British coal imports at about a million tons a week. The total weekly deficit is estimated by this periodical, at the end of September at about 2,350,000 tons weekly, that is, 10½ million tons a month. (White Paper on the Coal Shortage, Labour Research Department, October, 1926.)

The catastrophic coal shortage is evidenced also by the declaration of the Secretary of State for Mines, Col. Lane-Fox, in Parliament on November 9th, that the stocks of coal at the beginning of the British miners’ struggle amounted to 10½ million tons. During these six months imports from abroad amounted to 15,400,000 tons. Production of blackleg coal cannot be accepted as higher than three million tons up to the end of October. Taking these three figures together, we have 29 million tons. The normal demand for coal in Great Britain amounts to about 15 million tons per month. For a period of six months, therefore, 90 million tons are needed, and this without taking into consideration the amount of coal exports and bunker coal.

Freights and Food Prices

The elimination of British coal production marked the beginning of a world shortage. The “Economist” states: “Naturally the dislocation is no longer confined to British industries. It may be said to be world-wide.”

America, Japan and Poland have increased their coal production, have re-installed their miners that were out of work, and are boosting production with all kinds of extra shifts; but despite all efforts Europe is being “progressively denuded” of coal reserves, and “the limit of elasticity by way of overtime is approximately being reached in Germany and elsewhere.”

The British coal miners’ struggle has, therefore, caused an upheaval not only in coal relations, but also in shipping relations. There is all apparent “dislocation in international shipping” (“Economist,” October 30th, 1926). Maritime cargo rates are constantly increasing. British shipping, which formerly went out loaded with coal and returned carrying foodstuffs, now sail with ballast instead of with coal cargoes, so that the cargo rates on food imports are doubled.

American tonnage is also being called upon for coal transport to England, but this cargo space would in the ordinary way be utilised, during this harvest period, for grain exports. As a result manifold complications arise. On the one hand the cargo rates on coal are raised terrifically, with a consequent steady rise in coal prices, of course; on the other hand, British food supplies are being disorganised and this must bring about a rise in the price of food.

The demand for cargo space for American coal export to Britain has reached “phenomenal dimensions” (“Economist.”) Freight rates on Canadian grain for England have gone up to 6s. 6d. per quarter, as compared with 3s. 4d. a year ago. Freight rates from the River Plate to England have gone up from 16s. 6d. to 42s. 6d. per ton.

Trade Balance Unfavourable

Stoppage of coal production, vanishing iron and coal production, a decimated textile production, transformation of Great Britain from a coal, iron and steel exporting country, into a coal, iron and steel importing country, tremendous losses in national income caused by the coal struggle, the constant rise in coal prices as well as shipping rates—these have inevitably resulted also in a collapse of the trade balance of Great Britain.

The British trade balance is becoming more and more unfavourable. In the first nine months of 1925 the excess of British imports over exports amounted to 273 million, but in the first nine months of 1926 it had already reached 316 million. This represents a rise in the excess of almost 16 per cent. England is increasingly living at the expense of its foreign reserves, its chances of capital exports are becoming constantly narrower.

According to the estimates of the Board of Trade, the 1923 trade balance allowed 153 million for new investments abroad. In 1924 it was only 63 million, in 1925 only 28 million. The growth of excess of imports by 43 million in the first nine months of this year has eliminated the last possibility of the export of capital this year. The half-year’s coal struggle has had the result that not only is England unable to export capital, but that it bad to dig quite deep into its foreign reserves in order to be able to meet its everyday living requirements.

In connection with the general depression, the wiping out of profits of heavy industry, the unfavourable trade balance, there is also the shattering of the State Budget. Up to October 4th, 1926, the budget showed a deficit of 82 million, as compared with the deficit of only 57 million in the corresponding period of last year. The devastating effect of the economic catastrophe is not fully expressed in this deficit however, since the decrease in revenue from taxes will really not make itself felt until the later months.

Bank Rate to Go Up?

A steady drain of gold from the Bank of England treasury is taking place. According to the estimates of the “Economist” of October 30th: “The steady drain of gold has continued. The net efflux since the readoption of the gold standard now amounts to 4,111,100.”

The pound sterling is below par, it “is still depreciated in terms of gold at the moment.” (“Economist.”) The fear that the Bank of England will have to raise the bank rate is quite general. More and more frankly the possibility of a collapse of the gold standard is being discussed. A demand for a prohibition of the export of capital is being raised in various British capitalist camps. The “Statist” of August 28th, speaks of the existence of a “virtual embargo.” The “Economist” of October 2nd, speaks about the “probability” of a new embargo on foreign loans. J. M. Keynes, the noted Liberal economist, who has already expressed himself against the raising of the first embargo and against the introduction of the gold standard, predicts that it will be impossible to rehabilitate British industry and the recovery of British trade without the reintroduction of an embargo on the export of capital: “I should like to see the embargo re-imposed at once.” (“Nation and Athenæum,” October 23rd, 1926.)

