The fight for

First of a series of articles on the crisis of British capitalism That something is seriously wrong with the British economy is widely admitted, even by the apologists for capitalism. Through all the years of 'prosperity, a persistent note of concern and doubt has been present in writings and speeches on the economic situation and future. British capitalism has not solved its long-standing problems, while new and formidable ones arise to confront it in the coming years.

The deep split in the ruling class over the Common Market question is one striking piece of evidence of a spreading lack of self-confidence in its ranks. The capacity of the British economy to compete in the world market, upon which its profits, interest and dividends depend, is seriously in doubt. New methods and policies, involving the whole area of political decision and particularly the relationship of class forces, are clearly in the making. Proposals for strengthening capitalism THE problems facing • British capitalism today, - however novel the form they may assume, have deep historic roots. As a mode of production, capitalism first assumed nationwide scale, transforming the social relations in Britain. Furthermore, the development of industry in Britain on capitalist lines brought into being the world market which, for a whole epoch, ending in the 1870s, she was able to dominate.

Britain's head start in industrialisation and monopoly of the world market in the 19th century produced contradictory features in the economy and in Britain to enable it face the growing strains ahead are being put forward in a variety of forms-the activity of fascist groups, the 'Liberal revival', Macmillan's clean sweep in the government, the wide circulation accorded to books like those of Shanks and Schonfield. All are evidence of growing ferment running through from the top of the Establishment to the ranks of the suburban middle class.

In fact quite apart from, though necessarily connected with, the problems of capitalism as a world system - challenge from the noncapitalist states, the colonial liberation movement, the spectre of slump-British capitalism displays its own symptoms of sickness. We shall not be concerned here with the social and cultural aspects of this decay, significant as they are. Our task will be to lay bare the economic roots of the crisis as briefly and clearly as possible.

accumulated capital at home and abroad acted as a barrier to more rapid technical change in industry. When markets were lost in one area, new privileged markets were found or could be exploited more fully. Big returns came from capital held abroad which, up to 1914, was being added to at a phenomenal rate. Britain entered the 20th century with an economy still based on the old technology and structure, though the world conditions which had made for this pattern had passed away.

At the same time, the financial resources of British capitalism had made it the world's banker. Usury on the grand scale was as important as industrial production for survival the fortunes of the ruling class. The bankers and financiers of the City of London constituted a major segment of this ruling class. Their interests were in international trade and finance--and they could, and did, come into conflict, after the First World War, with substantial sections of the industrial capitalists.

From 1920 it became manifest that the old conditions for the maintenance of British power and profits had passed away. In the heyday of British capitalism it had been possible to tame the Labour movement, to guide it into the paths of pure and simple trade unionism, to prevent it attaining political independence.

From the early 1900s, however, and to some extent for the previous 20 years, there was a distinct sharpening of the class struggle in Britain. More militant unionism, the rise of the Labour Party, rapid growth in trade union membership showed this. The question of a socialist challenge was placed on the order of the day.

But, despite the shocks of the first part of the 20th century, vast reserves still remained as well as experience in coping with difficult situations. The long history of British capitalism while in one sense a burden—meaning technical obsolescence, poor location of industry, routine methods and lack of enterprise—held immense advantages.

After the First World War, Britain was no longer able to export capital on the former scale, but income on past investmentsthe fruits of exploitation of workers and peasants in the colonies and semi-colonies-countered the loss of markets and the decline of staple. industries between the wars. The social crisis was kept within bounds.

The showdown with the working class, which had been anticipated and prepared for in full knowledge of the role which the official leaders would play, led to the General Strike of 1926. British capitalism thus acquired a breathNTE HAD *-BUS ing space to work out solutions to its problems which, despite the world depression of the 1930s, continued until the political crisis which preceded the war of 1939.

Over this period of course, British capitalism underwent many modifications. Joint stock companies and monopolies took over from the old family-type businesses. New industries arose while some of the old ones declined. Organisational and business methods moved more into line with the requirements of the 20th century and the pressure of competition in the world market.

But, with all this, British capitalism continued, and continues, to bear many marks of its origins and former world leadership and monopoly.

It still carries an excessive weight of obsolete equipment. The adjustments which have been made to changing world conditions have always lagged behind the needs. Britain's share in world trade has continued to decline. Two world wars have whittled down the advantages derived from the past.

The new challenge of postwar Europe and the loosening grip on privileged markets and investment fields increasingly reveal the extent of the failure to adjust to the competitive struggle of the second half of the 20th century.