Reproduced from Issue 2 of the journal (available to buy here)
Editorial Introduction (Dominic Smith)
‘Opposition leader says growth demands major change in way economy is run, as shadow chancellor vows to rewrite rules’ (Guardian 2016) declares the Guardian in relation to the recent Labour Party ‘State of the Economy’ conference held on 21 May.
The Independent is even bolder. Referring to comments made by Shadow Chancellor John McDonnell, it dramatically announces to the world,
A Labour Government under Jeremy Corbyn would bring in even more radical reforms than post-war Prime Minister Clement Attlee, Shadow Chancellor John McDonnell has pledged (Independent 2016).
Putting aside the rather crude rhetoric, both by bourgeois journalists and the reformist Labour politicians themselves, what in fact was the real nature of the various proposals offered up by the plethora of speakers at the conference accompanied by the snappy phrase ‘the new economics’?
In a short but highly insightful summary of the event, Marxist economist Michael Roberts, whose article ‘It’s a Depression’ features in this issue, writes,
What was this new economics? Well, I’m afraid it was not new but really a rehash of old Keynesian arguments and policy proposals. As McDonnell said, the aim was to ‘transform capitalism’ with new rules and state intervention, not to replace it (Roberts 2016).
It is on the basis of this revival of old arguments that we are republishing the 1987 article from Militant International Review, ‘A Million Jobs A Year – Reviving the AES’ by Bob McKee. After all, if the reformists in the Labour Party can repeat the same old reformist ideas from decades ago, then we can do the same with our Marxist criticism of them!
As the introductory paragraph explains, this article is a critical review of the 1985 pamphlet A Million Jobs a Year written by the left-wing economist Andrew Glyn. In critiquing the various reformist ideas and arguments Glyn put forward and developed over the course of his pamphlet, Bob McKee drew heavily on the far more radical pamphlet that Glyn had written previously as a member of the Militant Tendency entitled Capitalist Crisis: Tribune’s Alternative Economic Strategy or Socialist Plan, written in 1978 and republished in 1984 with a new introduction.
Although outside of the scope of this introduction, some members of the Marxist World Editorial Board have, over the course of discussions, expressed some serious reservations even with the earlier pamphlet by Glyn, highlighting various centrist conceptions. None the less, it still falls within the framework of Marxist criticism and, as Bob McKee’s article shows, contrasts very favourably with Glyn’s later pamphlet. A comprehensive overview and criticism of Glyn’s Capitalist Crisis, alongside other important Marxist criticisms of reformist economic theory by Militant, will be produced by Marxist World in the future. For an analysis and critique of Andrew Glyn’s other works and ideas, readers are recommended to read our 2014 website article The “Transformation Problem”, Andrew Glyn and Counter-Tendencies to the Falling Rate of Profit (Marxist World 2014).
McKee’s article has had some interesting recent history within the opposition tendency in the Committee for a Workers’ International (CWI), the majority of whose supporters came from the Socialist Party of England and Wales, that later, along with some independent Marxists, formed the nucleus of Marxist World. This opposition movement began to crystallise in 2013 based on criticism of the CWI leadership’s analysis of the 2008 world capitalist crisis and subsequent recession. The opposition argued that the CWI’s economic analysis was not Marxist, but underconsumptionist. As time went on, this criticism developed from an economic criticism to a political criticism of the Socialist Party/CWI programme. One of the most important examples of this was the CWI’s two-stage approach to nationalisation, calling for the nationalisation of the banks as a ‘first step’ and later, at some unspecified future date, following up with the rest of the economy. This point was made in the opposition’s first full length document What is the Cause of the Current Capitalist Crisis? under the sub-heading ‘CWI adopts two-stage “socialism”’:
Unfortunately, Andrew [Glyn]’s ideas, fine economist though he was, seem to have been partially adopted by our organisation. In Socialism Today, Lynn Walsh reviewed the book of Keynesian economist Paul Krugman ‘End This Depression Now’ and explains the ‘socialist’ solution:
“The banks and finance houses would have to be nationalised (not bailed out and propped up at public expense), and run under democratic workers’ control and managementW Such measures would undoubtedly meet the entrenched resistance of the capitalist class. State intervention in favour of the working class would unavoidably pose the question of the takeover of the commanding heights of the economy, to form the basis of a democratic plan of production” (Walsh 2012b).
Lynn believes that the banks should be nationalised first, and this would “unavoidably pose the question” of nationalisation of the rest of economy after an undefined amount of time (Marxist World 2013).