The “Statist,” defending the bankers against Keynes’ accusations, writes as follows: “Where Mr. Keynes errs is in assuming that he has the monopoly of foresight.” (October 23rd.) The opponents of the embargo on the export of capital do not dispute the necessity for such an embargo, they only dispute Keynes’ monopoly in foreseeing this necessity).

Effect on Foreign Politics

Britain’s foreign trade is shrinking. The trade balance is becoming increasingly unfavourable. The gold reserves of the Bank of England are becoming smaller. The solidity of the gold standard, so recently established, is again menaced; an embargo on the export of capital is necessary and is in practice already operative. But even this is not yet all. It is becoming constantly clearer that these far-reaching financial difficulties are making Great Britain more and more dependent upon American finance-capital. The “Statist” (October 30th) states that the menace of a rise in the bank rate can be avoided only if the pound sterling does not fall below gold par in relation to the dollar.

These are the chief features of the economic situation of Great Britain after six months of the miners’ strike. A half year of the coal miners’ strike has thrown British industry back for years.

The economic difficulties of the British bourgeoisie have seriously hampered their activity on the field of foreign affairs. Fully occupied with home politics, British world policy has shown many weaknesses in the last half-year. Not only the economic, but the political balance of trade of Great Britain is unfavourable during this period. We will here give a brief analysis of four groups of questions of foreign politics which have during the past year, revealed a weakening in the world political position of Great Britain, part of them directly and part indirectly connected with the coal struggle.

The Franco-German Rapprochement

Locarno revealed the world political influence of Great Britain during the recent period to be at its height.

France’s Continental hegemony was weakened, Germany’s entrance into the League of Nations gave a counter-balance against France, the “Western orientation” directed against the Soviet Union was adopted, and a sort of bloc of European powers against creditor America brought into being.

But as a result of Geneva, of the jealousies among the European powers and the Brazilian veto backed by the United States, Locarno was blown up. After Geneva a regrouping of the Powers began, an economic rapprochement between France and Germany took place, the Continental Steel Trust was founded, and at Thoiry the foundations were laid for a political entente between Germany and France. Germany’s entrance into the League of Nations did not come as a British triumph; Germany crossed the threshold of the League of Nations not as a counter-weight to France, as in the British designs, but as a counter-weight to Britain, according to the designs of France.

Of course, no one can tell what lease of life this regrouping of the Powers will have, but in any case it means an essential weakening of the British position in world politics. British diplomacy is now seeking to put Italy in the place of France as its ally (Leghorn), and meetings are also being organised (Romsey) between German and British industrialists; but these are only emergency measures. Leghorn is no substitute for Thoiry, and Romsey is still less a substitute for the Continental Steel Trust.

The steel trust has not been organised expressly against England; the British steel industry was even invited to join it. But the British steel industry is not in a position to make such international agreements, and hence in the final analysis the steel trust mast work out against the British steel industry.

The formation of a Continental steel trust has illuminated, lightning-like, the backwardness of British heavy industry. The British steel industry cannot join the international trust simply because it is not yet sufficiently organized:

“Our abstention is at the moment due to the practical consideration that the British steel industry is not sufficiently organised to be able to regulate British production.” (“Economist,” Oct. 9th, 1926.)

The British bourgeoisie is forced to admit that British industry is so unorganised that it is not in a position either to wage a “steel war” or conclude a “steel peace.”

“British trade in its present unorganised condition is as little capable of engaging in a steel war as it is in co-operating in an organised manner with a European combine, and it will not be able to do either one or the other until it has devised some means of concentrating production of different classes of steel in those works, best equipped to produce them and thus reducing costs by running the most efficient works at their full capacity.” (“Economist,” 2nd October, 1926.)

Anti-Soviet Plan Fails

The British bourgeoisie is working along two lines to encircle the Soviet Union: along the lines of the League of Nations, and along the line of an alliance of the Border States continguous to the Soviet Union. The last half-year has brought failures to British diplomacy on both of these lines.

The entrance of Germany into the League of Nations was to make the League a more complete organisation of capitalist powers against the Soviet Union.

While the German bourgeoisie did complete its turn towards the “West” in its world policy, Soviet diplomacy was nevertheless in a position to mitigate the German entrance into the League of Nations by concluding a treaty of neutrality. The Anglo-French rivalry in the League of Nations itself restricts the chances of the British bourgeoisie utilising the League apparatus fully.

The other big plan of the British bourgeoisie, of bringing about a League of all the Soviet Union’s border States “from sea to sea,” also encountered failure recently. The Baltic countries openly refused to take a hostile attitude towards the Soviet Union, and Lithuania even broke through the anti-Soviet front by concluding a treaty of neutrality with the Soviet Union. And although Italy is coming closer to Roumania, it does not quite venture to sanction the robbery of Bessarabia.

