Contradictions of British Capitalism

[p028] The contradictions of British capitalism THE prolonged upsurge in the capitalist world economy over the past 15 years has seen no basic alteration in the structure of British capitalism. In fact, because a number of the major capitalist countries have been modernising their industrial apparatus and growing rapidly, the comparative prosperity of these years has concealed a continued relative deterioration in Britain’s world economic position. Most of the problems of British capitalism today arise from, or are connected with, the underlying structural weakness and inflexibility of an outmoded economy. These showed themselves in the period between the wars in excess capacity, the decline of staple industries, loss of markets, industrial stagna- tion, a weakening of the international position of the pound and mass unemployment. The fact that these symptoms largely disappeared in the years after 1945 indicated no solution to the problems which had produced them. Instead these problems now showed themselves in different ways, or were completely hidden for the time being by the favourable world conditions which restored profit- ability and did therefore make possible a higher 189 by Tom Kemp rate of investment and growth than before the war. However, despite the much-vaunted acceptance by the state of responsibility for directing the economy as a whole, policy-makers have been unable or unwilling, even under these comparatively favourable conditions, to carry out the major changes and adjustments which alone could have enabled British capitalism to improve its competitive position in the capitalist world market. Rather has it continued to lose ground to more rapidly growing and dynamic rivals; advantages retained from its one-time mono- polistic position in the world economy and imperialist stranglehold on underdeveloped areas have been whittled away. Consequently, now that the world boom of capitalism seems definitely to be coming to an end, the room for manoeuvre which these initial advantages offered, while still not gone completely, has considerably narrowed down. In its new period of decline, still relative, but likely to become absolute, the employing class has no alternative to a more determined effort to increase the exploitation of the workers in Britain and in those other parts of the world—whether or not nominally independent—which fall within the circuit of exchange of British capitalism.

[p029] 190 LABOUR REVIEW—Summer 1963 The end of the boom The great investment boom of the fifties, which took off from, and is still partly sustained by, the high level of arms production made necessary by the Cold War, is now coming to an end. Repeated recessions and growing unemployment have long made this evident in North America. The signs in Europe now point the same way: towards declining investment opportunities, a lower rate of profit and consequently a slowing down in growth in produc- tion and trade.! The time may now be at hand when the economic cycle on both sides of the Atlantic will again be synchronised. The building up of new means of production, for which there was greater scope in Europe (and Japan) owing to war destruction, the general tech- nological lag and the abundance of labour power, fed the boom, which could thus go on for a decade or two without a problem of markets appearing. But the essential conditions for the continuance of this expansion have been undermined as a result of its own progress. The making good of war damage, the modernisation of the infra-structure as well as of industrial equipment, and the building up of industrial capacity are no longer likely to make such huge demands on the output of the investment goods industries (Dept. I in the Marxist terminology). The possibilities of exploiting the new post-war technologies are reaching their end. The reserves of 1. As A. R. Conant puts it, ‘evidence suggests that for the first time since the war the productive capacity of industrial countries may now exceed current and pros- pective demand: should this prove generally true, it would involve a check to the pace of expansion and perhaps eventually lead to depression’. Westminster Bank Review, Feb. 1963. The old voices of the fifties, proclaiming the indefinite extension of the boom, have been stilled for some years. labour-power are no longer available and will have to be created artificially. At the same time as investment flags and costs rise the output which is seeking a market continues to expand. The stimulus given to Western Europe by the wider market of EEC is now tapering off. On the world market the fall in primary product prices relative to those of industrial goods begins to have serious consequences which are only held in check by draughts of American economic and military ‘aid’ to the under- developed countries. Industrial enterprises through- out the capitalist world now face a struggle for turnover more intense than at any time since the war. At the same time, the profitability of new investment tends to decline. Capitalism is thus facing an inevitable pincers movement—from the side of markets and the side of profits—which arises from its own contradictions. The signs point, therefore, to a slowing down, and probably a reversal, of the expansionary trends of the recent past. The old problems will re-assert themselves and, in the new process of struggle, weaknesses will be exposed. The years ahead are likely to see, in Europe as well as in the United States, sharper and more frequent recessions which may turn into severe slumps heralded by Stock Exchange collapses. It will be a testing time for economic policy, but it is also likely to impose the need for inroads to be made into the concessions which the working class has won during the boom and for the gearing of its organisations into the machinery of the capitalist state. The