Independent Marxists such as myself, who had already left the CWI the previous year, participated in discussions with the CWI opposition at the time. It was I who brought Bob McKee’s article to the attention of the opposition, which helped form the basis of the first major opposition document. While it is true that Bruce Wallace should be credited for identifying the influence Andrew Glyn had on some of the leaders of Militant, in particular Lynn Walsh, who later became the leaders of the Socialist Party following the split with the Grant/Woods faction, in McKee’s article Andrew Glyn is criticised for adopting this two-stage approach following his break from Militant. It is for this reason that McKee’s article made an ideal citation for the opposition document; It clearly demonstrates how far the current leadership of the Socialist Party have degenerated towards reformism from their days as Militant.
In Militant International Review 34 (1987), Bob McKee wrote a scathing review of Glyn’s A Million Jobs a Year and the idea of a two-stage approach to socialism after Andrew had theoretically retreated:
‘A socialist leadership must explain to the working class clearly and from the beginning what is necessary in order to give them the most direct way of controlling the economy. That can only be a programme of public ownership, under workers’ control and management, of the financial institutions and major industrial and commercial monopolies. If a [socialist] government was to follow the policies [outlined by Glyn] and decide it was not necessary ‘immediately’ W to take over the commanding heights, then it cannot succeed in really controlling the economy. It will also confuse and weaken the workers’ resolve if it changes its programme midstream after the capitalists have been able to sabotage the economy and prepare for political reaction. In such a situation, the advantage is with the capitalist class while they continue to hold the levers of economic and political power.’
Our organisation in 1987 correctly pointed out the pit-falls of presenting a misleading and ambiguous two-stage socialist programme to the working class. But it is exactly this muddle of a programme that the Socialist Party EC are advancing in our current material. (ibid)
Events have moved rapidly in the nearly three years since these words were written. The Socialist Party, from being in a position of at least relative significance in the workers’ movement compared to other groups on the Left through its role in the leadership of the PCS and political links to the RMT through No2EU and TUSC, has been completely sidelined by recent developments, particularly the election of Corbyn to Labour leadership and the resurgent growth of the Labour Left.
For that reason, although our criticisms of the Socialist Party still stand, they are no longer our focus. Our interest is the critiquing of the repackaged reformist politics that are being promoted by sections of the Labour Party leadership.
As we stated in the Editorial Introduction of this issue of the journal, Marxist World are committed to ‘…support all struggles within the Labour Party against the right wing and advocate a socialist program…’. We hope that the reprint of McKee’s critique, along with the other articles in the journal, will contribute towards this goal.
Guardian. 2016. ‘Jeremy Corbyn calls for new economics to tackle “grotesque inequality”‘. http://www.theguardian.com/politics/2016/may/21 /jeremy-corbyn-labour-economy-re-industrialisation-digital-age
Independent. 2016. ‘Future Labour government should be more radical than Attlee, says Shadow Chancellor’. http://www.independent.co.uk/news/uk/politics/labour-government-jeremy-corbyn-most-radical-ever-shadow-chancellor-john-mcdonnell-clement-attlee-a7041311 .html
Marxist World. 2013. ‘What is the Cause of the Current Capitalist Crisis?’. http://marxistworld.net/2013/09/what-is-the-cause-of-the-current-capitalist-crisis/
Marxist World. 2014. ‘The “Transformation Problem”, Andrew Glyn and Counter-Tendencies to the Falling Rate of Profit’.http://marxistworld.net/2014/02/the-transformation-problem-andrew-glyn-and-counter-tendencies-to-the-falling-rate-of-profit/
Roberts, M. 2016. ‘Labour’s new economics – not so new’. https://thenextrecession.wordpress.com/2016/05/22/labours-new-economics-not-so-new/
A Million Jobs a Year – Reviving the Alternative Economic Strategy (Bob McKee)
[In this article] Bob McKee examines a recent pamphlet by socialist economist Andrew Glyn and concludes that it is only the Campaign Group of Labour MP’s, the pamphlet’s publishers, who still defend the ideas of the ‘Alternative Economic Strategy’ (AES).
In 1985 the Campaign Group of Labour MPs published a short pamphlet entitled A Million Jobs a Year – the case for planning full employment. This pamphlet was written by Andrew Glyn, a socialist economist active in the labour movement, and in the past a regular contributor to the pages of the Militant newspaper and its publications. The pamphlet had a foreword from Tony Benn MP and received the signed endorsement of most of the Campaign Group, although not all.