Victories of the Chinese Revolution

Every battle won by the revolutionary Canton Army is a battle lost for British imperialism. The higher the waves of the Chinese national revolution surge, the more the influence of Great Britain is driven back.

The Chinese democratic national revolution looks upon British imperialism as the enemy. The British bourgeois press views this situation with growing concern, and during the last half-year the British capitalists have frequently tried to bring about military intervention by the imperialist powers. But Japan demanded too high a price for its co-operation; it demanded the abandonment of the Singapore naval base and a share in the spheres of influence in the richest districts of Central China. American imperialism also opposed intervention; as the “parvenu” with an “open door” policy in opposition to the “arrivê” British imperialism it considered itself very well off.

The advance of the Chinese revolution also means a breach in the British policy of encircling the Soviet Union. When British imperialism appears to the Chinese people as the personified enemy, as the foe par excellence, then the star of the Soviet Union, as the friend and ally of the oppressed peoples of the East, mounts ever higher.

British Imperialism Falling to Pieces

The Imperial Conference which opened in London on October 10th has exposed to all the world the progressive paralysis of the British Empire. The discussions at this conference are really discussions about whether, and how, the British Empire can even be kept in being.

The first connecting link of the British Empire consisted in the export of capital from the “home country” to the Dominions and Colonies. After the first formal embargo on capital exports, Great Britain is again compelled, even though not formally, again to put into effect such an embargo. It is true Baldwin attempted, at the Imperial Conference, to appeal to the sentimentality of the Dominion representatives by reminding them that for many decades, up to the end of 1925, Great Britain made loans to the Dominions of not less than 850 million. But at the same time he was forced to state that Great Britain is no longer in a position to be able to continue this policy of exporting capital, and that henceforth the Dominions would be more and more compelled to turn to America to meet their credit requirements.

The second connecting link of the British Empire consisted in the fact that the Motherland was ready and able to receive the raw material exports of the Dominions. The shrinkage of foreign trade in the last nine months has noticeably reduced its ability to continue to absorb them.

The third connecting link of the British Empire was the British Navy. In the past the Dominions did not develop their own army and navy, they were “defended” by the armed forces of Great Britain. The unchallenged dominance of the British Navy is past however, and the development of the United States’ naval armaments, which is progressing at a terrific pace, exerts an ever-increasing power of attraction upon the Dominions.

On the basis of the crumbling of these material connecting links of the British Empire, centrifugal tendencies have in recent years developed on the political field. In the last half-year, during which the material forces of the Motherland so obviously declined, when the British bourgeoisie and their government had to combat severe internal difficulties, when the prestige of the British Government suffered so heavily through the inner class struggle, tendencies aiming at independence lifted their heads still higher in the Dominions.

On the eve of the Imperial Conference a conflict with Australia broke out, in which the demand was raised for Australian, instead of as heretofore, British governors. South Africa raised the question of its own national flag and sovereign independence. Canada went through a stormy election campaign on the issue of the privilege of the British Governor-General, an election struggle that terminated with an overwhelming victory for the anti-British Liberal Party. On the eve of the Imperial Conference, Canada sent its own representative to Washington; Ireland had already sent its own representative to the American capital. Ireland demanded a seat on the Council of the League of Nations and thereby also complete independence in questions of foreign policy, while Canada announced its diplomatic independence by rejecting the Locarno Treaty. The Imperial Conference was confronted with the fundamental question: how far are the Dominions in duty bound to share the military activity and peace treaties of Great Britain?

From Fiction to Breakdown

The steady step by step decline of the British Empire’s system of foreign policy is shown in the following extract from the leading British journal on foreign politics:

“The difficulty of the present-day situation is largely due to the fact that the assumption which has governed the conduct of foreign affairs since the appearance of the Imperial War Cabinet in 1917—namely, that it was possible for the six self-governing nations of the Empire to consult together sufficiently continuously and sufficiently effectively to formulate a common policy for dealing with foreign affairs and to make themselves jointly responsible for such a common policy—has broken down. The system worked triumphantly after the Washington Conference on the Pacific and naval disarmament. It began to weaken at Chanak. It was badly strained at Lausanne. It was only maintained by a fiction during the London Conference on Reparations. It disappeared altogether at Locarno.” (“Round Table,” No. 64, September, 1926.)

The fundamental facts of the world political situation during recent months; the Franco-German rapprochement, the founding of the Continental steel trust, the fiasco of the British policy of encircling the Soviet Union, the victories of the Chinese revolution, and the process of disintegration within the British Empire—and in the background of all these factors the growing power and increasing competition of American imperialism, as well as the growing power and stabilisation of the Soviet Republics—all these work in the same direction, towards the weakening of Great Britain’s political position in the world.

