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Nigel Harris

Daydreaming about ‘our’ Britain

(February 1981)

From Socialist Review, 16 February-13 March 1981: 2, pp.26-27.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Control Imports Now!
TGWU Research booklet (based on a Special Discussion Conference of the Transport and General Workers Union, April 1980)
TGWU, London, August 1980, 52 pp., 50p.

Textiles and Clothing, the fight for survival
Transport and General Workers’ Union, London, June 1980, 16pp.

Import Controls Now!
A policy statement by TASS, the union which fights for British engineering
TASS, London, n.d., m 50p.

‘A “restoration of industry”, of which the utopians of capitalism dream, is impossible. The only escape is for the lower links of the system, the basic productive power of capitalist society, the working class, to take a dominating position in the organisation of social labour. In other words: only the building of communism is the precondition for a rebirth of society.’
(N. Bukharin, Economics of the Transformation Period, Moscow 1920)

The trade union campaign for the introduction of import controls has produced three pamphlets to outline the case. All three are well produced and well documented. They will no doubt supply the ammunition for arguments throughout the labour movement – or at least, at those rare points where there is argument on such questions. For generally, the case for import controls wins by default. The gale of unemployment seems so fierce, people clutch at any straw if it seems to offer hope.

It would be useful to outline the arguments presented in the three pamphlets. But on the main issue, there is none. The main TGWU contribution does not seek to prove that the cause of decline of some British manufacturing is increased imports. It assumes it, and offers by way of illustration impressive sets of figures on industrial decline and increasing imports. But where is the causal connection?

The argument about import controls is not settled by gut reactions. It is in part a question of science. We need a fuller picture of British capitalism if we are to discover what is wrong. We need, at least, to see whether there are industries which have not declined despite increasing imports, and industries which have declined but without any increase in imports. After all, there are still some seven million people in Britain employed in manufacturing, and British capitalism is still among the top half dozen exporting countries of the world (out of over 150 countries). Indeed, 1980 saw a startling surplus on the balance of trade, caused largely by declining imports! The TGWU case makes it sound as though there is scarcely any manufacturing left, and Britain is down with Tanzania or Bolivia in the world capitalist pecking order.

All three pamphlets present a cast of curious characters – ‘our export performance’, ‘our industry’, ‘our rate of growth’, ‘our main competitors’, ‘our balance of payments’, etc. Perhaps some of the readers will wonder who this ‘our’ refers to. The case is not argued in any of the pamphlets, but it seems to suggest that British capitalism belongs to the British people, not to British capital. Indeed, the employers are somehow marginal to it all.

The TGWU goes further, arguing that it has a better perception of the interests of British capitalism than the capitalists themselves. It quotes with approval the appeal of the TGWU general secretary, Moss Evans, to the employers, the CBI:

‘The CBI ought to end its silence and represent the interests of its members properly ... If they do not respond, and if it becomes necessary for an initiative to come from the unions, for us to forge direct links with employers’ associations against the government, then we will do it.’

Both of the main pamphlets admit something other than imports may be wrong with manufacturing. But in tackling this other factor, they are gravely jeopardising the possibility of the alliance with the CBI. The TGWU speaks of the need to expand the economy and ‘to adopt tough socialist economic policies aimed at planning the massive companies who control our industry and trading activities, and the financial overlords whose grip on the economy remains as supreme as ever’. Fighting talk, but the point disappears after one mention; there is no elaboration in the headlong rush to indict the rotten foreigners and their rotten exports to Britain.

TASS is much more sophisticated. It half recognises that import controls on their own mean nothing except propping up the profits of the most backward sectors of British capitalism. It admits investment has been inadequate and that import controls if anything but temporary, would dangerously protect the inefficient. So import controls are only a temporary respite for manufacturing while the government vastly expands the public sector to expand the economy to full employment, bullies and bribes businessmen to increase investment, and clips the wings of the multinationals. Expansion, TASS agrees, would entail an increase in imports (the TGWU must blanch at this admission), and this would make it possible to protect third world exporters to Britain and not to hit other exporters to Britain too hard, so warding off the possibility that they would retaliate by closing their markets to British exports.

On the face of it, it seems a plausible case: the restoration of British capitalism without a revolution. Doubt begins with bits of the case which are clearly specious. For example, the expansion of the public sector is possible without increasing taxation because expansion would ‘pay for itself’ – that is, the revenue the state would employ to expand would come as the result of expansion! Or again, the United States and the rest would not retaliate against British import controls because ‘they’ (i.e. the rest of the world) export more to Britain than Britain exports to them; but since Britain’s share in, for example, US total imports is small, the US could retaliate with impunity, if for no other reason than to warn all the others not to copy Britain (in 1980 there were some important examples of actual or threatened retaliations – with Indonesia, Australia and the US). Or again, prices would not rise with import controls – TASS quotes the Cambridge Economic Policy Group in support – because industry would expand, there would be increasing returns to scale and. costs would fall; this is as charming a bit of nonsense as you might find, for prices are not governed by costs but by competition, and if you exclude foreign competition (imports) then you give British capitalists the advantage of a local monopoly and of monopoly prices.

These oddities apart, it is most strange that neither pamphlet discusses the burning issue of the hour – worldwide slump. It is thus possible to discuss British problems as if they were fairly unique, and to suggest that this bit of a world system could expand in isolation, independently of the rest.

