Can the Labour party take up the challenge the Right has thrown down and will it be different in government from the sixties and seventies? To answer this, we will need to examine what has been going on in the Labour party since the 1979 election defeat and, in particular, the role and policies of the Left. For, notwithstanding the setbacks at the 1982 Annual Conference, it has been the Left that has been making the running. For the first time, the party has elected a Left leader, though Michael Foot appears today as a rather pathetic and pale shadow of the angry young man at the 1960 Scarborough conference. Like his predecessors, MacDonald, Laski, Strachey, Cripps et al., once in office he has distanced himself from the policies of the Left.
The struggle between Left and Right in the Labour Party is, as we have seen, as old as the Party. The Left now describes its position within this struggle as “democratic socialism” and projects this as the only acceptable alternative to the threats of monetarism from the Right and the creeping corporatism of previous Labour governments, as a method of resolving the deep seated economic crisis that now grips the capitalist world. Tony Benn argues that “the debate about democratic socialism which is now in progress in Britain is also taking place all over the world and its appeal is so great that it will prevail over both capitalism and communism”.
He sees democratic socialism as producing a different social order to both capitalism and communism and has sufficient faith in parliamentary democracy to believe that this new social order will come into being by virtue of the appeal of its arguments, rather than as a result of the wielding of power by a particular class.
This rejection of any class analysis is reflected throughout the Left’s policy, to the extent that they even criticise the Tories for stirring up class antagonism, confrontations and social conflicts. In the wider context of international competition, they do not acknowledge that competition between nation states and multinational corporations is the fundamental cause of the world economic crisis, and it is against the background of that view of themselves that we need to examine the significance of the current debate.
Looking first at the range of measures being advanced to increase party democracy, measures which are positive and which we support, the first point to note is that this is not a new struggle. We have seen that it was present from the founding of the Party, as is reflected by that 1907 conference decision defining the relationship between the Parliamentary Labour Party and the Annual Conference. The re-emergence with renewed vigour of the struggle to extend democracy arises as a response to the corporatist developments in the movement as a whole and particularly the incorporation of the trade union bureaucracies into the machinery of state during recent Labour governments. Corporatism has left the working class increasingly represented by industrial and political organisations working in collusion in pursuit of policies that neither arose within, nor were shared by the class. Pay policy, with the Labour Party and Trades Unions working together for many years to hold back and push down living standards of those they claim to represent, is the clearest example of this development. The basic objectives now being pursued, accountability and recall, democratic selection and re-selection of MPs, election of the Party leader and cabinet, democratic control of the manifesto and the supremacy of annual conference, are all demands that should be embraced by any working class organisation. But, in supporting them, we have to recognise that those advancing these arguments inside the Labour Party do so merely as a counter to what they see as side effects of the policies of the last four years, whereas we, as Marxist Leninists, support them because the struggle around them has a direct bearing on the wider ideological struggle between capitalism and socialism. What is of central importance is the question of building a revolutionary party committed to the overthrow of capital and its institutions.
Before looking at the economic policies now advocated by the Left, some brief comment on what has been happening to the capitalist world economy is necessary.
The growth that occurred all over the western world after the Second World War was preceded by several significant developments. Firstly, during the twenties and thirties, unemployment on a massive scale was created by the reorganisation and destruction of the old heavy industries (eg coal, shipbuilding and iron and steel making); new technology based industries emerged, particularly in light engineering and petrochemicals and the control of industry became concentrated in fewer hands, as finance capital was reorganised. Secondly, the Second World War literally destroyed and changed the pattern of the whole world market. The advance of socialism and the challenge of the workers’ movement led to a settlement in which the reorganisation of the labour market brought benefits to the working class, as well as helping the capitalist class in its task of reconstruction. Influenced by the economic thinking of Keynes, the government increased public spending and introduced the benefits of the welfare state. That phase of Keynesian growth is now exhausted and neither the last Labour Government nor the present Conservative one have shown any inclination to revert to Keynesian policies of boosting growth and output. The international situation which is primarily determined by the large multinational companies and financial institutions prevents any social democratic government from embarking on such a course. That Britain today is in an appalling capitalist mess is the product both of these general developments and of particular features associated with Britain’s decline as an imperialist power. Britain’s share of the world market has contracted at an alarming rate and, although the profit margin has remained comparatively high, the rate of fall of profit in British manufacturing industries is greater than in comparable countries. This in turn has lead to a marked reluctance by capital to invest here, or to retool and reconstruct old industries. The present Tory government’s policies do not encourage such investment anyway, as greater and easier profit can be made abroad, in Western Europe, North America and the Third World, with the result that the domestic economy is starved of finance – a problem made worse by high interest rates in Britain.
