Friday, January 17, 2020

Government works for the rich (1981)

From the January 1981 issue of the Socialist Standard

Any government which undertakes to administer the capitalist system is committed to do so in the interests of the ruling class as a whole. On the rare occasions when it is not considered to do so we can expect to see attempts made to bring it back into line. Generally speaking this is done fairly quietly, away from the public gaze, but if the soft approach is not successful, even a Tory government can have its knuckles openly rapped by its paymasters, the British capitalists.

However, despite the power they possess through their ownership of the means of life, the masters cannot quite do all that they would like. They are always looking to reduce real wages in order to increase profit margins, but have to consider the possibility of industrial action, and also to ask themselves whether the workforce could still operate sophisticated modern technology on reduced pay. For instance many US airframe companies — Boeing, Grumman and Northrop — operate non-union shops. Although this enables management to make unchallenged arbitrary decisions, these companies still have to pay high wages, especially to contract labour. They do not like to do this, but they have to in order to keep their present portion in the face of competition. Equally the capitalists would like a fairly large pool of unemployment to assist in keeping labour docile, but not if it means a decrease in productive effort. The unemployed worker is useful in curbing the wage demands of those in work, but it creates no surplus value and the dole which keeps him until he is next required is a charge on profits through taxation.

These considerations have influenced much of the domestic politics of post-war British governments — once called “Butskellism” after two Chancellors of the Exchequer, Rab Butler (Tory) and Hugh Gaitskell (Labour), who pursued almost identical policies in the early 1950s. During the period of exceptionally low unemployment which lasted, apart from a few brief intervals, until the 60s, the ruling class, while never really happy about the situation, gradually adjusted. The policy of deliberately inflating the currency ensured that the workers had to take the initiative and press for an increase in the monetary value of their wages in order to maintain their living standards.

Attacks on the “dangers” and “misuse” of trade union power also increased at this time. The theory that the Unions were “running the country” has at no time had any real basis, but clearly if they have some success in their function of defending living standards, so will the irritation of the capitalist class increase and attacks on the unions become more frequent. By the 50s it had become less common for a capitalist spokesman to openly call for an increase in unemployment, but frustration at the prevailing situation showed itself in attacks on “overmanning”, “feather bedding”, “restrictive practices” and “obtuse trade unionism”.

When thinking of how individuals, on taking office, tend to abandon their unacceptable (to the capitalists) views, attention is usually focussed on Labour Party leaders. MacDonald, Attlee, Strachey, Bevan, Wilson and others, considered “unsafe” prior to election, have in their turn followed polices approved by their masters. The play The Governor (stage, radio, television and film in turn) shows this process operating on an ex-docker who was appointed governor of a colonial island. Coming with “unacceptable” ideas, he had some initial success in small matters, for instance the food consumption at banquets was reduced. However, when a “crunch” situation developed in the form of a dock strike, he found himself in a position in which, despite earlier protestations, he saw no alternative to using armed force against workers. This kind of pressure can, however, be applied to “right wingers” also if required, and can be seen operating in the case of the present Thatcher administration. Interest groups normally among the most influential of Tory supporters are strongly criticising the government and insisting on a change in policy. The fact that this is being done so openly probably means that earlier, quieter approaches have been tried and resisted, in turn suggesting a more than usual degree of division.

Very few will need reminding of the most obvious difference between the present day and the 50s and 60s when “Butskellism” was the policy of successive governments. The effect of the present recession is more keenly felt because so many were deceived into thinking that this could not happen again. Other important changes have however taken place. To those capitalists whose wealth is bound up in North Sea oil the viability of other British industries is less important. Membership of the EEC has led some capitalists to see Europe rather than Britain as their economic unit. The City, the banks and the financial houses benefit from high interest rates and the strong pound and are always able to switch investments from the strugglers to more profitable concerns. These interests find the Thatcher policies acceptable and they are doubtless among those encouraging her to “stand firm”. They are among the keenest advocates of cuts in the workers’ living standards as they have less to fear from industrial disrutption due to strikes and lockouts.

In the Butskell days there was a widespread feeling that things could continue much as they were, with only minor modifications, and that everybody would gradually become better off. These thoughts could not of course continue into the present depression and they have been replaced by the opposite feeling — that we cannot go on indefinitely as we are, and that much more in the way of change is required. Particular frustration is expressed from the types who are forever bemoaning “the loss of the Empire” and, inevitably, “trade union dictatorship”. They are not in general even petty capitalists, consisting of a motley collection of retired colonels, hard-pressed “middle managers”, and so on. However they are almost all Conservative supporters and capitalist political parties require votes at election times. This frustration, and the feeling that changes must be made, led to support for a programme which the Tories presented as being significantly different from those previously pursued. In the United States similar tendencies have probably contributed to the election of Ronald Reagan and his entourage, who also say that they will make big changes.

Having been elected by the people who in the main wanted more “extreme policies”, it is not wholly surprising that the government claims to have attempted to carry some of them out. Unemployment had of course reached a high level already: now Thatcher says that her policies should be continued because “when recovery comes it will be a real recovery”. The real intention is to ensure that there is no return to the low unemployment of the 50s so that even at the peak of the next boom there will be enough out of work to keep British capitalism “fully competitive”.

Already we are seeing wage settlements well below price rises (“showing greater realism” is the current catchphrase), thus achieving what the previous Labour government had failed to do with their attempted 5 per cent limit. The government proposals to restrict trade union freedom of action can thus be given a lower priority. The statements that “we are determined above all to conquer inflation” are dishonest, for if the government, and many previous governments for that matter, had really wanted to tackle inflation, they could have done so by reducing the number of bank notes in circulation.

This government’s policies may be “wild” and “extreme” by recent standards but they are not as extreme, from the capitalist viewpoint, as they would have appeared it attempted twenty years ago. There are many items in the Thatcher package which British capitalists must approve, things which they have wanted to do for a long time but dare not while employment was “overfull”. The criteria which decide what is acceptable and what is extreme to the masters change with changing circumstances. But one thing remains unchanged. Capitalism, not the “moderation” or “extremism” of this or that government, is the cause of the recession and all the other problems which the system brings to us.
E. C. Edge

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