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International Socialism, Winter 1963/4


Alasdair MacIntyre

Labour policy and capitalist planning


From International Socialism, No.15, Winter 1963/4, pp.5-9.
Transcribed & marked up by Einde O’Callaghan for ETOL.
Proofread by Anoma Cartwright (July 2008).


‘But of late, since Bismarck went in for state ownership of industrial establishments, a kind of spurious socialism has arisen, degenerating, now and again, into something of flunkeyism, that without more ado declares all state ownership, even of the Bismarckian sort, to be socialistic. Certainly if the taking over by the state of the tobacco industry is socialistic, then Napoleon and Metternich must be numbered among the founders of socialism.’ Engels, Socialism Utopian and Scientific.

‘But however much they do plan, however much the capitalist magnates calculate in advance the volume of production on a national and even on an international scale, and however much they systematically regulate it, we still remain under capitalism – capitalism in its new stage, it is true, but still, undoubtedly, capitalism.’ Lenin, State and Revolution.

I. The New Capitalism

From Togliatti to Wilson the cry goes up across Western Europe that socialism is now state-sponsored planning plus automation. It is sad that neither Wilson nor Togliatti is a keen student of Hegel’s dialectic; for it would be a great comfort to those who believe that opposites become one in a higher synthesis to realise that oddly enough capitalism too is now state-sponsored planning plus automation. What is the shape and what are the needs of contemporary capitalism?

Capitalism is essentially rationalistic in its approach to means, even if absolutely irrational in regard to ends. The individual firm, at first competing blindly for a share in a market whose potential is unknown and simultaneously for a share in a similarly unknown potential investment, is forced into prediction. Unsuccessful prediction entails losses. Successful prediction brings with it not only profits but an identification of the factors that need to be controlled if the unknowns of investment and the market are to be replaced by what is known. The control of these factors is of course beyond the power of the individual firm, even in the end beyond the power of the large corporation. But it is not beyond the power of the state apparatus to provide the legal controls, the financial underpinning, a variety of state enterprises and bureaucratised links between state and private enterprise, and even international agreements, which enable investment, production and the market to be planned. There is thus a natural progress from the anarchy of capitalist competition to the order of capitalist planning. Not that the progress of capitalism from anarchy to planning was in fact easy or natural. It took decades of the business cycle, crisis, stagnation and above all, war, for capitalism to make this transition.

Even then it is always made unevenly, often unwillingly, and past anarchy continually invades present planning. Nonetheless it is this capitalism which has stabilised itself in a way that the old capitalism never could, and which has stabilised itself self-consciously. This is why the sneers made at the Labour Party Conference about the Conservative Party leadership’s late conversion to planning could be misleading, as misleading as Togliatti’s approval for government regulation and intervention in Italy. Planning is not inherently alien to capitalism. How does capitalism plan? By attempting only to control the size of the flow of credit, and through that the economy, one produces the kind of cycle of inflation and disflation which occurred in Britain in the Fifties. One has also to control the direction of investment, partly by government spending and investment in state enterprise, partly through the planned investment of the large corporations. Through international banking and tariff agreements one can to some extent lessen the risks of international trade. But above all either directly or indirectly one has to integrate one’s objectives for investment, production and profits. The concept which expresses the ideal of such an integration is that of ‘over-all growth’. The instruments of this concept include the French Commission du Plan, the secretariat of the Common Market in Brussels, that of the European Iron and Steel Community, and at home, NEDC. These instruments are essentially meeting-points for different capitalist interests. It is as these different interests embody the joint decisions in their own plans, those of ICI and Unilever, of Krupps and BSA, of Renault and the National Coal Board, that capitalist planning becomes a reality.

Who plans? The corporate controllers of capital, the managers of production and the managers of investment. To be a manager in this sense is not just to do a technical job for an employer; it is not to be a superior foreman executing someone else’s decisions. The decisions in the board-rooms are rarely, if ever, controlled by the shareholder in any real sense. Even the decisions in the board-rooms are only part of a total process of decision-making in which the substance of power is widely shared and the title to a share is gained partly by ownership of private capital, and partly by membership of a managerial elite. What are the planner’s aims and needs? First of course continuous reinvestment of capital in an unbroken programme of replacement and technological modernisation. Here everything turns on a high degree of mobility in the labour force, which must be available for hiring at points of expansion and which must be expendable in declining industries. Automation entails both the continual recurrence of redundancies and the need for ever new types of technically trained manpower. We must in other words have a labour force that can be continually reshaped, expanded and contracted according to the demands of technological reinvestment.

