The Prawn Cocktail Party (1998)

Book Review from the July 1998 issue of the Socialist Standard

Prawn Cocktail Party by Robin Ramsay. Vision. £9.99

The Prawn Cocktail Party is of course the Labour Party which when in opposition under John Smith and then Tony Blair organised a series of lunches and receptions in order to convince business and the City that they had nothing to fear from a Labour government. According to Ramsay, the City welcomed this as they had already begun to write off, for the time being at least, the Tory Party as a reliable instrument of their political will because of the large inward-looking Eurosceptic element within it.

Ramsay starts from the premise that “there are essentially two economies in the UK. One is the domestic, manufacturing economy and its allied services; the other consists of the City of London, its support services in the ring of shires round the capital, and some multinationals with bases and plant in the UK. Traditionally, he says (and he writes as a Labour Party member), Labour has defended manufacturing industry while the Tories have represented the City. But now:

“British politics has been stood on its head. The Conservative Party, traditionally the party of financial and overseas interests, has been replaced in that role by Labour. Instructed by its new friends in the City, Labour has become the party of financial, pre-Keynesian orthodoxy. Gordon Brown looks determined to re-enact the role of Philip Snowden in 1931—the perfect Labour Party front man for the interests of the overseas lobby”.

This explains, says Ramsay, why one of the first acts of the Labour government last year was to give the Bank of England the freedom to fix interest rates and why Gordon Brown and other Labour ministers defend the policy of allowing the pound to rise in value even though this harms exporting industries. Instead of defending the interest of manufacturing industry as it used to, Labour is now promoting the interests of the City.

To Ramsay the City is the villain of the piece. Certainly they are villainous enough, but he exaggerates when he describes a policy of high interest rates as a “racket” and a “fraud” on the grounds that banks make more profits when interest rates are high than when they are low. If, like Ramsay, you think that banks have the power to create credit out of nothing this would be true. In fact, however, banks are financial intermediaries which make their profits from lending money out at a higher rate than they pay those they borrow it from. This means that what is important for their profits is not the absolute level of interest rates but the difference between the rate charged to borrowers and the rate paid to lenders; if interest rates are high banks don’t necessarily make bigger profits since they have to pay higher rates to their depositors—in fact high bank profits are not at all incompatible with low interest rates.

So there is no basis for Ramsay’s supposition that the banks are somehow worse than manufacturing businesses and that we should therefore support the latter against the former. Since both derive their profits from the surplus value produced by the workers and since it is the capitalist system as a whole that is the cause of our problems, why should we support the manufacturing capitalists against the financial capitalists?

Adam Buick

Secret history of secrecy (1996)

Book Review from the October 1996 issue of the Socialist Standard

Lobster special issue The Clandestine Caucus by Robin Ramsay £5.

This is an interesting and well-researched pamphlet into “anti-socialist campaigns and operations in the British Labour Movement since the war”. Having said this, the extent of the “anti-socialist” campaigns referred to is minimal, as what Ramsay is primarily concerned with are the manoeuvres of US and British capital against the left-wing of the Labour Party and the misnamed Communist Party of Great Britain. He claims that “the history of Britain’s union and labour movement is one of continuous conflict between socialist and anti-socialist wings”. But what is generally meant by this is the conflict between open supporters of the interests of the British capitalist class (from Bevin to Blair) and those who fancy themselves as a new ruling elite presiding over a system of state-run capitalism (the various radical poseurs and Leninists who make up the British Left).

The accounts of the involvement of the British and US security services in the British trade union movement are fascinating and Ramsay lifts the lid on a whole range of techniques used to shackle genuine trade union militancy and democracy, detailing the organisations set up by British and US capital with the aim of combating working-class self-activity. The ways in which the capitalist class manoeuvres on both a national and international level to ensure its political and economic hegemony is a difficult subject to approach given the highly secretive nature of many of its organisations, but Ramsay does a good job without ever giving in to the temptations posed by far-flung conspiracy theories. It is possible to develop an educated guess at the agendas of clandestine bourgeois outfits like the Bilderberg Group and the Pinay Circle, but Ramsay is more concerned with hard facts than speculation—and the evidence he uncovers is worrying enough.

There is a small slip on page 16, where one trade union militant is described as being “an active and anti-Stalinist member of the Socialist Party of Great Britain”. This could well be taken to mean that there could be such a thing asa Stalinist member of the Socialist Party, which—given our opposition to vanguard politics and dictatorship in all its forms—is of course ridiculous.

Dave Perrin