The Sharpening of Class Antagonism

Class antagonisms in England are sharpening with unprecedented rapidity, as a result of the General Strike and the miners’ struggle. The forces of capital and labour are colliding directly with one another, as never before in British industry. It was no coincidence, it was but a dramatic summarisation of the whole situation when the miners’ delegate conference in London rejected the Tory Government’s slave proposals, and proclaimed the intensification of the battle and the organisation of a “War Council,” on the same day that the Scarborough Congress of the Conservative Party declared war upon the entire trade union movement of Great Britain.

Premier Baldwin himself characterised the situation in his Scarborough speech, by stating that the present position of British industry resembles that of Europe before the war: the very fact that on both sides there are powerful organisations armed to the teeth must in the end lead to violence. It is also characteristic of the situation that whilst the entire Conservative press rages against the “dictatorial desires” of the workers, two Liberal periodicals, the “Nation” and the “New Statesmen,” carry on a big discussion on “class war.”

The basic fact of the British situation is that the Government has lost its character of being “above the battle” in the eyes of the broad masses. What was formerly only said by the Communists, that the Government is but a class government of the bourgeoisie, is now being repeated by the leaders of the Labour Party and also by the Liberal Party. Lloyd George declared in his Barnstaple speech on October 17th that “Class war began at Scarborough.”

One cannot over-estimate the significance of the fact that England—free, democratic England!—has been governed for more than six months under “Emergency” laws. It goes without saying that the dictatorial procedure of the capitalists and their Government must have a disruptive effect on Parliamentary illusions. The eight-hour law for the miners is called a class law even by the Liberal Party.

British Democracy, 1926 Pattern

During the last six months, thousands of British workers have been thrown into prison. The Communist Party has been persecuted with especial severity. Not less than 1,200 members of the Communist Party were arrested; that is, according to the political report of the Central Committee at the British Party Congress, between a fourth and a fifth of the total pre-strike membership of the Party. The banning of meetings directed against the leaders of the Miners’ Federation spoke a clear language, and one that was comprehensible to the working masses. The far-famed “self-government” of the British local authorities has been destroyed by the Tory law that empowers the Government simply to remove elected local administrative officials who show themselves to be “too friendly to Labour.” Social policy has also been revised retrogressively; unemployed benefits and poor law grants have been cut.

The X-rays of the General Strike and miners’ struggle have illuminated the famous British Constitution. For the first time the working class sees in surprise the skeleton of the dictatorship of capital under the soft flesh and fat padding of “democracy.”

The defeat of the miners’ struggle is considered by the capitalists as a political aim of the first magnitude. They fight against the Miners’ Federation first of all because of its political significance as a mighty citadel of the British proletariat. On August 19th the “Times” wrote frankly to the effect that the resistance of the mineowners to national agreements with the Miners’ Federation originates not so much in the thought that such an agreement standardises the wages of the entire industry, as from the realisation that this organisation of the miners has become an aggressive factor in carrying out political aims. The Liberal “Nation” busies itself with the “ideologists” of the Mining Association and cites the leader of the mineowners, Evan Williams:

“The moment you have set tip a national agreement with a National Board, you bring every question that is relevant to that Board forward as a political issue, with debates in the House of Commons, and you get the Government involved . . . .” (“Nation,” September 11th, 1926.)

An analysis of the political situation in England gives us four basic lines which reveal the intensification of class antagonisms:

(1) The “Diehards’” victory inside the Conservative Party.

(2) The weakening of the Tory Government in the country.

(3) The disintegration of the Liberals.

(4) The rise of the Labour Party.

The “Diehards” Win

As a result of the General Strike and miners’ struggle, important re-groupings have taken place in the reigning Conservative Party. In the elections at the end of 1924. this Party was still dominated by the moderate Centrist elements. The Conservative press was pleased to describe Baldwin, the leader of the Party, as a “quiet,” “sensible” man who was inclined to compromise. Baldwin himself enthused over patriarchal conditions in industry. His chief slogan was: “Peace in our time.” The crisis of General Strike and miners’ struggle has now made the aggressive, militant, Right Wing diehards into the leading elements of the Conservative Party. The Scarborough Congress of the Tory Party was an avowed victory for the “Diehards.” The whole Conservative policy is now directed towards an offensive against the proletariat, towards smashing the Labour movement.

Inside the Conservative Party various questions are causing differences of opinion. These are the old question of a protective tariff versus free trade, the question of combatting the Soviet Union, the question of the methods to be used in the general struggle against the trade unions; these are the questions recently under dispute between the Centrist and the Diehard wings of the Conservative Party.

On the question of relations with the Soviet Union, Baldwin is still victorious, but a crumbling of the Party discipline became evident when twelve Conservative M.P.’s introduced a motion for the annulment of the trade agreement with the Soviet Union; and after the Premier’s declaration in Parliament against this proposal, six more M.P.’s still supported it.

