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Henry Judd

The Ideology of Gradualness

“Cold Nationalization” – or a Dynamic Socialist Policy?

(January 1951)

From The New International, Vol. XVII No. 1, January–February 1951, pp. 19–24.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

“For the first time in her history, England now finds herself in the part of a subsidized power – the part which in former times she has had played for her, now by Prussia and now by Austria.” (Bertrand de Jouvenel, Problems of Socialist England, p. 34)

The experience of the Labour Government and its related efforts to establish a unique English form of socialism is continuing, although on admittedly shaky legs. The fact that this experiment in socialist reformism takes place under unfavorable circumstances – a general world decline in which all that was formerly in Britain’s favor from an economic standpoint has turned into its opposite – is well known. Nevertheless, the effort continues and deserves the closest attention, both sympathetic and critical, from socialists everywhere.

Like any other significant social movement, the British labor regime has developed its ideologists, historians and intellectual supporters. In their works, if we examine them with care, we can find not only much serious information which will help us to evaluate the regime itself, but also indirect answers to many puzzling problems relating to the ideology, the “conception of life” held by its leaders and the more remote aims they have in mind. This work [1] of Keith Hutchison, at present an associate editor of The Nation and a former secretary of Clement Attlee, fulfills not only its author’s stated purpose, but gives us some clues into the thought processes of the labor leadership itself.

The theme of Hutchison is simplicity itself and contained in the title of his work. It is a comforting thesis – if only it were true! The decline of British capitalism is a fact recognized by all; but its actual fall has yet to be recognized by anyone (except the author). Beginning with the 1880s, and proceeding through the past six decades at a steadily growing pace, British capitalism has been undermined, sapped and weakened so thoroughly that it can no longer be considered as capitalist. With true British boldness and subtlety of thought, our author attempts to point out that this process was largely administered by the British ruling class itself – its Tory and Liberal party leaders. The famous Labor Party electoral victory in 1945 was thus “only a quickened step along a path already familiar.” So confident is the author of his thesis that in an article published in the Fall 1949 issue of The Antioch Review, he firmly contends that Britain’s two major parties, Labor and Conservative, will lose their present “class character,” and political affiliation and adherence will be based upon “temperament.” Naturally, no date is offered for this event, but with the inevitability of that gradualness which has been the ideological heart of British socialism, the construction of socialism is assured.

It is our intention to probe the question as to whether or not Hutchison, in this semi-official work, gives us any unintended insights into the nature and character of this British socialism, rather than to take up in any detail the material contained in the book itself. In passing, however, let us say that for anyone not well acquainted with the background material in the history of British labor politics and the evolution of party systems in England, much well presented material, written in an interesting and sedate fashion, is presented here.

Long before the nationalization program of the Labor government, says Hutchison, capitalism was on its way out in England. The “chief evidence” for this statement is (1) the undermining of the free-market system and (2) the redistribution of wealth by way of “... steeply graduated direct taxation and a comprehensive network of social services.” Marx did not recognize this “Fabian retreat of the British capitalist forces before the slowly advancing political and industrial armies of labor” (page xiii). By peacefully surrendering its “political monopoly” the British bourgeoisie confounded Marxism, which sees no possibility of compromise between capital and labor. As a result of this evolutionary process, “the role of the State was changed from that of neutral policeman to social worker and economic planner; it acquired specific responsibility for social security and welfare and became an agency for the redistribution of property and income” (page xiii–xiv).

To emphasize the ineluctability of this process of socialization of State and society, the author works hard at the task of fitting all events and developments in English economic, political and social history into this conception. For example, describing an eight year period of Tory government in the 1930s, Hutchison states that while this government aided the capitalist class “... to secure temporarily a larger share of the cake” (pages 224–5), this gain was accompanied by an intervention of the State in economic affairs running counter to the theory of private enterprise. “If the real test of economic efficiency is ability to make a profit in a free market,” how can we apply such a test when the market, at this time, was rigged by tariffs, doles to industry, legal restrictions on competition and “... deliberate instigation of monopoly?”

It is clear that the author has a most naive, simplified but highly convenient (for him) definition of capital. In part, his understanding of the social system of capitalism is limited to some of its classic secondary features (market, political monopoly of the bourgeoisie, etc.); in part it is based upon a complete misrepresentation of the nature of the State, and the assumption that changes in the role of the State since the 19th Century imply the steady liquidation of the old order. In brief, Hutchison has returned to a primitive Adam Smith notion of capitalism and, instead of tracing the evolution of the British capitalist structure, he has wiped away both this evolution and the structure itself by his superficial toying with definitions.