understanding of the probable new turns in economic development is therefore directly relevant to the tasks of working- class leadership, baring the inadequacies and treachery of the old leaderships and revealing the need for Marxist organisation. Britain’s peculiarities Not only can British capitalism not escape the full effect of the new trends, but it also has to face the long-standing problems inherited from the past. Its situation through 1962 and 1963, despite the prevailing high level of unemployment for the post- war period, was not yet characterised by general overproduction and trade depression, nor, indeed, by a recession analogous to that of 1957-58, though some of the symptoms may be similar. The most evident strains reflect a long drawn out crisis of inadaptability in the face of rapid technological change, and a deterioration in Britain’s world economic position, which falls with special weight on the older, now declining industries and areas. The effect so far on other industries is mild and indirect; indeed, they still continue to expand and to experience conditions of relative prosperity. Until the international conditions ripen for a con- junctural crisis the palliatives so far applied by the Tory government could yield some results. On a world scale the expansion has so far not ended, it has merely been checked. It is this continued expansion which enables exports to grow and prevents severe pressure building up against sterling. But it also heightens the contrast between Britain’s merely nominal economic growth and _ general malaise and her rivals, who have behind them a number of years of rapid growth and increasing

[p030] BRITISH CAPITALISM competitive potential. If even in time of expansion the British economy stagnates, what will be its fate if a general crisis of over-production should occur? A distinction thus has to be drawn between this latter type of crisis, the conditions for which seem to have been prepared in the capitalist world economy as a whole, and the peculiar problems of the British case. These can be summed up in the unfavourable comparison between the growth of industrial production and productivity in Britain and that in her main rivals, and in her declining share in world trade in manufactures.2 Failure to modernise the industrial structure and to invest adequately in the ‘growth’ industries associated with modern technology; failure to build up the foreign 2. See the two articles on Imperialism in LABOUR REvzEw, Vol. 7, No. 2; also ‘The Course of Capitalist Development’ in LABOUR REVIEW, Vol. 6, No. 2. 191 exchange reserves to a ‘safe’ level consonant with the maintenance of sterling’s role in world finance, and thus recurrent balance of payments crisis; the anxiety of ruling circles at the apparent success of the Common Market and the belated and panic- stricken attempt to enter—these are major symptoms of the underlying problems which are in the fore- front of public discussion. But, if a distinction must be made between the classic ‘crisis’ and the special problems of Britain, they, too, arise from general characteristics of the capitalist mode of production as they have worked themselves out in particular geographical and historical conditions. In contrast to those who build their analysis exclusively on the recently-acquired characteristics of capitalism, it is necessary to look at the essential and enduring features of its mechanism without which the so-called ‘changes’ or ‘mutations’ cannot be understood. How capitalism works Capitalism lives by exploiting the working class. By its ownership of the means of production the capitalist ruling class is able, collectively, to extract a surplus from living labour power. Capitalism expands and develops as long as it is able to go on finding markets for the realisation of this surplus. That markets imply the existence of means of money payment is obvious. Capitalism produces commo- dities for sale in the market; Unless this can be done at a profit capitalism loses not only its motive for production, but also its motive for expansion. Expansion means accumulation; that is, the use of part of the surplus value for the building up of more means of production, or, to put it another way, the transformation of the living labour, represented in the surplus, into ‘congealed labour power’, or means of production. If accumulation is made possible by the extraction of surplus value, profits, it requires the expectation of an adequate return, or rate of profit, to result in this accumula- tion actually taking the form of addition to means of production, or investment. Strictly, therefore, because of the possibility that some part of the accumulation may go into money hoards which no longer participate actively in the extraction of the surplus, it does not necessarily imply expansion. Clearly, however, under capitalism there is no growth without accumulation, no accumulation unless surplus value is both extracted and realised. The result of accumulation expands the real form and the actual stock of ‘capital’ in existence. The technological conditions of production—mechanisa- tion, increase in scale—and of the market—com- petition, drive to lower costs and raise profits—tend to result in a more rapid growth in the proportionate value of constant capital to variable capital. As the surplus is extracted only from living labour power which figures as variable capital, the rate of profit thus tends to fall as the organic composition of capital rises. The tendency for the rate of profit to fall, which is expounded in the third volume of Capital, is inseparable from the operation of capitalism, even though, in practice, it is only on certain occasions that it manifests itself in an actual fall. It is through this tendency, and its counteracting forces, that we are taken by Marx to the heart of the dynamic of capitalism. But for this