At that time Baldwin was still victorious. At Scarborough, however, came the complete breach and the victory of the Die-hard policy. Scarborough has pledged the Tory Government and Parliament to the smashing of the trade unions. Scarborough raised the demand for the re-establishment of the old power of the House of Lords. It is noteworthy that of the 47 resolutions proposed at Scarborough no less than 12 dealt with the trade union question and 7 with the House of Lords.

Even Churchill a “Moderate”

The leading Conservative organ, the “Morning Post,” has been conducting a discussion on the question of the restoration of the powers of the House of Lords, which were cut down by the Liberal legislation in Lloyd George’s time. The extent to which the Conservative Party has now been pushed to the Right by the Diehards is best shown by the fact that even Churchill now belongs to the “moderate” elements of the Party. It is well known that on the question of fighting the Soviet Union and on that of aggressive policy against the General Strike Churchill was still with the Die-hards. On the questions of protective tariffs and of dealing with the miners’ lock-out he has a more “moderate” policy. He wanted to bring the lock-out to an end through the Government intervention. He was, however, almost openly disowned by the Government.

The Government has continued its “inactivity” which the Liberals and Labour Party reproached it with, an inactivity which is in reality an intensified feverish activity on behalf on the mineowners. Step by step the Government policy against the miners became more aggressive. The Government took the first step towards the Right when, at the outbreak of the General Strike, it deserted the Royal Coal Commission’s Report; the second step when, on the throttling of the General Strike, it simply ignored the Samuel Memorandum; the third step when it rejected the Bishops’ compromise proposal; the fourth when, in September, it called its own proposals an ultimatum and withdrew them. The more moderate elements view the Die-hards’ advance with uneasiness, and it is characteristic that so Conservative a periodical as the “Fortnightly Review” (November, 1926) raises the question of “Winston Churchill and the Future,” and speaks of Churchill as the “man of the future” who is to destroy the “power of Die-hardism” in the Conservative camp and perhaps become a leader of the new “Centre Party.”

In the elections at the end of 1924 the Conservatives succeeded in rallying around themselves gigantic masses of the petty bourgeoisie on the issue of the “defence of private property,” and of the “Communist menace.” At that time the working class voters of the Liberal Party went over to the Labour Party and for this reason the latter registered a gain of a million votes despite its loss of seats.

Weakening of the Tory Government

The Liberal petty bourgeois voters at that time streamed over in hordes to the Conservative Party. But the policy of the Tory Government, which can solve neither the question of unemployment nor the economic crisis, and its aggressive policy during the General Strike and miners’ lock-out, has completely changed the sentiment of the country. The Government promised social peace, and in the last half-year England has been shaken by the worst social crisis in its existence. The popularity and authority of the Government have been tremendously weakened during the last half-year. This fact is one of the most important features of the present situation. “The New Statesman” (October 30th) is entirely right when it says:

“ . . . . everybody, both inside and outside the House of Commons, knows that since May 1st there has been throughout the country a defection of Conservative voters that amounts to a landslide. If the Government were to go to the country today it would have difficulty in holding even one half of the seats it holds at present.”

The “Review of Reviews” (October 15th), unhampered by any Party ties, states:

“Its (the Government’s) authority has declined so rapidly that doubt whether it can long continue to hold office is spreading ominously; and some of its opponents place the date of dissolution and a general election as early as next February. . . .”

“The opportunity for the Conservative Party to establish itself as an agency of orderly progress and national reconstruction has been lost; and for the moment there is no other party or political combination in sight to take its place.”

The petty bourgeois masses which in 1924 went over to the Conservative Party are now beginning to desert the Conservative Party. In 1924 the Conservatives had no absolute majority, they polled only 46 per cent. of the votes cast; and under the peculiar relationships of British electoral geometry a relatively small reduction of its voters will suffice to turn it into a minority in parliament also. All by-elections since the outbreak of the General Strike ended with a heavy reduction of its vote or with the loss of seats they hitherto held.

Disintegration of the Liberal Party

Among the essentials of the situation is the fact that the decline in authority and prestige of the Conservative Party that may lead to its defeat, if an election were to take place at present, has not led to a growth in prestige of the Liberal Party. On the contrary, the General Strike and the miners’ struggle have hastened extraordinarily the process of disintegration in the Liberal Party which has been going on for years.

The Liberal Party was once the classic party of the bourgeoisie. Since the rise of finance-capital, the Conservative Party has more and more become the Party of big capital, and the Liberal Party has more and more transformed itself into a Party of the petty bourgeoisie, of the technical and industrial intelligentsia, and also of certain sections of the working class.

