In the American political system the President makes an annual speech under the title “The State of the Nation”. Since Harold Wilson became Prime Minister he has taken up this practice, only his title has become—the Nation In A State.
Despite the vagaries of the British electoral system which seldom produces a House of Commons with a composition equating to the votes cast, it was not surprising when the Labour Party won the election of October, 1964. For some time political and economic commentators had been suggesting that perhaps the Conservative Government was getting tired after 13 years in office and a new virile Labour Party under the leadership of Harold Wilson was proclaiming that it could get Britain moving again.
This time there were no phoney references to Socialism. The whole case of the Labour Party as enunciated by Wilson and company rested on the premise that they could manage the affairs of society—capitalism, that is—more efficiently than the Conservatives. Indeed the nationalisation of steel was not presented as a means to equalise the ownership of wealth, which had been alleged of previous acts of nationalisation, but purely as the way in which to increase the efficiency of the industry and its ability to supply the home market and compete abroad.
Immediately upon taking office the government was faced with problems—as if there was a time when the managers of capitalism didn't have problems—and within a month Bank Rate was raised to seven per cent for the first time since the merry days of Selwyn Lloyd. Further, Chancellor of the Exchequer Callaghan introduced import surcharges, tougher hire purchase restrictions and took the unprecedented step of announcing increases in taxation to be introduced in his forthcoming budget of April, 1965.
Whilst these measures were regretted they were blamed on the state of the economy at the time the Labour Party succeeded the Conservative government. At worst, however, they were to be short term emergency measures whilst the government prepared its plans that would revitalise the British economy.
A number of new agencies, led by the Productivity, Prices and Incomes Board, were formed under George Brown, the Deputy Prime Minister and First Secretary of State, in charge of the Department of Economic Affairs. If capitalism could be planned the machinery to do it had now been created. In the autumn of 1965 after one year in office the National Plan was produced and Mr. Brown, forgetting the lesson he should have learned from Rab Butler, was proclaiming an increase in the standard of living of 25 per cent in five years.
At the same time a number of journals and economists were no longer supporting the government and indeed were becoming critical of its handling of the economy, especially with regard to the exchange value of sterling which was saved from a crisis only by obtaining concerted support from friendly governments. They were friendly to the extent that 40 per cent of world trade is conducted through sterling and if it were devalued they would have to bear some of the loss and the probability of devaluing their own currency.
It was widely held that the economic climate would become decidedly colder during the winter of 1965. Indeed this appeared to be the opinion of the government also. Minister of Labour Gunter was to the forefront of the week-end speakers with their tale of woe as indicated by this extract reported in The Observer of 9th January, 1966: “If we cannot or will not match our productivity to our spending, then measures deflationary in character must follow and unemployment will arise.”
But so unmanageable and unplannable is capitalism that the economy did not deteriorate in the manner envisaged and Wilson was able to have an election in March 1966, and get returned with a massive majority on the slogan “You Know Labour Government Works”.
Indeed the following budget of May surprised all the professionals in not increasing taxation immediately; the new innovation of selective employment tax would not take effect until the autumn.
Even if at this stage the government thought it had the situation under control, its passage had not been without incident. Although the TUC had reluctantly and grudgingly agreed to acquiesce to the part allocated it in the government's charade, those individual unions which had tried to protect or improve the position of their members had met with open hostility from a government party spawned of the trade union movement. Mr. Aubrey Jones, the chairman of the Prices and Incomes Board with all the comfort and security of a £15,000 per year salary, was telling various groups of workers that they could not have an increase of wages until they reduced overtime and became more productive in the normal working day. The Railway workers, thinking they were more secure under the umbrella of the Cameron and Guillebaud reports accepted by a Conservative government, were told by Wilson over a glass of beer at Number Ten that they could not have the rise, despite the threat of a strike. And the seamen who actually did strike could not obtain the rise they sought. During this same period members of Parliament, doctors, senior civil servants and others obtained increases equal to the average wage of those refused.
Let there be no mistake about it; controlling capitalism is impossible. It is not only the British government that is telling its working class that they are overpaid and underworked. Germany, Japan and others which for so long have been offered as examples and targets to aim for are suffering the same troubles. The workers in those countries resort to strike action in support of their struggles and they in turn are urged by their capitalist class to return to work, not ask for higher wages and not to damage the economy.
For a long time now it has been impossible, unless you are cut off from all dissemination of news, not to be aware that the British capitalist class had problems. The balance of trade, the balance of payments and exchange value of sterling were going from weakness to weakness. And the master planners were helpless. The manner in which Wilson made his announcement before going to Moscow only helped to exacerbate the sterling crisis. And the plans, oh yes, they will always have plans, which were delayed so that they would be complete when they were announced were in fact further amended and reinterpreted for the following ten days.
Naturally those further plans brought further discussion and the opinion now hardening among the '‘experts'’ is that the latest measures would cause deflation and consequently unemployment this autumn. When announcing the measures in Parliament on July 20th Prime Minister Wilson said: “I do not think the House would consider a rise of up to two per cent (470,000) unemployment unacceptable.” At a Parliamentary Labour Party meeting of July 26th Michael Foot asked what would the government do if unemployment reached unmanageable proportions. To which Mr. Wilson replied—they had plans.
It is no part of our case that the Labour and Conservative governments fail because they are not doing the correct thing. If the Socialist Party of Great Britain was foolish enough to attempt the job of managing capitalism it, too, would fail. The vital point that the Socialist Party makes to political discussion is to point out the nature of capitalism and the reason why it can never be other than the way we know it.
Capitalism is a competitive society. Firm competes with firm, industry with industry, country with country, and eventually continent with continent. Never mind that the commodities produced satisfy some human need—and that is not always the case—the motive for production is that the person or persons who put up the original capital for the operation shall at the end receive back their money plus a profit. And the whole operation is enacted for the securing of that profit. If the market conditions are such that the rate of profit, or even the profit itself, is in doubt then production is curtailed.
The trouble with British capitalism today is that it has become senile. It may have been the front runner during an earlier period of capitalism but the nature of the commodities produced and the materials required for that production is changing and the advantage is flowing to other countries. As is often the case, the ageing and formerly successful participator is reluctant to change.
This is not to say that British capitalism is not as successful as it can be within these limitations. The idea held in common by Mr. Wilson and company directors, and usually expressed by the latter over their third pre-lunch gin and tonic, that workers are lazy and inefficient, is belied by the fact that most firms, both large and small, continually and ruthlessly examine their costs to see that they extract every globule of surplus value.
Notwithstanding all the plans, politicians and business men do not run capitalism. Rather the system pushes them around in the manner of a grotesque Punch and Judy show. Despite all the writing on today’s wall there still might not be any crisis this year. It may turn out as Mr. Wilson envisages with half a million unemployed, or, as some pessimistic economist predict, unemployed might reach a million. There is still the possibility of a crisis reaching the proportions of that suffered in the Thirties. Such is the nature of capitalism that nobody knows. Not even the planners.
On the other hand the Socialist Party does not have any plans for socialism. All we can do is to urge you to consider the idea that the productive forces of society be utilised to produce those things urgently required by men and women everywhere. The adequate satisfaction of those basic human requirements: food, clothing and shelter can never be satisfied in a world that requires bombs and bases in space. The two things are contradictory. Socialism is not a Utopia, and when we achieve it that will not mean the end of all problems. But the problems will be of a minor nature compared with those that confront us today. A society that produces for use can never be placed in the position of deliberately curtailing production when people are in need of those things that are no longer to be produced.
Ray Guy
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