From the December 2015 issue of the Socialist Standard
Whilst John McDonnell might put 'generally fermenting the overthrow of capitalism' as his interest in his Who’s Who entry, sadly that isn’t enough to make a socialist of the man. It takes more than verbal flourishes to emancipate the working class. Rather than socialism, his talk is of working in partnership with enterprise and business to ensure economic growth, as in his Labour conference speech. Whilst we hear promises of nationalisation of the railways and possibly even some utilities, it seems this state ownership stops short of the real productive capacity of the country. But what is this state ownership anyway? Will rail travel be free once the crony capitalists are ousted and denied their bonuses? Hardly. The likelihood is that the railways will simply be a business run by agents of the government and probably on some form of commercial basis.
But what has Corbyn, the great herald of the new New (or Old?) Labour himself said? Well, at the conference he said he’d be the champion of the self-employed. But in fact he didn’t say much about the economy, rather gave a kind of framing speech to provide an overall sense of his position and counter some of the accusations in the media: he loved his country; believed in open discussion; wanted more for the many not the few, etc. Not much actual flesh on the bones of this advert. The idea was that John McDonnell would open that black box, as above.
What can we charitably infer? He’ll try to tax the rich a bit more, try to make corporations pay some more tax, build some more houses and control business (certainly the utilities) a bit more. Oh, and maybe reduce tuition fees. And, oh yes, there might be some quantitative easing – printing money, to you and me – to give the economy a bit of a push, as he thinks growth is a good thing.
Does any of this ring any bells with anyone? Haven’t we been here before? Or, is this the time when they really mean it: when they will really make a difference? This brings up two questions: what makes this brand of Labour significantly different to any of the others? And, will what is on offer have any chance of really making a lasting difference?
Previous Labour governments
There have been eleven previous Labour governments. We can choose from those led by Ramsay MacDonald, Clem Atlee, Harold Wilson, and Tony Blair.
The first period, before World War Two, can be called cohabitation. The first Labour government under Ramsay MacDonald was a minority administration propped up by the Liberal Party lasting 11 months and so it's not really surprising they didn't achieve very much. In fact it was little more than what were called the Wheatley houses, which was a programme of cheap council housing. Nice but not exactly earth-shattering.
Ramsay McDonald was back in office in 1929 and this administration lasted until 1931 but again another minority government. This one vacillated about Keynesian-style measures of public works to address large-scale unemployment. However it fell apart and led to the National government which addressed the recession by means of the type of austerity that we currently see: cutting benefits and government spending to get out of recession. This man of promise called himself socialist and he ended up implementing these kinds of measures as part of that government, and was actually expelled from the Labour Party.
The Attlee period might be called 'the land fit for heroes'. This is probably regarded as the most radical and successful Labour government that was elected after World War Two. Their offer to the voters was to destroy the five ‘Giants’ of Want, Squalor, Disease, Ignorance, and Unemployment. This government was certainly committed to improving the lot of the working class. The creation of the welfare state, and rebalancing the economy to address poverty were priorities. They nationalised about 20 percent of the economy but abandoned plans to nationalise farming. However the senior staff in the nationalised industries remained in place. It was simply a case of new owners, or perhaps old wine in new bottles. There was no worker control on offer. Additionally industries nationalised were mostly those that were completely run into the ground from lack of investment and the War effort.
Trying to square the circle for this bankrupt economy with social aspirations was never going to work. Joining the Korean War did not help, and by 1950 health prescription charges appeared; so much for free cradle to grave healthcare. Then there was the formation of NATO and the nuclear weapons programme. It is worth noting that Attlee signed up to the terms of the Marshall Plan which required a large measure of the regulation for business to be removed, which is quite similar to the way in which the IMF operates today. American capitalism seldom comes without large strings attached. But give them their due, the Attlee government set up a variety of welfare structures that many of the baby boomers benefited from, and endured mostly intact until the so-called 'sweeping away of socialism' under Thatcher.
Harold Wilson's first administration was 'the acceptable face of capitalism'. Wilson was elected in 1964 with a minority government and a platform called New Britain. A second election in 1966 brought a majority administration which lasted through to 1970. Nobody really claims this regime was socialism although it did do major work on social reform: education, housing, social security and workers’ rights. But ultimately the economy faltered; which led to cuts including school milk in secondary schools (that wasn’t Thatcher), dental charges, increased National Insurance deductions, benefits not linked to average wages, prescription charges being scrapped but then reintroduced, tax allowances being cut, and a doomed programme of building cheap high-rise flats. Their attempt at playing the money markets went wrong with the devaluation crises from which the government never really recovered.
The first Wilson administration can certainly lay claim to a number of major pieces of social reform, for instance the repeal of the death penalty, decriminalisation of homosexuality, changes in the law regarding divorce, abortion and race. However this is social tinkering. It is not changing the relationship of power in any meaningful way.
