Max Shachtman

The End of the Labor Cabinet

Wall Street Cracks the Whip and MacDonald Jumps

(August 1931)

From The Militant, Vol. IV No. 21, 29 August 1931, p. 1.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

The second Labor party government of England has pased into limbo, and its departure will not be marked by the slightest feeling of regret by any class conscious worker. For twenty-six months, it limped along on the unsteady crutch supplied it by the sufferance of the Liberal party votes. The unemployment problem which it undertook to solve when it assumed office has not only been left without solution, but has increased in magnitude and acuteness. The workers’ standard of living which it so nobly promised to preserve, has sunk to a lower level – no struggle of resistance to wage cuts met with anything but a frown and implicit sabotage from the statesmen of the Second International. If the Indian workers and peasants did not suffer more than they did under an imperialist regime of blood and iron, it was not for lack of willingness on the part of his majesty’s most loyal socialists – Laborite bullets and police clubs were distributed just as freely among the Indians striving for freedom as they were in the wildest days of any Tory government.

If anything, the second appearance of the MacDonald ministry surpassed the first only in the vileness of its servility to imperialism. The kindest thing that can be said about its record in power is that it was just one shade less revolting than the praises sung for it in the United States by Norman Thomas, Oswald Villard, and the refined gentlemen of the same kidney.

MacDonald and the Dole

The Labor government was shivered on the reef of a distinctly class issue. The official register for unemployed on August 10 showed a figure more than double that registered when “labor” came to power. Far from diminishing in bulk, unemployment has come to stricken English economy to stay. Canute could easier command the waves of the sea to recede than MacDonald could decrease the number of jobless or figure out a “good” way of solving the problem. Out of the $600,000,000 deficit estimated for the next budget, some $200,000,000 was calculated as the sum the government would have to advance, nominally as a “loan” to the unemployment insurance fund – the dole – but actually as a subsidy. The dole, which was originally conceived as a “self-sustaining” institution has been met for almost nine years by a permanent government contribution. Entirely unwilling and unable to cut the Gordian knot with a socialist sword, the idol of the social democracy proposed to solve the problem in as reactionary a manner as any “objective” Tory would endorse: Cut the wretchedly inadequate dole by ten percent. Cut the paltry wages of the civil service employees. Erect a reactionary tariff wall – ten percent – largely affecting foodstuffs which the worker pays for and consumes. That will balance the budget and cover the deficit.

And balanced it had to be, for the potentates of Wall Street had cracked the whip! Gone is Britannia’s pride and power and glory. When Wall Street cracks the whip, the MacDonalds dance, even if the prouder and more aristocratic Chamberlains only shuffle around stiffly. Since July, the gold withdrawals from England to France and the United States have taken on serious proportions. To meet the pressure thus created upon it, the Bank of England was compelled to borrow a quarter of a billion dollars, equally divided between the Bank of France and the United States Federal Reserve Bank. But these credits advanced, to sustain the price of sterling bills has been almost completely exhausted. More credits must be secured to maintain the fragile par quotation for sterling. And where are they to come from if not from the United States? But the New York Federal Reserve Bank, already deeply enough involved politely referred its humble client to “private bankers”. Under this term is concealed the name of the House of Morgan, Britain’s fiscal agent in the United States for decades. But before another penny is to be advanced to England, the American bankers demanded guarantees. Balance the budget! To make it plainer, if it were not plain enough, the British banks elucidated: Cut the dole, cut wages – cover the deficit with the stripped hide of the proletariat.

The Collapse of the Cabinet

But the hide of the proletariat is not so lightly stripped. How strong the resentment of the British proletariat is against MacDonald’s brutal “economy plans”, proceeds clearly from the split in the Labor party’s ranks. Labor cheap-jacks of every description, from the “Left” wing leaders of the trade unions to the reactionary Henderson, cut loose from MacDonald only out of fear that the workers might cut loose from them so violently as to end in the camp of Bolshevism. Unable therefore, to stand pat with a united cabinet, the MacDonald ministry has fallen, cut to pieces by American imperialism. A new cabinet has been patched up, composed of all the parties, from Baldwin to MacDonald. Why does the latter remain prime minister instead of turning the office over to the former? Because the tenure of office of [the] new cabinet is confined to the period necessary for executing the peremptory demands of the Yankee oligarchs. Only the humble, plebeian, Christian MacDonald is low enough to execute so menial and humiliating a task. It is too debasing a job for the high-born Sir Neville Chamberlains, aristocratic Lord Irwins and Sir Samuel Hoares, or even country squires like Baldwin. A fine role for the socialist statesman of the new order! Yet why not? If one must act as a footstool to imperialism, why not crawl under the feet of the mightiest imperialism in the world?

It will not be for long. Four weeks or four months, and MacDonald’s day is done, perhaps never to return to that position again. Feeling is running high against him in the ranks of his own party. The men whom only yesterday he threatened with expulsion from the Labor party are now joined with others to threaten him, MacDonald, and Snowden with the same measure. The mood of the working masses is unmistakable. Nothing but a high tide sweeping towards the Left could wash so inveterate a reactionary as Henderson away from his moorings. From now on and for a long time, every day will be field day for his demagogues and windjammers in the British labor movement. Every rogue, every former henchman of MacDonald, every clever artificer of phrases will seek to capitalize on the growing discontentment of the workers. Far and away in the lead in this despicable game – it is not difficult to foretell – will be the Maxtons and the Wheatleys and the Citrines who themselves crawled out of the MacDonald swamp only the day before. A tragedy, too. For there is no doubt that these Left wing I.L.P. experts in radical talk and timid inaction (to say nothing of outright treason at the “proper time”) will reap the rich harvest of proletarian dissatisfaction, of working class antagonism to MacDonald and his “new economy”, of working class desire and demand for militant action – the rich harvest which the Communists should reap, but which they appear to be still incapable of even approaching.

Over this whole vast canvas of events, which will still unroll before us in all their enormous economic and political consequences for England and the rest of the world, the Communist party is not to be found occupying the place which logically belongs to it. Its name is not even mentioned. It lies somewhere in an obscure corner – groggy, crippled and bleeding from the thousand wounds which a cruelly irresponsible bureaucracy in the Comintern has inflicted upon it for six years. What a horrible price is being paid for the victories of Stalinism ...

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