Secondly, the planners require maximum predictability in terms of availability of resources and they must therefore be able to predict costs – and especially labour costs. They require to know in advance what the wages bill will be. They require the cooperation of unions and employers in framing an agreed long-term wages policy in which a limitation is securely placed on the growth of wages. This is why, although NEDC is a model for the new bureaucratised corporate capitalism, NIC is not. For NIC cannot get the cooperation of the unions and cannot therefore produce a planned incomes policy. It is worth pointing out that a great deal of private, old-fashioned unplanned capitalism survives alongside the new model. But it is even more important to emphasise that the new planned capitalism is still capitalism. For here we have to combat both the disciples of Crosland and the antique Left, who share the belief that the essence of capitalism resides in private ownership and control, on the one hand, and anarchic, unplanned investment and production on the other. The antique Left recognise that we still live under capitalism, and are therefore forced to deny the facts of corporate planning; Crosland has a keen eye for the facts, but is therefore forced to conclude from his premise that we no longer live under capitalism. Yet neither Crosland nor the antique-dealers were the dangerous men at the Labour Party Conference. The dangerous men were found in every wing of the party and what united them was the adoption with enthusiasm of the programme of the new capitalism as Labour’s aim. For in Britain today the principal needs of the new capitalism are clearly two-fold: an expansion of technological education and control of wages. Moreover these must be carried through in such a way as to leave the working-class as unclear as possible as to the implications of these policies. The ideal for the new capitalism is therefore precisely a Labour government with Wilson’s policies. But here at once a question arises: why did a party conference which fought Gaitskell’s right-wing reformist policies walk like a lamb behind Harold Wilson? The answer given by both Wilson’s admirers and his enemies is that Wilson is a superb political manipulator; to this the reply must be that Wilson’s record as a political manipulator up to this point makes Guy Fawkes seem a brilliant conspirator by comparison. But not only is this view of Wilson false, it is dangerously misleading. We must look not at the leader, but at the party. If we do so it becomes clear that Wilson arrived just as the party’s reformism had become finally out-dated. What Wilsonism filled was a vacuum. We must now ask how this vacuum was created. What happened to the reformism of traditional social democracy?

II. The End of Reformism

Reformism is the conviction that socialism can be achieved by the use of and participation in the existing political institutions of the liberal bourgeois state. It was the natural, although not the inevitable, horizon of the working-class in the last decades of the last century and the early years of this. One reason for this was that the political differentiation of the working-class from other classes in Western Europe entailed the creation of mass working-class parties competing for working-class allegiance with bourgeois parties; and in a situation where successful insurrection was impossible it was natural to conclude, as Engels concluded, that the increase in the parliamentary vote is the road to working-class power. It was not of course originally the case that the reformist conception of socialism, of the final goals of politics, differed substantially from that of revolutionary socialists; it was primarily a difference as to the means, a difference which in time did transform the content of reformist socialist goals. Kautsky’s career illustrates this transformation excellently.

There are however three other reasons for the rise of reformism, the occurrence of each of which separately is a necessary precondition for social democratic politics. The first lies in the social character of the working-class. A tolerably homogeneous working-class, with its own institutions, and a widespread consciousness that its aims could only be achieved politically, appears in the last decades of the last century. Its life is dominated by the facts of low wages and intermittent unemployment. Poverty defines its form of life. Only very rarely can individuals or families hope to rise from the working-class; the thesis of Victorian self-help, of the rewards of thrift and hard work, has been empirically falsified. The propagation of socialist theory has sharpened and clarified the sense that there is little or no community of interest between the working-class and the rest of society. For the working class does not benefit from the unrestrained pursuit of profit; this pursuit in fact it is precisely in the interest of the working-class to restrain. Production must be planned so that the vagaries of the trade cycle and the consequent vagaries of employment cease to occur; and it must be planned as a whole, that is there must be national ownership of the means of production.