very reason, the whole process is of the most complex kind which permits of infinite variation in its practical working out. As a tendency, however, it is continually present in capitalist economy though frequently it is success- fully counter-acted by forces which act in the contrary direction. But these forces, however powerful they may on occasion be, are a response to the continuous pressure bearing down on the profit rate which capitalists experience and they do not themselves give rise to laws. What they do, then, is to keep the way open for continued accumulation and investment. When they flag, and they are by nature temporary or impermanent, so the outlets and incentives for additional investment are closed down. Since capitalism is based on profit, the rate of profit governs investment decisions. High and rising profits will encourage expansion through the additions made to investment and thus to production and, through qualitative improvements in techniques, have a still-further effect in raising the productivity of’ human labour. When profitability falls so does

[p031] 192 new investment, and with it the rate of growth in the economy; production and productivity grow more slowly or may even fall. The secret of sustained growth under capitalism is normally a continued high rate of investment which will only be maintained as long as profit rates are considered, by capitalist investors, to give them a sufficient rate of return, when risk and other factors are taken into consideration. Moreover, while expansion creates the capital available for new investment, this new investment, so far as it raises the organic composition of capital—and even assuming that markets are found for the increased output—tends to bear down on the profit rate. On the other hand, although stagnation and decline are accompanied by the absence of new capital formation, and may even see the destruction of existing capital stocks, they may open the way for renewed expansion based upon anticipated increase in the profit rate. It will be seen, therefore, that it is in the nature of capitalism to grow unevenly. This is true over time: periods of high investment bring about an inevitable reversal by squeezing profit rates; periods of slow capital formation, or actual destruction of capital, through slump, war or even natural disaster, may prepare the way for a new spurt forward. It is also true as between different sectors within a national economy and between different parts of the world economy. Account can thus be taken of the unevenness of growth characteristic of capitalism including the co-existence of declining and expanding industries and the different rates of growth dis- played, over the same period, by different capitalist countries. It is necessary to add to this that while surplus value is only created in the ‘productive’ sectors of the economy, it is divided up between different sections of the capitalist class—some of whom appear as money capitalists (bankers, financiers, stock brokers), some as occupied in realising surplus value (trade, administration, advertising), some in maintaining the general political and ideological conditions for preserving this mode of production (state apparatus, legal system, education) and others in a purely parasitic role. For a given capitalist class as a whole, some part of the total surplus value of which it disposes will be derived from the exploitation of productive workers in their own country, some from the exploitation of workers and peasants in other countries (whether or not politic- ally independent). The existence of the latter circumstance, known to Marxists as ‘imperialism’, has fundamental importance for the understanding of capitalism in the 20th century since it has Provided one of the necessary conditions for the continued expansion of capitalism and for the counteracting of the tendency for the rate of profit LABOUR REVIEW—Summer 1963 to fall.> Capitalists in the epoch of imperialism have the choice of investing at home or in other developed or underdeveloped countries where the rate of profit may be higher. Subject to the national state rivalries which flow from the historical development of the bourgeoisie and find expression in tariffs, colonies, restrictions on trade and invest- ment, special privileges, concessions, etc., favouring particular national groups and interests, capitalism is a world system. The different component states are related to this through history and their economies are shaped by the relationship which has thus developed with the world market. The structure of British capitalism has been shaped by its head start in industrialisation and the powerful position in world trade and finance, coupled with vast imperialist possessions, built up during the 19th century. Despite the pressures of the present century these circumstances still show themselves in the deep involvement of the City of London with the financial activities of the whole capitalist world market, the continued role of Britain as an overseas lender with big accumulations in other countries, and the semi-privileged position or favoured connections in many traditional markets.4 3. There is plenty of evidence of Britain’s technical weaknesses and the failure of the pattern of her exports to adapt itself rapidly enough to the changes in world market demand. Carter and Williams, for example, in Industry and Technical Progress report that many firms shocked them by their ‘ignorant complacency’ towards technical progress, others were ill-placed to command the resources (and in part the human ability) necessary to begin that progress’. C, Freeman has spotlighted the smallness of British business outlays on scientific and technical research compared with those common in the U.S.A., in Economic Review, May 1962. T. Barna has shown in a number of studies how British exports are much less in line