Harold Wilson's next regime, which led into James Callaghan's, can be termed 'the period of walking a tight rope'. The first was in a minority administration and re-election in 1974 saw a wafer thin majority of four. This meant the government was never in a particularly powerful position and effectively its five years in office were spent riding the storm of an economic recession brought about largely by the oil price hike and the bursting of the Barber boom. Again, the major impact was a series of social tinkerings: tenancy rights, improved benefits, Sex Discrimination Act, prices commission, and workers’ rights. However the government finally ground itself out in the so-called Winter of Discontent, after borrowing from the IMF (again) led to large cuts in government expenditure.
Which brings us to Tony Blair. New Labour had set out its stall as the party of capitalism when at conference Tony Blair called for the abolition of Clause Four, probably the last vestige of anything resembling socialist intent within the Labour Party structure. In 1997 there was a pledge card provided to voters which didn't offer much in terms of radical social change – which was pretty much the overall picture of the Blair administration. They promised to cut class sizes, fast track offenders, cut NHS waiting times, reduce under 25s unemployment and have tough rules for Government spending. What was on offer was a managerial approach to capitalism: we can run it better than the Tories.
So we got the minimum wage (at a very low level) and Sure Start but we also got PFIs, Iraq, the rich got richer, and corporations got much more powerful and they also paid less tax. We were told this was a new kind of economy where boom and bust was beaten for good – but this hubris crashed in the banking crisis of 2008.
Could Corbyn be any different?
Not much of a record for eleven election victories: not much socialism anywhere in the picture. Not much of a basis to think Corbyn will make a massive impact. Has he distanced himself from all that? Apart from apologies promised for Iraq (even Blair is working on that now), it sounds very much like he’s offering a Wilson Mark 2: bits of nationalisation, taxing the rich, government spending and more welfare. Even Denis Healy, a right winger, as Chancellor offered to tax the rich until their pips squeaked. Not much of that kind of talk here.
So, will it work anyway? What Labour is trying to effect is a benign and responsible capitalism: a system where they accept there is an unequal distribution of wealth and power but where the state is enabled to act as an arbitrator and redistributor thereby minimising the impact of this inequality within certain limits. This is all the while still remaining a member of all sorts of capitalist power blocks (e.g. WTO, EU) because they want to maintain global trade. So the theory must be that while the rest of the world carries on trying to lower costs and hence wages, Britain will manage to continue trading with them and somehow maintain decent wages and conditions. Presumably, this is predicated on the notion that they will somehow be able to redistribute the excessive profits of business and have lots of internationally desirable commodities and services for sale, cheaply enough to maintain Britain's position as the sixth or seventh largest economy in the world. One wonders at what point does this wonderful government start to dismantle the financial services industry which makes a huge contribution to the economy but contributes not one iota to production?
The point is if you want a bigger economy, the last thing you are going to do is start making life too difficult for big players. You have to find some way to coexist with these capitalist enterprises, which means you have to recognise their interests in one way or another. Sure, you’ll try to curtail the egregious excesses but in reality you’ll let them get on with it in some regulatory framework or another.
We have regulatory frameworks at the moment for all sorts of things: Ofwat, Ofgen, Ofcom, Ofsted, Ofrail. Accepting that these ones are charades and that Corbyn will introduce big tough ones, the problem is that governments only last five years at most. Someone else can come in later and water them down. What has been the trajectory of the NHS since inception? What was the trajectory of the nationalised industries? All have started with great aspirations and fallen under the millstone of government funding decisions. Just a little bit of prescription charging to start with and then where do we go?
Here’s the rub, then. Even if Corbyn did manage to tame the forces of capital enough to raise the economic condition of the bottom 50 percent and similarly reduce differentials in Britain, he would not really be addressing the distribution of power. Sooner or later that power would reassert itself, particularly if there was an economic downturn. What would stop the rich choosing to take their money elsewhere or to simply sit on it? To stop the investment and the trickle down supply and whatever else? Desperate not to have them do that, there would be all sorts of concessions. What would stop the large corporations, foreign and UK, simply moving their activity overseas? Unless this remains a country friendly enough to business, business will prefer to be somewhere else.
Remember the event during the Major government called Black Friday? International currency speculators bet against the pound staying in the European Exchange Rate Mechanism (a precursor of the euro) and forced Britain out. Having a financial system which runs on credit and borrowing as Britain does, the government has to borrow money to make ends meet. We have seen the effects this circus can have on countries’ abilities to run themselves – Greece is a recent example. Unless your government is self-sufficient (as none is), sooner or later you’ll need to go to the money men and offer them a proposition that they like. Otherwise you will go without and their money will go to someone else.
Sad but true. The truth is that unless this whole approach is entirely rethought and scrapped for a better system, we’re onto a loser. How fortunate then that help is at hand: socialism. Abolishing money and the whole financial exchange mechanism means those who have large amounts of wealth and influence are suddenly deprived of all that power: they could make hats out of their bank notes for all the difference it would make. A system of production for use as determined democratically is the only way by which the working class can achieve emancipation. Jeremy Corbyn may look like a breath of fresh air but he’s as stale as the party he now leads.
Howard Pilott
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