Since then the Liberal Party has vacillated uninterruptedly between the Conservative Party and the Labour Party, just as the petty bourgeoisie always swings back and forth between capital and the proletariat. During the war Lloyd George, the leader of the petty bourgeois wing of the Liberal Party, concluded a coalition with the Conservatives; in the post-war period by his “Coal Plan” and his “Land Plan” he has been seeking a rapprochement with the Labour Party. The 1924 elections brought about the political defeat of the Liberal Party for the very reason that the elections were conducted on the basis of the pros and cons of private property, and the masses of the petty bourgeoisie preferred the Conservative Party as a better protection of private property.

“Socialism v. Individualism”

At the beginning of 1926 Sir Alfred Mond, an influential capitalist, left the Liberal Party and joined the Conservative Party. In his letter to ford Oxford, he gave the following reason: “The only question to-day is Socialism versus Individualism, and the Conservative Party is a better instrument for the combating of Socialism.”

The General Strike carried the disintegration of the Liberal Party to its conclusion. With the instincts of a demagogue Lloyd George sensed in the General Strike a popular question; he did not want to declare for the “dictatorship of the Conservative Government.” The leader of the bourgeois wing, Lord Oxford, went over openly to the side of the Tories and demanded the employment of force to smash the General Strike.

Another influential member of the Liberal Party, Hilton Young, likewise left the Party and joined the Conservatives, with the following letter to Baldwin:

“I see only one chasm in our present-day politics. On the one side individual liberty and prosperity based on constitutional methods. On the other side Socialism, which more and more frankly resorts to unconstitutional and revolutionary methods. The General Strike has convinced me that in view of this deep chasm the maintenance of minor political differences is no longer compatible with our duty towards society,”—(Retranslated.)

The resignation of Lord Oxford from the leadership of the Liberal Party restored a temporary and apparent unity in the Party. But the shakiness of this unity is shown by the resignation of a well-known representative of the “Radical wing” of the Liberal Party, Kenworthy, and his transfer to the Labour Party. The Liberal Party is to-day incapable of following an independent policy. Its bourgeois elements are going to the Conservatives and its petty bourgeois elements are more and more influenced by the force of attraction of the Labour Party.

The influence of the Labour Party is growing. Its mass influence has been extraordinarily strengthened during the last six months. All Parliamentary by-elections and all municipal elections which have taken place during the last six months demonstrate the victorious advance of the Labour Party. The significance of these victories is further increased by the fact that very often the Conservatives and Liberals are forming a coalition against the Labour Party candidates.

The Rise of the Labour Party

In the London municipal elections (January, 1926) the Labour Party vote rose from 35 to 38.4 per cent. of the total votes cast. In a municipal by-election at Birmingham (February, 1926), a Liberal majority was changed into a Labour majority. At the Darlington parliamentary by-election (February, 1926), the 1924 Conservative majority of 2,166 was transformed into a Labour majority of 329. In the Bothwell parliamentary by-election (March) the Labour Party increased its 1924 majority of 3,227 to one of 6,090. Under the immediate impress of the General Strike the Conservative Party was defeated by the Labour Party in two successive by-elections. At East Ham (May) the Conservative majority of 1,057 was turned into a Labour majority of 1,627. In the by-election in North Hammersmith (May), there was the transformation of a Conservative majority of 1,955 votes into a Labour majority of 3,611. In the municipal by-elections of Chiswick (June), a Tory majority of 427 was changed, into a Labour majority of 541.

In municipal by-elections at Ladywood (Birmingham) the Conservatives lost their majority and the Labour Party attained a majority of 1,146. In a parliamentary by-election at Wallsend (July) the Conservative vote was reduced by 5,833 and the Labour majority was raised from 1,602 to 9,027. In the most recent municipal elections, which were conducted under the immediate influence of the miners’ strike and the Government’s aggressive policy against the unions, the Labour Party scored a gain of 206 seats.

An interesting estimate by the Scottish organ of the I.L.P. “Forward,” (October 2nd, 1926) states that at all by-elections since the general election, the Conservative vote has been reduced. This reduction amounts to an average loss of 5,000 Tory votes per constituency. Up to the end of July, 1926, the Labour Party vote in the by-elections exceeded the Tory vote. The Labour Party polled a total of 200,093, while the Conservative Party received only 196,430 votes. The opposition votes (Labour and Liberal combined) have swamped the Tories still worse; up to the end of July they amounted to 342,216.

Not only are ever-increasing masses of workers leaving the capitalist parties and streaming into the Labour Party, but broad strata of the petty bourgeoisie are also beginning to see in the Labour Party the representative of their interests. It is no accident that at the last Labour Party Conference at Margate the question of a land policy played such a dominant role. The Labour Party wants to win not only the urban, but also the rural masses, as necessary to secure a majority in parliament at the next election. The policy of the Labour Party proceeds more and more directly toward this end, It intends to be reckoned with as not only a Party of, the trade unions, but it would like to appear as a universal party of the broad masses of voters. This explains also the Labour Party leadership’s explosion policy against the Communists.

