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Arne Swabeck

Three Years of the British Labor Government

(February 1948)

From Fourth International, Vol.7 No.2, March-April 1948, pp.46-51.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Since it came into power the British Labor Government has faced a series of crises. Emergency measures followed in rapid succession and mounting severity. This series of crises coincides with the increasing dissolution of the empire of which it is a part. Yet, what we have witnessed so far are merely the early ripples of the coming storm. Before long Britain will enter its inexorable social crisis.

With a Labor Government in power this may sound paradoxical. But it is not. The contradiction here is merely an apparent one, which disappears once the actual situation is properly understood. The real contradiction, inherent in the class system that still prevails in the British Isles do not disappear, however. They are not even mitigated by the Government’s crisis measures. On the contrary, they intensify and multiply.

The British workers know that they made certain gains by the strict government control and rationing of most necessities of life. For them it meant a more equitable distribution of scarce goods. But these gains arc now being negated by the basic policy pursued by the Labor Government. The latter must therefore be the starting point for any serious analysis of present day developments in England. The key to this basic policy is the nationalization program.

Beginning with the House of Commons act of October 1945, the Bank of England became national property. Thereafter followed the acts to nationalize cable and wireless communications, gas and electric utilities, and certain, basic industries such as coal and transportation.

Pattern of Nationalizations

The pattern of these nationalization acts was uniform both in regards to transfer of ownership and control of operations. In each case the former owners were royally compensated. The transactions were consummated in a manner that befits His Majesty’s Government. The securities of the former owners were exchanged for government bonds at equal face value. For the coal mines the total compensation amounts to about 600 million dollars. In transporati9n the compensation runs, into about 4 billion dollars for the railroads alone. These government bonds carry interest of from 2½ to 3 percent. On the whole this will work, out to assure the bond-holders of the same returns on their investments as before. Henceforth, however, they will collect their dividends from the Royal Exchequer, and without any risks attached.

No change is contemplated in the operation and control of the nationalized industries except that of greater efficiency and a more complete integration with the prevailing economic system as a whole. And, as could be expected, this precludes any suggestion of workers’ control of production. In fact, the Boards and Commissions set up to run the nationalized industries are staffed by the former owners and their associates. While some trade union bureaucrats are added in an effort toward “partnership” of capital and labor, the business executives remain the decisive factor. Thus, even within the nationalized sector of industry, the power of the bourgeoisie remains virtually unimpaired

It should be noted that the industries embraced in the nationalization program are not only those most essential to the post-war economic recovery. They are also those which have suffered the greatest ruination from the protracted capitalist decline and decay. Their profits also declined. In fact, these arc the very industries in which the utter inability of private capitalist economic recovery, and the utter incapacity of private capitalist management, has been the most glaringly demonstrated. They represent the weak links in the ailing economic structure which can no longer be restored by private capital. Hence the state intervenes to make the necessary investments to sustain production and the accumulation of capital.

Reactionary Aims

Such intervention has for its aim the mitigation of the ever sharpening conflict between the already established newer collective forms of production and the older property relations of individual ownership and individual appropriation. In place of the personal owner there appears the impersonal state apparatus. It assumes the obligation of converting the profits of surplus value produced by the workers into compensation for the former owners. The latter have no social function other than that of pocketing dividends, clipping coupons, and gambling on the stock exchange.

The immediate objective of this state intervention is to rationalize these particular industries so that they may provide fuel, power, transportation, etc., more efficiently and more economically for the capitalist system as a whole. Thus, in its basic essential, the nationalization program represents an effort to streamline the British capitalist economic structure.

During the period of rising capitalism state intervention of this character, state ownership of industries or utilities had certain progressive features. Now, in its decay stage, such intervention has become wholly reactionary. It tends to aid monopoly capitalism; and it serves the purposes only of maintaining capitalist relations of production as a whole.