with changing trends in world demand than those of her industrial rivals—one of his articles demonstrating this appeared in The Times on the 1963 Budget day. Every bourgeois publicist and businessman knows what the problems are, Even Macmillan knows what they are and has proclaimed that the Tories, if returned to Office, will ‘help the nation to adapt itself to the continuous changes of the modern world, in fact to modernise Britain’ (interview in The Director, May 1963), although they have conspicuously failed to do this after 12 years in office. The real barrier to economic growth and technical advance is capital itself which, in Britain, for historical reasons, does not permit that development of the productive forces which, under different con- ditions, capitalism in other countries (France, Germany, I'aly and Japan) is still capable of. 4. As the Bank of England put it, sterling ‘retains the lead as an international business currency and is still equipped with a more extensive network of banking establishments and connections than any other currency’. Evidence to Radcliffe Committee.

[p032] BRITISH CAPITALISM British capitalists depend in part, or a section of them depend, upon the continuance of these historically-derived advantages of British finance capital. Part of their earnings comes from capital invested overseas, or from activities in world trade 193 and finance which represent a return on investment involved with the circulation of capital or its realisation rather than on the ownership of directly productive industry.> British capitalism and the world market These special features of British capitalism have a bearing both on its strength and its weakness at the present time, but they also contribute their share to the contradictions with which it is beset. Despite the heavy financial costs of the Second World War and the subsequent loss of direct political control of imperial possessions, Britain still retains immense assets from the past. Applying what was learned in the 19th century at home the British ruling class has pursued in the former Empire a policy of tactical withdrawal from untenable positions, while retaining as far as possible the more tangible material advantages bound up with investment and trade. The unrivalled facilities and world-wide connections and experience of the City of London have made it possible to retain for itself, and for sterling, a considerable role in world finance and, for the institutions which compose it, one which is lucratively rewarded. It is true that the position cannot be compared with that of pre-1914 and it is now constantly under challenge from European centres as well as New York. However, there can be no doubt, the financial position of Britain in the world economy stands far higher than its position as an industrial exporter. Some critics have pointed to this discrepancy in no uncertain manner.® If there is a conflict between these two aspects of British capitalism seen from outside, the divergent interests of the world of finance—deeply involved in international deals—and that of the world of 5. One study puts ‘the present value of private investment overseas’ at £7,000 million as against £4,000 million in 1939, But this makes no allowance for increase in the value of pre-war investments. Such figures invariably understate the full value of such investments; a figure of £10,000 million is likely to be nearer the truth as the approximate value of British- owned assets overseas. Against this must be set government short-term indebtedness (mostly to U.S.A.), short-term liabilities to foreigners (say, £1,000 mn.) and foreign (mostly American) capital in Britain of some £2,000 mn. 6. Thus the American Professor Kindelberger ends an article which deals with Britain’s position in foreign trade with the words, ‘ a country which has lost its capacity for technical change cannot have its currency serve as an international unit of account in a world of technical change’. Lloyds Bank Review, July 1962, p. 28. industry are equally manifest. No doubt. their representatives, as two sections of a single class between whom innumerable ties of personal interest and intimacy run, have basically similar needs. On matters of policy, however, the present delicate position of the pound means that a dilemma exists which gives rise to incipient tension between these two great parts of the capitalist class. For that part which can roughly be designated as the City the axis of policy must be the preservation of sterling as a sound currency: that means a watchful eye on the reserves and the use of deflationary monetary instruments whenever they seem to be in jeopardy. What jeopardises them is anything which tends to cause a deficit in the balance of payments sufficient to provoke an accelerated loss through the with- drawal of foreign funds from London. Care for the pound has been the root cause of the stop-go policy in which the government has alternately increased Bank Rate, and taken other measures, to check the drain on the reserves and then done the reverse to re-animate the internal economy, withering from an excessive dose of deflation. . The vagaries of credit policy, based on financial considerations and devised in the interests of the City of London, have done a good deal to slow down industrial expansion in Britain over the past decade. Not only have the repeated periods of credit squeeze discouraged much industrial invest- ment which might otherwise have taken place, not only has there been uncertainty arising from these switches in policy, but the investment put in hand, sometimes with state support, during the periods of credit relaxation has embodied some major mis- judgements.?/ To safeguard the export trade the 7, A classic case is the steel industry which early in 1963 was working at only 70 per cent capacity, largely because of the big expansion which took place with state support in 1960-61. This was at a time when politicians, like ‘economists’, were looking around for something to ‘expand’, perhaps with the hope of caiching up continental rivals. There then took place ‘a wide array of misjudgments of specific demands: how much steel would be needed, for example, for ship- building, structural steelwork, the oil industry at home and s‘ill more abroad, tinplate containers for food packing, coalmining and railways. The competition of plastics, aluminium and ferro-concrete was under- estimated’, D. Burn, Lloyds Bank Review, April 1963,