It is clear that the capitalist class is interested in combating the falling rate of profit which results from these factors and has sought to do this by weakening the labour movement, closing down large sections of industry which no longer serves its interests and diversifying production into areas of new technology which are capital intensive. Labour intensive production is relocated to Free Trade Zones (FTZs) in Third World countries, which are characterised by an absence of government regulations, by tax holidays and a labour force kept in line by fascist terror. The zones are colonies within neo-colonies. The cheapness and repression of the FTZ’s work force has meant that the rate of exploitation of the workers in the zone is greater than anywhere else. It is to the workers in the zones that industrial capital now looks to for providing the “living dole” to the permanent, structurally unemployed in the metropolitan centres. This is the new world order.
But, while imperialism has taken on a new lease of life and a new political stance – the political economy of human rights – it has sown a resistance by the people. Capitalism in the neo-colonies has not been accompanied by democracy, the institutions of power have not been legitimated by a mediating politics, its development has been far too rapid and unhinging. It relies on repressive authoritarian regimes to see its interests protected at all costs yet still people take up the challenge against the regimes and their foreign supporters.
This struggle will take on different forms in different countries. Sometimes it will be obviously class orientated, but on other occasions it will be apparently national. But, because of their experience of capital – of the undisguised rawness of their exploitation and oppression – the struggle will be profoundly anti-capitalist, so that the new economic order already dictates its own downfall. But what is the answer of the Labour party in Britain to these developments?
The policies that they intend to pursue are perhaps best represented by the document “Peace, Jobs and Freedom”.
It outlines the following ten features of what it calls “a powerful new economic strategy based on public ownership, expansion and democratic planning”.
1 the restoration of full employment;
2 economic expansion by increased public expenditure to meet pressing social and community needs and to create jobs;
3 to curb inflation via price controls and “the closest co-operation between a Labour Government, the Party and the Trade Union Movement”;
4 international agreement to help all countries to expand their economies, matched by a determination not to allow manufacturing imports to continue to destroy our industries and jobs;
5 strict control over international capital movements;
6 extension of public ownership in each important industrial sector combined with planning agreements to guide the activities of the huge companies that dominate the economy;
7 progress towards genuine industrial democracy and the promotion of co-operative developments in all its forms;
8 work sharing to combat the economic crisis and the loss of jobs that flow from the unplanned introduction of new technology;
9 fundamental reform of the EEC and amendment to the European Communities Act.
10 acceptance that these policies would not be implemented whilst the present unequal balance of wealth and power persists in Britain and proposals to strengthen the power of the House of Commons, abolish the House of Lords and introduce a full Freedom of Information Act to strengthen democracy against privilege and patronage.