The second precondition of social democracy is that there shall be a widespread and plausible belief that the state is, at least potentially, politically neutral as between rival classes and economic interests. The institutions of the state can be transferred from the control of the representatives of the bourgeoisie to those of the working-class. It is very easy now to castigate this belief as pure and even obvious error. But it is not only a belief to which Engels late in his life seemed to have given his sanction, it is a belief which appears to find a charter in Marx’s Inaugural Address to the First International. Moreover the working-class was able to win real victories in the form of parliamentary legislation, and for a long time the nature of classical capitalism nourished this belief in the neutral state. Classical capitalism as an economic form requires of the state principally non-intervention. The state must not itself infringe and must prevent others from infringing the freedoms of the free market, and especially the freedom to recruit, exploit and fire labour. There is more than one form of state compatible with this requirement; capitalism has flourished under parliamentary democracy, Bismarckian paternalism, Japanese hierarchical government, Nazi dictatorship, and a variety of other forms. It is natural enough therefore to envisage state and economy as somehow independent of each other, and to miss the fact that capitalism as an economic form is tolerant only to rival and alternative political forms within strict limits, the limits being set by the relations between capital and labour which capital requires.

The existence of a working-class with the kind of political aims which it had acquired and of an apparently neutral and controllable form of state in parliamentary democracies supply the obvious preconditions for a social democratic programme in which the attempt is made to eliminate unemployment and the trade cycle by planned production on a basis of national ownership and to eliminate poverty by redistributive taxation and by planned welfare. The third, and less obvious, precondition for social democracy is the existence of the kind of ruling class which is able and willing to accept the rules of the parliamentary game and with them the possible implementation of parts of the social democratic programme. The inducement to a ruling-class to do this is two-fold. First of all, the consequences of excluding the working-class from power are likely to be far more devastating to the established order than that of encouraging their parliamentary illusions. For to do this would be to assist revolutionary socialism at the expense of social democracy. Secondly it becomes increasingly clear that many social democratic measures coincide with the needs of capitalism as it discovers the increasingly severe defects of laissez-faire methods for its own purposes. There is thus a potential area of cooperation between capitalism and social democracy, which helps to assure social democracy of its parliamentary rights. Anyone who doubts this should compare Mr. Harold Macmillan’s book The Middle Way with Lord Attlee’s The Future of the Labour Party, two statements of policy about Britain in the ‘thirties. Reformism then depends upon the presence of three preconditions: a certain type of working-class, a certain type of view of the state (itself possible only if the state is of a certain kind) and a certain type of ruling class. But all three preconditions have in fact disappeared. We no longer have the same type of working-class, the same type of state or beliefs about the state, or the same type of ruling class. The working-class is far less homogeneous. The gap between workers in relatively stable employment with relatively high wages and the poor (the ill, the mentally ill, migrant labour, seasonal labour, minorities doing unskilled jobs) has enormously increased. The skilled working-class is itself divided and fragmented in all sorts of ways. What is more the goals of working-class people are not now political in the sense that they were; that is they can see no connection between getting what they want and any actual political institution. Part of the reason for this lies in the changed character of the state, which is now so well integrated with the key institutions of the capital economy, that it cannot any longer be conceived of as a neutral, independent source of power that could be used against that economy. Consequently the whole reformist programme of nationalisation and planning by the use of the existing institutions of the bourgeois state has become irrelevant. To transfer steel from ‘private’ to ‘public’ ownership would entail essentially a new set of titles for the same set of committees; the criteria of efficiency in the industry would remain the same, that is the industry would be ruled by the criteria of profitability.

Equally, as I have already argued, the ruling class has changed. They do not need to accommodate themselves to the working-class now by means of parliamentary institutions. The fundamental transactions in which class meets with class are directly economic and take place in the various institutional forms of arbitration and negotiation. These institutions absorb the reformist leadership into not merely legislating for capitalism (as the reformists used to do in parliament) but actually helping to administer it. Neo-capitalist bureaucracies can assimilate trade union bureaucrats in a way that old style capitalists never could.

In this situation therefore the traditional reformist programmes and attitudes become largely irrelevant, and under the pressure of irrelevance Left and Right reformism split even further apart than they had already done. What was originally a difference about the pace and degree of reformist activity becomes a difference of principle. Both sides recognise that traditional reformist means can never lead to traditional reformist ends. Right reformists preserve the means, but abandon the socialist goal and become in respect of the new capitalism not socialist, but liberal reformers. Left reformers preserve the ends of socialism, but become increasingly vague as to the means. Their key term tends to be ‘pressure’, which they hope to exert on a leadership that will otherwise drift to the Right. For them contemporary politics becomes a question of Harold Wilson’s intentions, of how to strengthen his socialism, or of how to replace him if it flags. But in fact Wilson’s intentions are not and cannot be sovereign. What determines the policy of the next Labour government is not primarily a matter of who leads the party. It is primarily a matter of the consciousness first of the working class and then of the party, as to how the class issues are to be defined under the new capitalism. Any policy which simply and blindly meets the needs of that capitalism, as the Scarborough policies do, cannot but be anti-socialist, however good the private intentions of the leaders.