[p033] 194 home market has been restrained: but the result has been adverse for total output, for unit costs and for competitiveness in the world market. Down to the middle of 1962 the economic policy of the Tory government, responding to pressures from the City of London, had accepted that a too rapid internal expansion, by causing imports to rise ahead of exports, was the main danger against which to safeguard. It received its final form in the 1962 Budget of Selwyn Lloyd, only to be followed within a few months by a ‘new course’ in economic policy. The whole previous year had been dominated by discussion of the Common Market, following the government’s decision to apply for entry. The rapid A ‘new course’ in As a preparation for entry, and to cope with increasing economic problems at home, the govern- ment embarked on a new policy of gearing up the economy for faster growth through the National Economic Development Council and the National Incomes Commission. Just as significant, however, was the jettisoning of the Selwyn Lloyd policy and the adoption of a more ‘expansionist’ programme. Taken together these moves can be seen as repre- senting a new alignment of forces within the ruling class, with greater representation for the interests of industry, as against the City, and a more con- certed attempt to restore and increase the profit- ability of industry and enable it to catch up with its foreign rivals. This tendency towards ‘expan- sionism’ was rendered increasingly necessary, in any case, by the sharp worsening of the industrial situation which took place in the autumn of 1962. efore long Lord Hailsham announced that the era of automatic ‘full employment’ had come to an end. In his Budget speech Maudling proclaimed that there was no contradiction between an expansion of the home market and the increase of exports. The decision, through tax concessions and increased expenditure, to pump an extra £250 million into the economy drove home the point. What the effect will be remains to be seen. The trends in world trade make it likely that real pressure against sterling will not build up until 1964, while the improvement in business likely to follow the Budget measures will provide the Tories with a ‘prosperous’ background for the general election. By the time that the Budget for 1963 had come round Britain’s bid to enter the Common Market p. 6. The general moral of this article, whose author is a one-time Times leader-writer and now adviser to the AEI electrical combine, is that there has been inadequa*e concern with the pattern and quality of investment. LABOUR REVIEW—Summer 1963 growth of the member countries had, indeed, created a situation of growing prospective difficulty for British industry. The rapid growth of Europe meant that its rivals were equipped with a growing pro- portion of the most modern, cost-reducing plant and machinery. The slower investment rate in Britain—taking the average of industry as a whole —placed her industry at a disadvantage in the increasingly competitive markets of the world. It was hoped, then, by getting inside the Common Market, both to link the economy to a rapidly growing group of countries and to prevent the damage to trade likely to result from tariff dis- crimination. economic policy? had been rejected, but it is unlikely that this has yet made any fundamental difference to internal economic policy. It does make it more imperative to increase the efficiency and profitability of industry in preparation for intensified foreign trade com- petition. An indispensable part of this process, recognised and accepted by worthy Fabians and ‘responsible’ trade union leaders, is the reduction of the share of wages in the national income.’ For the government decisions bearing on this desired end have to be taken politically and in line with the assessment it makes of the relationship of class forces. It would be easy to rush to the conclusion that an early and frontal attack on working-class standards must be made, but a moment’s pause suggests that such a move would not be intelligent or likely. Unemployment has not yet undermined the fighting capacity of the working class, which has behind it long years of steady work and regular, if not substantial, increases in money wages. It would be folly to wage big struggles against this class so long as possibilities exist of achieving the same end through less costly and dangerous means. The elaboration of such means, we may assume, has formed the substance of week-end colloquies at 8. This is one of the main practical proposals which issues from the Fabian pamphlet in the humorously named series ‘Socialism for the Sixties’ by J. R. Sargent, entiiled Out of Stagnation. As he is writing a recipe for raising the rate of growth under capitalism his major concern is, very logically, how the rate of profit can be increased. In the short run, at least, that means that the share of wages in the national income must contract, with the promise that they will rise, in real terms, at some stage in the future. In o‘her words workers are asked to create more capital for the boss in order that, whatever the real wage, he will be able to extract still more surplus value from them in the future and compete more effectively with his foreign rivals on the world market.

