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From Militant, No. 402, 21 April 1978, p. 6.
Transcribed by Iain Dalton.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Denis Healey said that the “first purpose” of his Budget was to “get unemployment moving significantly down.” This is most unlikely to happen this year even on his own figures, and for the longer term he contented himself with platitudes about the industrial strategy and the need for world expansion.
Recent White Papers on Public Spending and North Sea Oil (Militants, Nos. 398 and 400) show that the government has no strategy for eliminating unemployment.
The Cambridge Economic Policy Group’s recent Review
has now come up with the chilly prediction that, if present policies
are continued, unemployment will rise towards five million by
1990. In fact you don’t need their elaborate computer model to
reach that figure if you assume that unemployment will continue to
rise at the recent rate of nearly 250,000 a year.
The Group suggests that a 50% increase in manufacturing investment is necessary to avoid mass unemployment. But it is absolutely wrong to suggest that it is impossible to employ more workers in manufacturing without an investment boom. Hundreds of thousands more workers could be employed in existing manufacturing plant, if only it were profitable to do so.
The industrial areas are littered with empty factories and idle machines. Much of it may be old and inefficient but it could still produce socially useful things. In the context of a socialist plan, based on social need rather than profit, full employment would not have to await an investment boom.
But granting that higher investment is desirable to raise efficiency, how could new investment, plus rapid expansion, be achieved? The Cambridge Group quite rightly points out that large scale closures of factories, as in shipbuilding and electrical engineering, have not brought recovery to those industries; nor have government handouts.
But they conclude:
“In our view, there is no possibility of carrying through such a programme without protection by means of import controls or other means of discriminating in favour of home industries, because this alone will provide an assurance that new capacity can be operated at a high level of utilisation.”
As to whether the capitalists would really modernise, the Group
just puts its faith in ‘financial incentives or controls’ (type
unspecified, planning agreements perhaps), ignoring the fact that in
the past the capitalists have reacted to protection by complacency
and profiteering rather than expansion and modernisation.
But what of retaliation, which the Cambridge Group regards as the one ‘really serious’ objection to import controls? All they say is that if the refusal of other capitalist governments to “sanction import restrictions is the major obstacle to industrial and economic recovery in Britain, this should be made plain and the matter argued out on that basis.”
This is just about as helpful as bluntly telling the Scottish fans that their team won’t win the World Cup because the other sides won’t agree to hop about on the field on one leg!
The failure of the Cambridge Group to face up to the reality of the capitalist world system is strikingly revealed in the chapter by Francis Cripps, adviser to Tony Benn. He proposes not simply import controls, but discriminatory controls against the strong countries – precisely those best able to retaliate.
So the Brazilian, Dutch and German teams are supposed to accept being confined to hopping all the more readily as that handicap would be restricted to those teams the Scots know they couldn’t beat anyway!
As The Economist (1 April) sourly notes, the Cambridge Group do not “notice that every controlled import is a lost job in the exporting country. And then it, too, could control its imports. As the process spreads, balance of payments constraints would melt away. Along with much else.”
Unlike most capitalist economists, they see that the capitalist system, uncontrolled, means mass unemployment. They are quite right to hammer the government’s complacency. But their own policy of import controls is a fantasy, not a magic solution of a new Keynes as Brian Sedgemore suggests (New Society, 8 April).
What the Cambridge Group, and Brian Sedgemore, cannot admit is that it is impossible to control the capitalist system – other than by replacing it with a socialist plan.
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Last updated: 29 October 2016