Whatever planning takes place under this set-up occurs solely in the sense of aiding capitalist industry. It proceeds exclusively within the limits and purposes of capitalism. Naturally this precludes unified planning. A genuine planned economy is possible only after the working class has taken power and replaced the old relations of production with new relations that permit the socialisation of all economic activity.

In other words, a genuine program of socialism would have to proceed from the nationalization of all property in the basic means of production. It would have to aim for the establishment of workers’ control of production. What is now being carried into life in England is not such a program. It is rather an experiment in stale capitalism. Viewed from its long range perspective the Labor Government’s nationalization policy represents an effort to arrest the process of crises and disintegration of the old order: an attempt to repair its decay and achieve a measure of stabilization in order to prevent the emergence of real socialism. It is the direct opposite of a program of transition to socialism. Moreover, in the present day relationship of class forces, it becomes a means whereby capitalism retains power.

Basic Class Relations Bolstered

Engels laid considerable emphasis on conclusions reached already in his time that conversion into state property does not do away with the capitalistic nature of the productive forces:

“The modern state,” he said, “no matter what its form, is essentially a capitalist machine, the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more, does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage workers – proletarians. The capitalist relation is not done away with. It is rather brought to a head.”

Relations of property and production are, of course, decisive in modern society. But they are decisive only within the totality of developments, and not merely insofar as concerns certain sectors of economy. Essentially, therefore, this very limited and partial nationalization does not represent a change in the social nature of the country. Social relations remain as they were. And, what is more important, the conditions out of which the class struggle arises remain basically unchanged.

Does the modern state, described by Engels, include the present British variant presided over by the Labor Government? It most certainly does.

In general the nature of the state derives from its structure, which is determined by the production relations on which it is based. A mere change of cabinet members does not change the nature of the state. Labor members have taken the places formerly occupied by Tories. But throughout the state apparatus, the governmental departments, the diplomatic corps, the judiciary, the police and military forces, the personnel has remained essentially as before. Nothing is altered qualitatively. Governmental policy is formulated, executed and motivated on the same basic considerations as before. Foreign policy remains imperialistic, in conformity with internal capitalist needs.

Verification comes from no less an authentic source than the Conservative Party. Its recently adopted Industrial Charter declares in favor of retaining practically all of the enacted nationalization measures. But these Tories emphatically reject any state intervention beyond this. They oppose nationalization of steel. That is still a very profitable industry. By the same token their reason for supporting the present status becomes obvious. The Tories have been assured that the nationalization measures, so far, imply no threat to the power of the bourgeoisie.

Increased Exploitation

Once the role and position of the Labor Government is clearly understood its attitude to the working class should not cause any surprise. That attitude flows entirely from the position it occupies and from the role it has accepted. The interests of the working class are being subordinated completely to the efforts for capitalist recovery. Not only that, but the burden of the whole economic breakdown and crisis is placed entirely on the shoulders of the workers. The government’s labor policy is keyed to its persistent demand for increased production. Wage policy is tied directly to labor productivity in callous disregard of the fact that the latter is determined primarily by technological development. Here the government’s maxim is as cruel as it is simple: wage increases only on the basis of a proportional increase in production. Working hours are similarly tied to the interest of capitalist production. Shortly after its inauguration the government resisted fiercely the strike of the London haulage workers for a reduction of the work week from 44 hours to 40 hours. From the Yorkshire miners it demanded last summer the performance of an extra “stint” – cutting two extra feet of coal daily. The government now demands an increase in working hours in order to step-up production. Similarly measures are being worked out to reimpose wartime controls over the engagement of labor.

Within the nationalized industries, saddled with a crippling burden of exorbitant compensation and expensive management set-ups, the revenues must come out of surplus value produced by the workers. There is no other source from which they can be obtained. To the workers this means more speed-up, greater intensity of exploitation under more severe austerity, and a generally reduced standard of living.