Lessons from the past

There are fairly few examples of the independent expansion of a national bit in a slump; three come to mind – in the 1930s, the Soviet Union and Nazi Germany, and currently a handful of backward countries. They are awkward examples. The Soviet Union expanded on the basis of a relatively backward economy with fully nationalised means of production – an example to alarm poor Moss Evans. Germany did it by robbing Eastern Europe and subordinating all to the drive to war. TASS wants to cut defence spending. And the contemporary ‘Newly Industrialising Countries’ have done it so far with a relatively very small industrial base and very low wages – again not a set of ideas the trade union leaders can be seen to embrace publicly.

However, the lack of a concrete example of independent capitalist expansion in the midst of world slump does not invalidate the case. But it highlights another important evasion: capitalism itself. Everyone knows capital responds to different profit rates. At the moment, as the TGWU rushes to offer support to capital, large lumps of it are fleeing the country. This is not merely the mysterious evil, multinational capital; it includes thousands of little British capitalists, moving finance into US or Japanese bonds. It is not because the British food or climate is poor, nor because British workers are stroppy – would that they were – nor because they are paid too much (British wages are now the lowest per hour of any advanced industrial country), nor because capital is irrational. The TGWU – like the National Front – is fond of presenting the British as kindly dodos, and foreigners as sharp crooks.

It is because the profit rate is – and in the past has been – lower than many other places in the world. A cumulative failure to invest is the result so lowering the capital per worker, lowering productivity and creating poorly produced goods at relatively higher prices. The whole problem is now made extreme by world slump, much fiercer resulting competition, and an oil-buoyant pound sterling.

So anyone concerned to restore British capitalism must direct their attention not to imports which are merely the result of this process, but to the causes of low profit rates. Indeed, people who identify imports as the problem are not merely looking at the consequences rather than the causes, they are positively diverting attention from the real causes and thereby protecting the position of capital.

And if we look to the question of how profit rates are to be increased – so that investment increases, so that productivity here can be used to smash foreign manufacturing with cheap British goods – an unprejudiced observer cannot fail to be impressed with the efforts of Mrs Thatcher! Here she is, slashing the labour force, cutting public expenditure, keeping the pound high to hammer British capitalists into efficiency, all so that in the end capital will stay put here or be attracted in by higher relative profits. Of course, you might rightly doubt whether her gamble will in the end succeed, but for capital it is certainly the best option currently on offer.

By comparison, the import controllers appear as utopian daydreamers. For there is no ‘British’ capital, no ‘British’ manufacturing. There is capital, some of which has a relationship with this island which entails that, if profits are tolerable, it will stay. Manufacturing is an international creature, linking production in many different countries – so-called ‘British’ exports are merely the processed results of ‘British’ imports, themselves partly the result of earlier ‘British’ exports, and so on.

Again, this is not just the internal transactions of multinationals, ‘selling Britain short’. Every little Birmingham widget maker depends on imports to manufacture, and sends widgets to Germany or elsewhere for further manufacture. That is why, as imports rise, so do exports – they are both merely part of a continuous production line spanning countries. In modern advanced capitalism, only reactionaries dream of tearing one part of a continuous line out of the process and proclaiming it ‘Britain’. They hold only the bleeding limb of a body that remains ‘abroad’.

This is why the main source of increasing imports is not the foolish addiction of British consumers to foreign-made goods, but British manufacturers searching to lower their costs by finding the cheapest inputs. The TGWU want workers to inspect all factory inputs to start a witch-hunt against foreign goods (themselves involving British exports at an earlier stage!)

‘The TGWU must take the initiative, through the collective bargaining machinery, and, look at raw materials, equipment, components. The employer must be made to sit down and talk about finding substitutes for imports.’

But this is daydreaming. It is the price and quality of the input which is decisive, not the last country of origin. British Steel Corporation wants to cut its losses – by using Australian coal which is far cheaper than British.

British Leyland wants to cut car prices and must do so to survive, so it needs to import ‘foreign’ steel. Meanwhile, the National Coal Board invests in South Australian coal mines. Rhetoric – even an earnest shop steward with a glint in the eyes – is not going to prevent capital trying to prevent its bankruptcy.

Reformist Nationalism

All three pamphlets thus dodge the central issue. Import controls, on most reasonable grounds, will increase unemployment and cut real wages. The ‘alternative economic case’ escapes the problem by conjuring up ‘economic expansion’ in the midst of world shimp. But if capitalism can be manipulated into boom by the activity of socialists, why the socialists are so powerful they might as well abolish it.

If the perspective is so unrealistic, surely it doesn’t matter? It matters not because the economic strategy can work – it cannot – but because it increases loyalty to the existing ruling class; it encourages chauvinism and class collaboration. Mrs Thatcher needs British nationalism as the sedative to keep workers quiet so that capital can be as international as it likes. She needs nationalism, but not the catastrophe of full blooded import controls. The trade union response ought to be, not a retreat into the British slit-trench, mouthing the reactionary slogans of the last decaying segments of the most backward British capital; but pursuing capital wherever it goes, building an international workers challenge from which it cannot escape.

That is part of revolutionary politics, not reformist nationalism. If that were the position, Moss Evans would have to stop muttering darkly about ‘greater social control’ – using socialist rhetoric as a threat to improve a weak bargaining position – and start talking boldly about the expropriation of capital. But then that would upturn the applecart, make impossible the tact and politeness required for an alliance with capital.

Neither Moss Evans nor Ken Gill (who introduces the TASS pamphlet) want a revolution. They want only stable and prosperous trade unions within a stable and prosperous capitalism. They want things to stay as they are and workers to be content – or, as Moss Evans puts it, ‘social harmony’. Socialists however ought never to want things to stay as they are.

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