In this respect, therefore, the book cannot add to our knowledge of either the structural changes in British capitalism, nor to any effort to understand and estimate it today. This is a fault, indeed, since one of the most interesting Marxist theoretical questions today is the exact and precise nature of British society under the now five-year-old Labor regime. Hutchison has given us little or nothing to go by in any attempted analysis. On this score, the only really valuable and interesting chapter in the book (Chapter 18) is that describing the economic problems and choices which faced the Labor government when it first assumed political power. Hutchison describes the various alternative policies that might have been pursued, although correctly emphasizing that all were strictly limited by the hostile surrounding world, which made some element of “austerity” unavoidable. It should be noted, however, that the Labor government, particularly since it has obtained its second and so much less decisive mandate, has consistently pursued the more conservative and rightist alternative described by the author.

I asked the question in the beginning of this article whether it is possible to obtain any insight into the ideologic conceptions of the British labor leaders from this work, even if indirectly. Since I share the viewpoint of those who state that it is both misleading and fruitless to describe the Labor government as simply another species of “capitalist-imperialist” regime, this question is worth pursuing.

Is anything revealed about the nature of this British “socialism”? Let us see first what formal conception of socialism exists in the mind of the author and the British labor leadership. Hutchison quotes the remarks of a “left-wing” Tory MP (Quentin Hogg) who wrote in the London Times that, “We are committed to a great experiment – the creation and maintenance of a Social Democratic State.” Although a long period of preparation has been underway, this experiment is still in its early state. The Labor Party, in its 1945 victory election manifesto, was a little more specific about the content and nature of this “Social Democratic State.” At that time, its ultimate purpose was the establishment of the socialist commonwealth of Great Britain – “free, democratic, efficient, progressive, public- spirited, its resources organized in the service of the British people.” Aside from the now familiar measures of economic control (price fixing, rationing, etc.) and social welfare (housing, schools, education reform, national health service, etc.), the manifesto stated its broader and long-range objectives to be as follows: public ownership of the means of production, distribution and exchange (various industries, subsequently nationalized, were listed as “ripe” for immediate action); non-nationalized industries must meet the test of “public service”; new capital investment would be subject to government planning, and state control of credit policies would follow hard upon the nationalization of the Bank of England. As everyone knows, the substantial section of this program has been carried out.

Hutchison, stating again his thesis that the groundwork for this program had been in preparation for more than fifty years (“creeping collectivism”), announces in his work that this form of “planned economy” is nevertheless a turning point in British history because it presages a change from a society which was still essentially capitalistic, although tempered by many socialist innovations, to one basically socialist despite numerous capitalist survivals. For while most economic enterprises were still to be privately owned, the decisions of their managers on such major matters as the scale and nature of their operations, the distribution of their products, the disposal of profits, and the investment of new capital, were henceforth to be strongly influenced, and indeed often determined, by government plans rather than by market pressures.”

In pondering this description of their “new society,” as given in the words of its founders themselves, we note immediately some significant characteristics. To begin with, the inroads into both traditional and even contemporary capitalism are not only substantial, but highly significant since they touch upon all fields of the capitalist productive and distribution process: regulation of working conditions; investment and use of capital; quantity and quality of production; rate and distribution of profit, etc. On the face of it, it would be absurd to maintain stubbornly that it is a matter of the “same old capitalism” assuming some new but transparent guise, particularly in view of the surprising extent to which the Labor government has gone to make its program a reality.

But this generally recognized point only carries us to that stage in our analysis where we admit that the Labor government, five years in total power, differs fundamentally from traditional Social Democratic coalition regimes, or social democratic governments. Can we proceed further and state what kind of a regime the Labor government seeks to construct, and how it differs from the aforementioned? In the first place, it is clear that the State plays the leading role in their regime and that, when and if this State development should reach its full height, it would be an all-powerful apparatus, controlling and regulating all forms and expressions of social, political and economic life. Its economic base would be nationalization, its political expression would be that of formal and legal democracy, its social content would be that of a regulated popular welfare extending to all the realms of man’s physical and biologic needs. State, government, public agency, control, regulation, organization, nationalization, planning, economic boards, etc. – these are key words in the Labor government’s program and ideology.