The crucial question of which class benefits from the nationalizations is here made singularly clear. It shows in whose interest the Labor Government rules. Yet insult is heaped upon injury. Cynically mocking its own class origin, the Labor Government advances its program in the name of socialism. That is perhaps the greatest of its crimes.

A yawning abyss remains between the needs of British economy and the policies pursued by the Labor Government. This abyss grows catastrophic in relation to the needs of the people.

The profit motive has become the greatest barrier to the further development of the material forces of production. Nationalization acts and emergency measures have not in reality eliminated or even reduced this barrier. Hence the constantly growing conflict between the material forces of production and the property relations within which they are at work. Neither the needs of the people, nor the needs of a stable economy, can be satisfied by production for profit.

How Government Policy Works

For example, when last August the Labor Government presented its new program of fresh austerities it faced a deficit in the balance of foreign payments at the rate of about two and a half billion dollars annually. The American loan was almost exhausted. Imperialist commitments still absorbed about 1,400,000 men tied up in the armed forces at an annual expense of over three billion dollars. Besides, more than a half million workers, sorely needed elsewhere, were wasted in armaments production. The government proposed, and carried through, drastic cuts in imports and in capital expansion. These affected the most essential mass needs – food, clothing and shelter. As a result the diminished food ration has dropped below an average of 2700 calories, admittedly insufficient for working people. The housing program, already far too skimpy for a bombed-out population, suffered a cut of $800,000,000. From the military burden, however, relief was offered only to the extent of a token cut of 80,000 men. Indirect taxes were increased, hitting the work-

ing class income heavily, while a capital levy was rejected. The government, on the other hand, made appeals for a 50 percent increase of exports without any provisions for its attainment, except to demand longer working hours from an already ill fed, ill clothed and ill housed working class. And, needless to say, it proposed to increase the sales of goods abroad at the prevailing handsome rate of profits to British capitalists. Those in control of industry and commerce were asked politely by His Majesty’s Prime Minister only to “refrain from declaring high dividends.”

The Export Drive Panacea

But the very problem of exports is the government’s Achilles’ heel. Export to whom? Empire nations hitherto used to send raw materials for processing to Britain. They are now themselves taking care of their own processing on an increasing scale. And, above all, in every corner of the world market there rises the terrifying specter of ever more aggressive American competition. In several instances already export production plans have had to be altered because of this growing competition. Commenting on this very problem of exports Sir Stafford Cripps recently conceded the danger of a “descent into a spiral of depression.”

The Labor Government is now looking hopefully to the Marshall Plan. An analysis of such prospects would go beyond the scope of this article. Suffice it to say that so far as the British Labor Government is concerned its contradictions are bound to increase rather than diminish when this plan actually gets into operation. Through former Under Secretary of State, William Clayton, Wall Street has already let it be known that relief from the United States would imply no further nationalization, longer working hours and reduced real wages. The implication here cannot be misunderstood.

At the same time there need be no doubt that the more the British bourgeoisie succumbs to the overwhelming American economic preponderance the greater will be its fury against its own working class. At the expense of the latter it will attempt to extract compensation for its diminishing ration of the world economy. And the target of that fury will include the Labor Party itself.

Precarious Position Of Attlee Government

The Labor Party was carried into power by a mighty working class surge stimulated and inspired by the demand for socialism “in our time.” Once the Labor leaders were in power they were faced with the implications of their victory. Either they had to draw revolutionary conclusions from their mandate – for there is no other road to socialism “in our time” – or else frankly serve the capitalist state in which they found themselves at the helm. Of course, they chose the latter. Now the Attlee Government is caught between this mass upsurge and the rising resistance and sabotage of the bourgeoisie, backed by Wall Street. At the outset the government pursued its nationalization program aggressively. It took some steps toward social reform. Soon it began to retreat. Under bourgeois pressure this retreat continues. Action toward nationalization of the steel industry has now been shelved. But this will not satisfy the bourgeoisie. Meanwhile, the fraudulent pretensions about socialism confuse and disorient the workers. Workers disappointments in the government’s program, their confusion and discontent begin to reflect themselves in apathy and diminishing support for Labor candidates.