These are clearly policies of a party wedded to the concept of the management of capitalism and not its overthrow. What these policies seek to do is create a brave new world of the eighties and nineties and to put forward the idea of a “people’s capitalism”. There is nothing in all this that challenges in a fundamental way the private ownership of the means of production, distribution and exchange. Once again, the Labour ’Party is seeking to “close the investment gap” with public investment. There is nothing new here, since Labour Governments have always sought to bolster private capital with public subsidy. Nowhere are the problems inherent to the capitalist mode of production dealt with; there is no mention of the class struggle – only of the national interest; no mention of the international competition between nation states and multinational companies that, as we have already said, is at the centre of the world imperialist crisis. To call, as the Left does in point 4 above, for agreement to help all countries to expand their economies and, in the same breath, to call for import controls is, in the context of capitalist production, directly contradictory. Whilst the motive for production remains profit, there can be no international cooperation, only the cut throat competition that leads to world wars between competing imperialisms. To propose that the continuance of the mixed economy is anything more than the continuance of capitalism is nonsense, whatever the detailed changes. The motive for production would remain profit, the relations of production would remain capitalist relations and the multinationals, as they have proved time and again, (e.g. ITT in Chile, Chrysler/PSA in UK) would remain free to extend their control over the economy and those who work for them. It would remain a capitalist society, with all the features of the capitalist crisis squeezing out the measures designed to soften the impact of capitalism on working class interests. The Labour Party does not even claim to represent working class interests. It does not recognise the basic antagonisms between classes that is the driving force of history. On the contrary, as we have shown, it sets out not to present a class interest, but a non-existent “national interest” common to all classes.
[EROL note: In 1981 the Wembley conference increased the influence of trade unions on the party conference itself in the selection of Labour parliamentary candidates. This ’triumph of the left’ prompted leading figures on the party’s right to quit, which eventually led to the creation of the Social Democratic Party (SDP) which eventually merged with the Liberals.]
In spite of its radical rhetoric, the Wembley Conference decision does not put the Labour Party on a real alternative course of action. “Peace, Jobs and Freedom” is a recipe for the better and more efficient management of capitalism. Its “socialism” is that of the parliamentary road with all the pitfalls and tragedies (witness Chile in 1973) which lie along its path. As Marx put it, to repeat history once is tragic, but do it a second time is mere farce. If Wembley starts the brave new world with its “people’s capitalism”, what lies ahead for the working class and whither the Labour Party?
The Wembley Conference decision was based in large part on the TUC’s plan for the British economy known as the Alternative Economic Strategy (AES)  and it is to this that we now turn, because to understand how the trade unions see this version of a people’s capitalism, is to a large extent to evaluate how the Labour Party, once it became the governing party, would carry out its policies.
The TUC is calling for a programme on the following lines:
1. boost public spending;
2. creation of jobs now;
3. plan for industry;
4. control of imports;
5. control of prices;
6. sharing of wealth;
7. democratisation of economic and political life.
The TUC claim that if their programme was implemented the British economy would be one of growth, and full employment would eventually be realised. It can be seen that the Labour Party, at its Wembley conference, and the TUC both see the problems facing the British economy as primarily underinvestment; that is, a lack of state funds to boost the private sector and the erosion of small and large firms alike by foreign competition. The AES proposes to remedy this by increasing National Enterprise Board funding and also argues that “funds from the banks, pension funds and insurance companies must be channelled more effectively into industrial development”. In addition, the strategy calls for a “new national investment bank which should be created to take advantage of the cash generated by North Sea oil”. We have seen and heard all this before; the recipes are the same as the Industrial Reorganisation Corporation in the sixties and the NEB in the seventies. The gilt and glitter of this strategy will, when facing existing capitalist reality, very quickly end up as meagre tinkerings with the system because the AES ignores the nature of multinationals and the particular way that they control the international labour market. It ignores the fact that import controls lead to retaliation on the world market and an unreal isolation of the British working class; far from challenging the power of multinationals, it will lead to the weakening of the potential strength of trade unionists, who need to unite with their brothers and sisters in other parts of the world. The AES would leave 80% of manufacturing output in private hands.
The model presented by the AES is one of building support for the above measures by opposition to the present policies of the Government and the CBI and the channelling of support through the higher echelons of the trade unions and the parliamentary Labour Party. Whilst there is nothing revolutionary in the proposals and nothing which challenges the long term interests of capitalists, this does not mean there would not be resistance to the proposals. Much reforming legislation which few would argue had any fundamentally socialist content has been opposed by capitalists (e.g. Redundancy Payments Act, ACAS, Equal Pay Act, etc.). Glyn and Harrison demonstrate that the strategy is “fatally flawed, because it could surmount problems in the production of surplus value only by measures which would be unacceptable to capital. Capitalists would resist immediately it started to bite, and cause massive disruption, because the bulk of production would remain under their control”. Yet adherents of the AES cite this opposition as a justification of the policies, as if the definition of socialism was that which is opposed by the capitalist establishment. The economic base of capital cannot be legislated gradually out of existence using the very institutions created to ensure the continuing economic and political domination of labour by capital. The right wing policies of Thatcher’s government should not delude us into thinking that they cannot be supplanted by policies even further to the right. One of the real threats posed by the AES is that, because it cannot resolve the crisis of surplus value and thereby deliver the goods promised to the working class, it give further credence to the dictatorial right, as opposed to the bourgeois democratic right.