Let us concretely examine one important aspect of the Labor Party’s overall program; nationalization, the means by which the economic base of the new regime is to be created. Hutchison is correct in asserting (page 254) that more time is required before we can correctly appraise the nationalization program as a whole, but in indicating his criteria for such an appraisal, he gives us a deep insight into the mind of the Labor leadership. The national boards and corporations set up over the nationalized industries cannot yet be judged for “An intricate piece of new social machinery as it comes from the designer’s hand is no more likely to be perfect than mechanical equipment embodying new principles. Only actual working experience will show, as American engineers say, what ‘the bugs’ in it are and how they can be eliminated.”

Both terminology and analogy here are illuminating. Social machinery, designer’s hand, engineers, etc. Obviously, we have here a conception of production which is thoroughly bureaucratic, imposed from above and having not the remotest grasp of the profoundly socialist concept of popular control, direction and handling of industry by the masses of workers themselves. The “Social Democratic State” system of the Laborites is thus bureaucratic at its core. The Antioch Review (Fall 1949) provides us with an interesting factual picture of the National Coal Board, which took over Britain’s basic coal industry on January 1, 1947. It gives us a portrait of Hutchison’s “social machinery” and the “designer’s hand” as well.

The National Coal Board consists of nine members, appointed by the government. This is the summit of the administrative pyramid. Below, we find eight Divisional Boards, which operate as consultative committees. In turn, the Divisional Boards stand in command over forty-eight regional areas, below which are the individual coal mines with their responsible managers. On these various hierarchical levels of control, the various departments of finance, planning, etc., are reproduced. In all, the industry now has 35,000 functionaries and administrators reaching from the mine to the National Coal Board. What consequence? “In the main ... the industry is operated, as a business, by its former managerial class, reinforced by economists, civil servants, scientists, and others brought in from outside.” (page 277)

It is astounding what little interest Hutchison pays to the workers of England, and their living institutions – unions, cooperative, etc. In his portrayal, they are given no roles beyond that of carrying out the plans and commands of the bureaucracy. In his description of nationalization, its successes and failures, they simply are not mentioned. In the concluding chapter of the book, the author acknowledges that “nothing can be done without the positive consent of the workers,” but even his formulation indicates the passive role of agreement or disagreement they are to play. Any idea of the workers commanding the situation, shaping both social and economic policy through their own institutions, etc., is an utterly foreign notion in the ideologic head of Hutchison, or the bureaucratic type for whom he writes.

It is interesting to note that in Western Germany, where the Social Democratic proposal for nationalization of industry along the British lines is bitterly opposed by the ultraconservative, Ruhr industrialist regime of Adenauer, a measure providing for a far more extensive voice of labor in the management process was proposed by the Christian Socialists and is under discussion. The New York Times aptly described it as a “cold socialization” measure, emphasizing, from another aspect, its bureaucratic, “from above” character. It would give labor a voice in plant management regarding plant conditions, business policy, production methods and a veto over all management proposals for solutions to these problems. Labor, in turn, would provide a core of “experts” to express its standpoint on all issues. The principle of “codetermination” between workers and management with respect to economic and welfare policies is established, and the law proposed states that shop councils shall have equal rights with the owners “in setting managerial questions of contracts, social welfare, production programs, purchasing and distribution.”

An interesting contrast with British nationalization, where the overthrow of individual ownership has not been followed up by the indispensable workers’ control over nationalized industry! In Western Germany, workers’ control is proposed (at least, to a greater extent than in England), without the indispensable nationalization which forms one basic element in a socialist method of production. Interestingly enough, German industrialists – citing the “State Socialism” program of Bismarck – endorse the proposed law on the grounds that major concessions must be made to labor to prevent nationalization. Actually, a combination of nationalization with the workers command; wherein both social order under which one may say the workers’ command; wherein both outward form and social content harmonize in a socialist sense.

Bonn “cold socialism” and British “cold nationalization” both belong to the category of bureaucratic social regimes. If the British labor government by its program of nationalization and social welfare has taken us many steps forward (as indeed it has), and commands our sympathetic understanding and friendly criticism (as it does), it has by its own acknowledgment and definition failed entirely in solving what must be a key issue for socialists; namely, to so raise and develop the social and socialist consciousness of the workers who support the regime that they shall become an organic part of that regime, regulating its activities through their own decisions; controlling its productive and state apparatus at all levels of decision – in a word, preparing the dissolution of the domineering State itself by learning how to execute every function and deed of that hitherto indispensable, but happily no longer required evil creation of class society.

* * *


1. The Decline and Fall of British Capitalism, by Keith Hutchison, Charles Scribner’s Sons, New York 1950, i–xiv; 274 pp.

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