Differentiation in the Labour Movement

For some years we have been observing the crystallisation of a Left Wing in the British Labour movement. The basis for this has been the decline of the British Empire, the Labour aristocracy’s loss of its privileged status, and the fall in the standard of living of the British working masses in general. This differentiation has been tremendously hastened and intensified by the General Strike and the miners’ strike. In the last six months two historically important differentiations occurred in the British Labour movement.

The first differentiation came immediately after the General Strike. The broad Left mass movement, which had made itself felt in an indefinite manner, included the majority of the working masses and was headed by an important section of the old trade union and Labour Party bureaucracy. This underwent a differentiation at the outbreak of the General Strike. The General Strike marked the parting of the ways. The “Left” leaders went over to the side of the Right Wing and the bourgeoisie, and, of course, they have drawn with them also a section of the masses. But millions remained on the Left, especially the masses of the Miners’ Federation, and also the leadership of the miners’ union, which did not participate in the general disarmament after the General Strike but instead continued the struggle.

The second essential differentiation tool, place in the second phase of the miners’ struggle. The leadership of the Miners’ Federation embarked upon the ways of compromise, amnestied the traitorous General Council of the T.U.C., flirted with the unholy proposals of the holy Bishops, and revealed a defeatist inclination to accept the destructive proposals of the Government. But the masses of the miners did not follow their leaders in the paths of compromise, vacillation and betrayal. The masses of miners forced their leaders to carry on. By a series of votes they compelled the sharpening of the struggle.

The Left Wing Grows Clearer

The outlines of this Left Wing became more and more clear; though no longer so broad it was also no longer hazy, but always stronger, more radical, more under the influence of Communism. All the events of the past few weeks in the British Labour movement speak this same clear language. The majority of the largest union, of the Miners’ Federation, to-day stands not only to the left of the Right Wing leaders of the General Council, not only left of the sham Leftists of the Purcell sort, but also to the left of leaders such as Cook and Herbert Smith.

The last Trades Union Congress, as well as the last Labour Party Congress, showed the appearance of a determined Left Wing. The Minority Movement in the trade unions and the strengthening of the Communist Party are also an index of the consolidation of this decisive Left Wing.

“Co-partnership,”—is it possible?

The bourgeoisie is trying, on the one hand with violence and on the other with tricks and finesse and by means of the policy of class collaboration, to check this differentiation process within the Labour, movement itself. The newest slogan of a section of the bourgeoisie and of a part of the trade union bureaucracy reads: The application of “American” methods in the Labour movement. The Government is trying to introduce legislation on “co-partnership” and “profit-sharing.” Many bourgeois societies and Leagues are being former for the establishment of “industrial peace.” Organisations are being formed for the “Defence of the Freedom to Work.” The organisation of company unions on the American model is being attempted as a substitute for the old trade unions. All these plans and proposals, however, will remain air-castles for the masses. The class collaboration period in Great Britain is not in the future but in the past. The economic and social foundation of class collaboration have been destroyed by the decline of the British Empire.

In view of the serious crisis of British industry a “co-partnership” can only be one of bankruptcy. Since economic life is featured by a failure of profits, any “profit-sharing” can only be a sharing in losses. The compromisers of the bourgeoisie and Labour bureaucracy propose “profit-sharing” to the working masses—that is, an imaginary, a non-existent, profit-sharing of the future—and demand in exchange a real and very obvious increase of working time and reduction in wages.

The “Americanisation” of the British Labour movement cannot succeed, cannot become a new tendency. Two powerful, actually existing tendencies can be seen in the depths of the British working masses: one trend is away from the bourgeoisie, away from the Conservative and Liberal Parties towards the Labour Party MacDonald; and the other trend is away from MacDonald and Thomas towards the class struggle, toward Communism.

The Outlook for the Future

The following chief points show the trend of development in Great Britain in the immediate future.

Victory for the miners’ struggle is objectively possible. Objectively the conditions were never so favourable for this victory as at present. The economic exhaustion of the country has reached the limit at which the Government under the pressure of the masses must in the immediate future exert pressure upon the mineowners. Coal exports from Europe cannot be increased any further. All objective factors for the victory of the miners are at hand in full measure. The victory would be inevitable if the subjective factors were also present if the will to fight on the part of the great masses of miners succeeds in again bringing the vacillating leaders into line, in overcoming the defeatist mood of the growing number of blacklegs, in eliminating the traitorous mediation of the General Council, in checkmating the intrigues of the Government and nullifying the forcible measures of bourgeois dictatorship.

But even if the miners are defeated by the betrayal of their own leaders, the desertion of a part of the workers themselves, gnawing hunger and the violence of the Government, such a forced victory will bring no resolution of the question. Even the more clear-sighted elements of the capitalists see that.