Truly the contradiction between the working class demand for socialism and the deeply ingrained Fabian conservatism of the Labor Party tops has reached catastrophic proportions.

Growing nervousness among this top circle is becoming increasingly manifest. It arises out of this contradiction which has already resulted in a large scale-left wing formation. So far this left wing is confined primarily to the Labor Party parliamentary fraction. It is still rather amorphous, heterogeneous, and lacks the principled leadership necessary for an intransigent struggle against the betrayal of the old leaders. But the process is only beginning.

This nervousness is paralleled among Tory top circles. Churchill gave expression to it last August when the left wing revolt within the Labor Party parliamentary fraction reached a high point. Churchill praised the cabinet members as men of “experience and self-restraint.” But, he said, they might be overthrown in their own party. This is the spectre haunting the Tories, the fear of further leftward developments – developments toward revolutionary action.

Growth of Left Wing

This fear is felt most acutely by the leaders of the Labor Party, whose contact with elements of revolt is far more direct. And, it is well founded. It would be the greatest mistake to underestimate the real importance of this present left wing development. There is sufficient evidence of its spread among the lower units of the Labor Party. Its general programmatic level can perhaps be best judged by the composite resolutions submitted to the last annual Labor Party conference. One of these resolution deplored British support in the UN for the Truman Doctrine – which was viewed as a declaration of war on European socialism – and demanded the withdrawal of British troops from Greece. Another resolution voiced a critical attitude to British “subservience to capitalist America” and demanded closer cooperation with Soviet Russia. A third demanded reduction of the armed forces “considerably below” government proposals. A fourth demanded stronger representation of workers in controlling nationalized industries. A fifth demanded government resistance to capitalist pressure hindering the socialization of German industries in the British zone of occupation. A sixth demanded equal status for the colored and white races in colonies and the swift carrying out of socialist measures in these regions. A seventh demanded democratization of the educational system. An eighth demanded equal pay for women in government jobs. Lastly a resolution demanded democratization of the armed forces.

The Labor Party itself is the British working class in political action. Its emergence was described by Trotsky as “a priceless historical achievement, which even now can never be nullified.”. Relations between the Labor Party and the trade unions are thoroughly coordinated. Jointly the two form an almost ideal combination for political action, and economic organization. It is true that the Labor Party now operates on a purely parliamentary plane, it is equally true that the more decisive actions and struggles occur outside of parliament and ensue in the main from the economic conflict between capital and labor. Parliamentary activities, realistically conceived, should be supplementary to the latter. Yet the problems and actions of both organizations, regardless of the field in which these occur, become constantly more political in nature.

For the Labor Party is now the main focussing point. It is the governing party. Issues of the highest social and political order must be delineated and fought out within its ranks. And it is important not merely in relation to the present political actions, but even more so, in relation to the ideological development of the British working class. It is thus an ideal arena of struggle for conscious revolutionists.

Today the combination of the Labor Party and the trade unions appears in its most truncated form. It asserts itself primarily in bureaucratic collusion at top levels. The trade union lead-ship is integrated ever more with the political state. Its task is to hold the rank and file in check, to assure submission to the government program of loading the burden of the crisis onto the broad backs of the workers. Its task is to function as the political police depriving the unionr. of their independence for the benefit of the capitalist state. Hence, as already noted, worker resistance finds an outlet mostly through unauthorized strikes in defiance of the bureaucratic leadership. A certain parallel can be drawn between the revolts in the Labor Party and in the trade unions. These revolts can be expected to increase in both organizations as the left wing takes on more definite form and content. But possibilities for success depend upon a closer interrelation and coordination of these developments: All the more reason for conscious revolutionists to be active in both the Labor Party and the trade unions.