The fact is that these policies cannot achieve the socialist transformation that is the subjective desire of so many of their supporters. In order to achieve the vision of socialism, we will need to link those desires to the many day to day struggles in which we will, as a class, be involved via a Marxist Leninist programme of analysis and action. We do not believe that the Labour Party, which at best could develop into of radical reform, is ultimately capable of leading the working a socialist society. Our justification for the existence of a Marxist-Leninist party is that only a Marxist-Leninist organisation has wherewithal to overthrow capital and establish socialism. The struggle for socialism is the struggle for socialist consciousness. Again, we would contend that only a Marxist Leninist party is capable of winning the battle of ideas and translating those ideas into a programme of analysis which forms the basis of action. What is going on in the Labour Party today is a reflection and expression of this wider, ideological struggle of capitalism versus socialism and, because it is going on inside the mass party of the class, it is, in our view, a vital and significant stage in the development of a mass socialist consciousness. For this reason, the struggle in the Labour Party is the struggle for the class and the gains of the Left are the gains of the class.
Our argument with the Left and the policies it is advocating is not that they would in no way benefit the working class, but that measured against the criterion of achieving socialism which is, after all, what the Left claims as its goal, they fall far short. In other words, we would argue that whatever the rhetoric or the campaigning vigour of left wing social democracy, it nevertheless remains social democracy and an ideology of capitalism, and, as we have seen, has been utilised as a method of ingratiating capital to the working class.
 Tony Benn. Prospects. A statement to 1979 AUEW-TASS Conference.
 A. Sivanandan “Imperialism in the Silicon Age” Race & Class 1979. “FTZs or free export zones, or export processing zones, or industrial free zones, are colonies within Third World neo-colonies. The cheapness, plentifulness and docility of the labour force is often used as the key to enticing the multi-national companies. The commodity of labour power is given a very hard sell:
’abundance of cheap diligent labour’ S. Korea
’ample supply available’ Columbia
’the country has a labour reserve of over a million highly trainable men and women’ Sri Lanka
’921,000 workers, half under 35 – the island’s richest resource with 100,000 available for immediate training. At least 5 candidates for every job’ Puerto Rico
’untapped sources of cheap labour in the countryside’ Malaysia
speak the advertising blurbs.
“The manual dexterity of the oriental female is famous the world over. Her hands are small and she works fast with extreme care ...who, therefore, could be better qualified by nature and inheritance to contribute to the efficiency of a bench-assembly production line than the oriental girl?” So reads the epitaph of the heroine of the new world order. She can test around 3,500 chips a day and loses her sight by the age of 25. And if her eyes stand up to the strain of looking through a microscope 8 hours a day, she will experience dizziness, nausea and burns from the bonding chemicals. She has pride of place in the integrated circuit, stretching from the pleasant environs of Silicon valley, California, to the toxic assembly lines of Korea, Hong Kong, Taiwan, Thailand, Malaysia, Singapore, Indonesia, the Philippines and back home to California for final processing. The global village has finally come about. And the workers in the village are kept in line with draconian labour laws. Strikes are illegal in the majority of countries hosting FTZs and the zones are often entirely separated from the rest of the country. The Greater Colombo Economic Commission in Sri Lanka, for example, is empowered to ’grant exemption from, or modify the application of certain laws of the country.’
 Peace, Jobs and Freedom. Special Conference of the Trades Union Congress, Wembley, May 1980.
 TUC “Alternative Economic Strategy” 1980.
 Glynn & Harrison. “The British Economic Disaster”. Pluto Press 1980