We can now see why Wilson could succeed where Gaitskell failed. The collapse of reformism has left a policy vacuum among the traditionalists of both Right and Left, and the new capitalism has no place in their theoretical maps. Moreover the continuity between the work of the last Labour government and the shape of the new capitalism is sufficiently evident for reformist adherence to the new capitalism to be strongly reinforced.

To this explanation of Labour’s official acceptance of the new capitalism (which extends to the expressed desire to get rid of ‘the dead wood in the board rooms’) two footnotes must be added. The first is that in the new situation that that we now face a good many of our old characterisation of people and groups as Left and Right may break down. It is a period of possible realignments. We ought therefore to be insistent that what matters are the issues, not the personalities. To accept Wilsonism is to have moved over to the Right at least for the moment, no matter what other professions of socialism are made; to be prepared to understand and criticise planned capitalism is the essential first stage in a move to the Left. Journals such as Tribune, Keep Left and Union Voice will have to decide which way they are going to move.

Secondly, just as within and alongside the new planning the old capitalist anarchy can still be found, so inside the Wilsonian Labour Party there are still footholds for the old reformism, particularly in fighting defensive actions on behalf of workers in declining industries or depressed areas. But these facts do not alter the general directions of both capitalism and the official Labour leadership.

III. Socialist Policies

‘... but still, undoubtedly, capitalism.’ Lenin’s words are of fundamental import. Capital’s economic domination of labour, the drive to accumulate, the criteria of profitability, the subordination of consumption to production, all the cardinal characteristics of capitalism survive the transition from anarchy to planning. Poverty remains. The unbalance even between long-term and short-term projects (a decent transport system versus speculative property development) for growth, let alone between production for growth and production for need (almost anything versus nurses’ pay and hospital provision) exhibits itself everywhere. The subordination of consumption to production is well-marked in the reasons given for and the priorities suggested for educational expansion. We do not produce more so that our children shall have a fuller and more human education; we need more pure and applied scientists and technicians, in order that British firms may compete in the world market, and so we devise new educational programmes. Above all, the new capitalism exhibits its continuity with the old in the two realms left untouched by conventional reformist politics: the relations of capital to labour within the factory at the point of production and the relations between capitalist states in which the sanction of pure force is exhibited most nakedly. It is here that the worker does continue to experience all the pressures of capitalism in relation to his actual wants and goals: the continual frustrations of being subjected to the process of production and the continual threat of nuclear annihilation. It is at these two points that the genuine politics of class must be discovered.

If this is so, the apathy towards conventional politics, broken only when scandals or personalities can turn conventional politics into an entertainment along the lines of Z-Cars or Coronation Street, is entirely intelligible. For on the one hand we have the fact that parliament is only legislating with one eye to needs and pressures that are determined elsewhere, either by the individual decisions of the managerial class or by the objective and impersonal development of the whole shape of the new capitalism. We have the whole process of transition from parliamentary decision to cabinet decision to premier’s decision which has been traced in successive British governments by political scientists. And we have also the contentless character of a debate between parties in which each vies with the other for the possession of the slogans of neo-capitalist modernisation. On the other hand we have the exclusion from conventional politics of the substantial issues which necessarily impact on working-class experience and which necessarily define the arena of class-struggle. In this situation the discovery that many working-class people are apathetic about politics should therefore cause us neither surprise nor alarm. It would be alarming indeed if it were otherwise.