“The present struggle is not likely to come to a clean end. It will tend rather to assume a new form, and to keep our coalfields in a condition of unceasing trouble and confusion, until we succeed in securing the atmosphere of a new regime.” (“Nation,” October 30th, 1926.)

And even the “Statist,” one of the avowed defenders of the interests of the big capitalists, comes to the same result:

“A frayed end to the strike, brought about by sheer exhaustion on the part of the men, would leave a residue of bitterness that would destroy all chance of establishing that industrial harmony so essential for efficient production.”

For the miners’ fight is no ordinary industrial fight and cannot be conducted either with ordinary “trade union” means; nor can it, for the same reason, be ended by ordinary means.

No “Trade Revival”

The general economic situation in Great Britain cannot radically improve in the immediate future. Its market possibilities remain unchanged—poor. Unemployment will remain constant. Economic disintegration, caused by the miners’ strike, will exert its effects for years. (In this respect Churchill is a thousand times right.)

The German and American coal industry has taken advantage of the coal shortage to make many long-term delivery contracts, which will shut British coal out of important sections of the world market for a long time. The Continental steel trust, when one takes a long view, will narrow down the market for the export of British steel production to the Continent. An economic crisis in America, which is inevitable within the next year or two, will force the United States also to intensified competition on the world market.

The unfavourable balance of trade, the dwindling of the gold reserves, and the menace of the breakdown of its currency, only puts Great Britain under increasing financial dependence upon American finance-capital.

A House Divided

The British Empire will not be in a position, in the immediate future, to conduct a uniform foreign policy. The Imperial Conference now in process is serving far more to make conscious the clash of interests within the British Empire than to eliminate them.

British industry will now make feverish efforts to effect its trustification. It must make up for its omissions of decades. American, German and even French industries have left it miles behind in organisation and concentration.

As a result of the British coal crisis, the question of trustifying or nationalising the British coal industry becomes the question of the day. The formation of the Continental steel trust has brought it home to the British bourgeoisie that its own steel industry can neither wage a “steel war” nor conclude a “steel peace.” In the immediate future rationalisation and trustification will become the slogans of the hour in England, and the capitalist offensive against the working class already launched, will be intensified along these lines. The prestige of the Conservative Government is declining, the Liberal Party is disintegrating, the Labour Party grows. This situation foreshadows two alternative possibilities. The first possibility is that the bourgeoisie and its Conservative Government will try to smash the Labour movement by force. There is the possibility that by dictatorial methods, accompanied by Fascist tendencies, the bourgeoisie will smash the Labour Party in its present form, rob it of its trade union foundation and thereby prevent a parliamentary victory and a Labour Party majority. This perspective would lead to a more hurried, immediate and direct differentiation in the Labour movement, and would establish the Communist Party as a mass party, as the Party of the proletarian dictatorship, against the dictatorship of the bourgeoisie.

Another possibility is that the Conservatives will have neither the power nor the time to mobilise the weapons of extreme force, that the possibilities of parliament and democracy (and with them the illusions of the masses), will nevertheless remain intact enough, although weakened, for the Labour Party to win a decisive victory at the next elections.

The question of a second Labour Party Government would then become the question of the day. There would then be a chance of the Labour Party receiving an absolute majority in Parliament, or else of being able to form as by far the strongest party, a government with the support of a section of the Liberals.

Another Royal Labour Government?

It is possible that a section of the Liberal Party would be ready to support such a Labour Party Government, under certain conditions. Many threads have been spun between Snowden and Lloyd George. MacDonald also has of late not altogether excluded the combination. The policy of the Liberal and of the Labour Party leadership on several questions of late has been essentially the same, e.g., in dealing with the General Strike and the miners’ struggle in most questions of foreign policy and in the question of the agrarian programme.

In many respects a second Labour Party Government would have a different and greater significance than the first one. The British proletariat has already lost some of its illusions. It has gone through the school of six months of the E.P.A. The developments of the last six months, the experiences of the General Strike and the miners’ struggle, really mean a turning point in the history of the British Labour movement. A more powerful Left Wing has already crystallised, and it can only be a question of more or less time before this Left Wing will transform itself into a Communist one, which will stand not only under the influence, but also under the direct leadership of the Communist Party.

The final struggle between the Labour Party leadership and the Communist Party for a majority of the Labour movement would begin. On the horizon in Britain is seen more and more sharply the contours of the Communist Party. The British capitalists with their developed, ripe class instinct, sense this. Joynson Hicks, the Conservative Home Secretary, was right when he declared: “It is necessary to keep in mind that we must prepare ourselves for a war of position against the Communists for the rest of our lives.”



* This article was written before the decision to negotiate district agreements.

 This and most of the quotations that follow have had to be re-translated from the Russian.