[p034] BRITISH CAPITALISM Chequers and of the business of Cabinet meetings and all the informal gatherings at which ruling class strategy is hammered out. As a start, no doubt, the employers and their political representatives will have made a careful assessment of the crisis of leadership in the working-class movement and have drawn the necessary conclusions. Indeed, the absence of a serious challenge from the official leaderships of the working class is what enables British capitalism to face its contradictions without losing its traditional aplomb. The existence of a ‘loyal opposition’ is of inestimable value to the directing class. It means the willingness to create an atmosphere of national unity in any period of crisis. It provides an alternative programme for the solution of these contradictions with the tacit under- standing that no frontal attack will be launched upon the foundations of the system. In the day-to- day running of affairs it brings in representatives of labour as trusted advisors, team-mates or loyal critics. The men of the right-wing apparatus of the Labour Party and trade unions have retained their leadership of the class precisely through their ability, over the years, to win concessions for their members. Their position, in fact, depends upon the ability of the system to yield such concessions. They draw their sustenance, and what social importance they have, from the organisations of the working class; they are of value to the ruling class only so long as they retain such support. For the labour bureau- cracy control of the apparatus is not enough; they have to win the support of the working class and for that they must appear, at times in deeds, as well as in words, as its champions. They must, as far as possible, disguise their policies of class collabora- tion with talk of prudence, restraint and respons- ibility. And they must cherish the integrity of their organisations however deeply they may be drawn into practical co-operation with the state or the 195 employers. Economic stability and expansion have strength- ened all the traditional reformist and revisionist illusions which grew up in the period of British capitalism’s imperialist prime. They have been cloaked by time-serving intellectuals in new verbal garb borrowed from the latest fashions in bourgeois sociology. A semblance of reality has been given to these claims by the ability of organised workers to win wage increases without big struggles in a period of full employment. The increased involvement of the state in the economy, the improvement of social services and the diversification of working-class consumption in line with improvements in technology have provided further arguments that capitalism has ‘changed’. But these changes have not altered its basic structure or deflected its governing laws from their course. Exploitation, far from having dis- appeared, has become more methodical and more rational. In the centres of the newer industries the consumption of labour power exacts a ruinous toll from workers in the prime of life; no satisfaction is offered by the work itself, for which the wage provides the unique incentive. While the material gains of the working class, on the most generous assessment, have been modest indeed—partly made possible by systematic overtime and the increasing tendency for married women to work outside the home—the inequalities in income and wealth have become markedly greater in the past decade. The share of wages in the national income has remained constant. To base policy on the so-called ‘changes’ to the neglect of the essential nature of capitalism and the needs of the exploited class within it binds the working class to the interests of capital. The. new varieties of revisionism, which provide a theoretical gloss for the pragmatic actions of the right-wing trade union and labour leaders, are by nature and purpose anti-working class. The crisis of leadership The conditions which gave reformism and revi- sionism a new lease of life in practice and produced a new crop of theories are now passing away. Indeed, those conditions, in the post-war world, were exceptional and transitory; if that is true of world capitalism, confronted by a hostile world system and faced with the loosening of its grip on the less developed countries, it is true above all of Britain. Not only does Britain manifest all the general contradictions to which capitalism is prone, but, as has been seen, it has problems of its own which arise because of the adverse changes which are taking place in its relationship to the capitalist world market. As these contradictions mature, therefore, the objective conditions for this strengthening of reformism, and thus for the continuation of the present role of the labour bureaucracy, will dis- appear. In fact, there are signs that they are already doing so. The crisis of British capitalism, therefore, must penetrate into all levels of the labour move- ment, including the summits of the bureaucracy. The way in which this bureaucracy is trained and recruited, the traditions and organisational functions to which it is heir, do little to make it a sensitive register of social currents. Only a few exceptional figures sense even the premonitions of impending change. Their lack of conscious theory, or even of imagination, incapacitates most of them from under-