It would however be a great mistake to conclude from all this that we should therefore turn away entirely from the traditional institutions of the Labour Movement and concentrate instead only upon the rank-and-file shop-floor struggles in industry and the peace movement. For to do this would be to accept the class struggle on the terms in which the capitalist would wish us to accept it. It is precisely within the factory or within the particular industry that workers can be isolated and defeated; it is precisely insofar as they transcend these limitations and build institutions which express their life and struggle as a class that they escape the narrowness and isolation which bring about their defeat quite as much as the efforts of the employers do. But this is not advocate traditional policies of entrism or to combat traditional policies of non-entrism; both these alternatives die with the death of reformism. Capturing the Labour Party leadership is a pointless as well as a hopeless aim. What is neither pointless nor hopeless is the task of recreating a political trade unionist out of the existing links between the Labour Party and the unions. It is in building organised political support for policies for the whole class that we can do this. The policies which we need are of at least two kinds. There are first of all the policies which are directed towards the reorganisation of the working-class. Part of the urgency here derives from the fact that if the working-class is often divided and weakened by the impact of the new capitalism, it is also strengthened by the new recruits whom it receives. Just as skilled technicians become the key workers, so many groups who formerly thought of themselves wholly in terms of middle-class status are reduced to the condition of skilled technicians: teachers, insurance officials, bank clerks, and nurses. Their conditions of work force them towards trade union militancy. Their class reunion with the skilled technicians and the semi-skilled worker could mark the arrival of a more educated and aware working-class than ever before, with the possibility of more sophisticated strategies of struggle to match the new capitalist sophistication. We need to provide on the one hand agencies, staffed by skilled economists, which can inform the working-class of the over-all shape of the new capitalism and of its points of vulnerability. We need to frame wage demands based not upon what workers take home now, but upon what the industry can only just bear to give, but cannot bear not to give, in case strike action should upset its time-table of agreed objectives. The very fact that the new capitalism is planned opens up the way to new methods of disruption by an informed choice of when and where to strike. But this over-all strategy for the class will only be operable if almost every worker is able to understand and assent to this strategy, if there is a national web of democratically inclusive and democratically effective trade union institutions. And a first prerequisite for such institutions is the defence and extension of the shop stewards movement.

We have to frame these policies with an eye to the key question of which class is to have power over planning, and it is this question which has also to inform our attitude to the by now probable next Labour government. Here we have three specific political demands to make us a counter-part to our trade union programme. The first is that in the battle between employers and workers over control of wages, the Labour government must side with the workers and against the employers. The only condition on which the workers should accept controlled and limited wages should be control by workers over profits and investment. The second specific demand is that education shall be in the interests of equipping workers to control their own lives and to take power, not in the interests of allocating workers to subordinate positions of powerlessness. He we have to challenge any attempt to implement the Robbins Report at the expense of the secondary modern schools. We have to challenge any attempt to teach technical skills without giving social consciousness. We have to attack the limitations of education and welfare in the interests of arms spending, and we can infer from all that the Labour leadership have said that they are unlikely to want to diminish arms spending.

The third specific demand is the abolition of the Bomb. The abandonment of the struggle for unilateralism by almost all the Labour Left must be underlined. The commitment of the bourgeois state to force has to be brought out in terms of the truth of the axiom of all bourgeois statesmen that they can only hope to negotiate from strength. What this means is evidenced in the fact that Kennedy could only hope to make the test-ban treaty acceptable by pledging renewed arms expenditure, including renewed expenditure on nuclear weapons, to the US Senate. Every concession of a disarming kind entails by the logic of this process a counterpart in rearmament. And this is true also of the type of concession promised by Labour’s foreign policy. But we have to make the struggle against the Bomb not a series of sporadic reactions to crisis situations, but a thread which runs through all our political work. For here in the Bomb the irrationality of capitalism and its inability to control the technological powers it unlooses are permanently manifest and permanently manifest as the threat that they are.

For the interest in wages, the interest in their children’s education, and the interest in survival are permanent interests for the working-class which engage them politically as a class. A policy of trade union activity without these objectives would be narrow and confined; with them it becomes a policy which questions not merely the details of the new capitalism, but its deepest assumptions. This programme raises the question not merely of the reform of the new capitalism, but of its replacement, and it raises it both for the struggle at the point of production and for the political struggle.

IV. A Case for Optimism?

Every delay in breaking with and exposing Wilsonism does harm to the cause of promoting working-class consciousness. All the pressures towards party unity make it more urgent for the statement of an alternative attitude towards the new capitalism. I have had in setting out the arguments here to explain the case for a new sociology of capitalism and a new strategy towards capitalism with extreme brevity. In correcting what I have had to say, other comrades will also, I hope, expand it. But it is worth ending upon a note of optimism. Revolutions do not take place in fact against backgrounds of pauperisation and slump. They take place when in a period of rising expectations the established order cannot satisfy the expectations which it has been forced to bring into being. The new capitalism cannot avoid calling into being a new working-class with large horizons so far as not merely wages but also education and welfare are concerned. It equally cannot avoid controlling incomes and allotting its educated workers frustrating positions of subordination. Whether on this contradiction it will or will not founder depends in part on the forms of our present activity. It would be silly to be over-optimistic, but it may be that we are entering the first period for a long time in which over-pessimism is a greater danger for socialists.

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