A New Coalition Government?

The Labor Party leaders’ fear of further leftward developments gives rise to rumors at each recurrent crisis of a possible return to a coalition government. This may seem paradoxical in view of the party’s great preponderance in the last elections. But it is precisely this preponderance which nourishes the fear for a working class conscious of its strength aims to utilize it.

In stemming mass action, the hopelessly conservative top leaders have displayed time and again their feeling of greater comfort by direct collaboration with the bourgeoisie. Thus parallel with the growth of their fears increase their retreats and capitulations to the bourgeoisie. Politics engender its own inescapable logic. Once these leaders have said A, they also must say B. One such retreat leads inexorably to another, and by its very logic to a return of coalition.

However, that means precipitating a split in the Labor Party: A prospect that is not too remote even without a return to coalition. In any event, they would not be capable of splitting the working class forces. They could only reenact the inglorious 1931 walkout of Ramsay MacDonald and h i s faithful ten, from which the Labor Party would draw new strength.

For the mighty working class up surge, which lifted the Labor Party to power, will hardly “recede respectfully.” The working class strove toward a definite objective; and it will eventually insist on reaching that objective. It will do that confident of its strength. The working class knows it created the Labor Party and carried it to its election victory on a program of “Socialism in our time.” The working class expects actions and results. If this cannot be attained under the present leadership the working class will throw it into discard and create a new one.

Toward a Showdown

As Engels predicted, conversion into state property only brings the capitalist production relations to a head:

“But brought to a head,” he added, “it topples over. State ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that change ... And this can only come about by society openly and directly taking possession of the productive forces which have outgrown all control except that of society as a whole.”

It is in this sense that the present Labor Government represents the first stage. Now left wing developments are beginning to take form, to work out a program and policies of a more definite socialist content, for the next stage.

Trotsky once said that the British working class will “very probably be obliged to replace its leadership a number of times before a party will be born which truly corresponds to the historical situation and tasks of the British proletariat.” And he added: “It will take much less time to transform the Labor Party into a revolutionary party than was required for its creation.”

The first step in this transformation is to recognize that genuine socialism, the socialization of all economic activity, cannot be achieved without a revolution. No ruling class ever gave up its power without a struggle. Least of all can this be expected from the British bourgeoisie which has behind it centuries of universal banditry. Although forced to the wall by the decline of the empire, and by working class pressure, its position has not been weakened materially by the rule of the Labor Government.

But, as the failure of this Government’s attempt to find a solution to Britain’s difficulties on a capitalist basis become more clearly demonstrated, the working class will have gained a new and priceless experience. The impact of this experience, conditioned by accelerating capitalist crisis and decay, must produce within its ranks a further profound shift to the left. For what is now involved is the very existence of two classes whose interests are irreconcilably opposed and whose destiny can be settled only by a struggle to the bitter end.

Compared to the mighty host of the Labor Party the consciously revolutionary forces are still numerically small. This quantitative relationship reflects the illusions that still exist among the masses about the fraudulent pretensions of the Labor leaders. With a further shift to the left, this relationship will also change in favor of the revolutionists, when they draw for the masses the necessary conclusions of their common experience: irreconcilable opposition to the whole conservative bureaucracy, and for a new leadership committed to a genuinely socialist policy. Not only will the quantitative relationship then change, but the revolutionists will in the further process advance to stand at the head of the movement.

And what about American imperialist intervention? Will that change or reverse this process? Wall Street’s intervention may serve to retard the process, but not to alter its fundamental course.

Trotsky reminded us that:

“In the decisive struggle against the proletariat the English bourgeoisie will receive the most powerful support from the bourgeoisie of the United States, while the English proletariat will draw its strength in the first place from the working class in Europe and the subject nations in the British colonies.”

Today it is possible to add, that the British working class will draw further strength also from the American working class moving forward to a greater consciousness of its destiny.

February 1948

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