[p035] 196 standing that the conditions for their own dominance in the movement are being undermined. These limitations make them all the more valuable for the ruling class which will helpfully provide the theory and strive to manipulate these leaders to accept the kind of policy which the bourgeoisie hopes will enable it to master its problems. But if the labour bureaucracy is to be manipulated to deal with the increasingly difficult problems which will arise, new policies will be required. The form of these policies is already apparent: a more formal integration of the trade unions into the institutional framework of capitalism at local and national level. This makes necessary and possible the strengthening of the powers of the trade union officials as against shop stewards and the rank and file. Only through such a streamlining of the unions, with the consent of the bureaucracy, can policies of wage restaint, rationalisation and employer-worker co-operation be put over in industry. Such a policy aims, in fact, to integrate the worker into the enterprise; but it involves, also, a selective process within the working class itself—the creation or maintenance of privileged layers while others are underpaid, undertrained and discarded as too old, unemployable or undisciplined. To meet the exigencies of competition and techno- logical change industrial discipline needs to be placed on a new footing; to use the existing trade union apparatus is the most immediately economical method of achieving this end. Trade union leaders who are prepared to accept such policies, including the holding back of wages to benefit capital by favouring a higher rate of profit and therefore of new investment, are described as ‘forward-looking’. The principles of trade unionism, that is as autono- mous organisations of the working class, are mean- while subjected to bitter attack. The meaning of the current propaganda against the trade unions is clear. It says that if the bureaucracy does not co-operate in integrating them into the institutional framework of capitalism then this will have to be LABOUR REVIEW—Summer 1963 done compulsorily, by destroying their autonomy. At the end of this road, of course, lies the fascist- type corporation or labour-front. The contradictions of capitalism do not work themselves out as an automatic, impersonal process beyond human intervention. At the centre, in any case, is the struggle of the classes, and here the role of conscious leadership can be all-important. As the conditions for the successful operation of right- wing policies are undermined, as the bureaucracy is being called upon to operate policies which are detrimental to the interests of the working class to help solve the problems of capitalism, so the oppor- tunities for the posing of alternative policies and winning rank-and-file support become greater. Such policies must be found in the present-day needs of the working class and cannot be posed abstractly as a programme somehow to ‘solve’ the economic crisis of British capitalism, after the pattern of the Labour Party leaders. These needs, however, elementary as they may appear, pose fundamental questions: in short, the fitness of the capitalist class to rule. Out of the contradictions of a system which lives by the exploitation of a class comes the historical justification for this class to emancipate itself by making itself the ruling class. The problem of - power is not posed continuously, far less consciously, by the class, though it is inherent in the objective situation. The factor of conscious leadership is therefore all-important in bringing to the foreground issues which can take the class, or substantial sections of it, forward to a struggle for power. Such a task involves going through a variety of experi- ences with the class, ‘patiently explaining’ every turn on the road. It means exposing the old, bureaucratic leaderships, breaking down barriers between political and trade union action, warning against centrism in its Stalinist and ‘left-Labour’ versions and taking every possibility of initiative which the situation presents. a Tee r A brilliant survey of British politics just before the General Strike of 1926 Seven shillings and sixpence from New Park Publications Ltd., 186A Clapham High Street, London, S.W.4 Telephone: MAC 7029 Se