This pamphlet clearly represents the basic views of what the media calls the ‘hard left’ in the Parliamentary Labour Party. The fact that it was not endorsed by even all the Campaign Group, let along the bulk of Labour MPs, demonstrates that the policies put forward in it are too radical for Labour’s leaders and for many Labour lefts. However, Andrew Glyn’s arguments expressed in the pamphlet must be seriously considered by Marxists in the labour movement for two reasons. Firstly, while they may not be supported by the Labour leaders, the ideas in A Million Jobs a Year would almost certainly gain majority support among the rank and file activists in the labour movement. For that reason alone, the pamphlet deserves careful consideration.
But there is an even more important reason to examine the arguments presented in the pamphlet. In the late 1970’s and early 1980’s the general economic thinking in the labour movement coalesced around a set of proposals called the ‘Alternative Economic Strategy’. The AES had wide support despite its several interpretations within the Labour Party. Since the 1983 election, however, the AES is no longer talked about and its basic policy measures have generally been jettisoned by Kinnock [the leader of the Labour Party at the time] and the ‘realigned’ or ‘soft left’. Anybody who reads the Campaign Group pamphlet will find that it is only in that group in the whole labour movement that the ‘Alternative Economic Strategy’ is preserved.
The Marxists in the labour movement always opposed the reasoning behind and the policy conclusions reached by the proponents of the AES, and this article will explain why. Unfortunately any analysis of the Campaign Group pamphlet will not only show its reliance on the fatal flaws of the policies of the ‘Alternative Economic Strategy’. It will also reveal how far Andrew Glyn, formerly a vociferous and effective Marxist opponent of this set of reformist economic policies, has drifted towards accepting them.
Andrew Glyn’s opening line is ‘there can be no dispute that the most fundamental economic and political problem facing the next Labour government will be tackling mass unemployment’ (1). While that is true, it would be more accurate to say that the fundamental problem is the crisis of production in the private profit capitalist system, a symptom of which is mass unemployment.
No matter, for Glyn outlines the shocking waste of resources when workers and plant are idle. He estimates that the extra production that could be created by putting the unemployed to work would be equivalent to ‘a trebling of council house building, a doubling of manufacturing investment, plus a 50% increase in pensions and in government spending on health and education.’
We know only too well that the Tory government has made no effort to create jobs in the economy. On the contrary, it has used the rising unemployment totals as a weapon to beat down those in work to accept a reduction in trade union rights, poorer conditions and lower wages rises. More recently, rather than reduce the jobless it has resorted to reducing the jobless statistics by fake employment programmes and a campaign of intimidation against the rights of claimants.
But it would be rather one-sided to suggest, as Andrew Glyn does in A Million Jobs a Year, that the only reason the Tories under Thatcher have dispended with previously supported Keynesian policies of state spending is because they want to secure ‘social discipline’ over the working class. A much more powerful reason has been that the Keynesian policies of state spending and cheap money have miserably failed to maintain the profitability of British capitalism. Profit rates fell throughout the 1970s and British production and productivity rates have declined with each successive recession (1970, 1974, 1979). Keynesian policies were not working for the profit system and would not work if reintroduced.
The last point is emphasised because beneath much of the radical talk of the proponents of the ‘Alternative Economic Strategy’, and it is echoed in the Campaign Group pamphlet, is the belief that expansion of public spending under capitalism can right the economy.
Now it is true that Andrew Glyn wishes to disassociate himself from that Keynesian argument. But he does that by redefining Keynesianism to be a policy of expansion ‘which is not accompanied by such controls at the level of industry and economy as are necessary to secure success’ (17). This seems to be a distortion of the essence of Keynesianism which is that an increase in ‘effective demand’ is all that is needed to provide a market for capitalist investment and production. And that ‘demand’ can be created by increased government spending, whether with controls over capitalists or not.
This is something that Marxism would not accept. Expanding markets are not enough to bring production and employment while production is for profit and not need, and decisions about investment are made by the owners of capital, however ‘controlled’. But the fundamental thesis of the Glyn pamphlet, as it was for the proponents of the Alternative Economic Strategy in all its variants, is that expansion under capitalist is possible ‘on the basis of extensive controls over foreign exchange transactions, over the financial system, over prices, over trade and over investment and employment in the private sector’ (29). In this sense, the Campaign Group pamphlet is Keynesian, not socialist, economics.
On the other hand, socialists have always stood by the tenet that the anarchic and wasteful private profit system must be replaced by a planned economy under workers’ control and management, if production is to go ahead smoothly and if employment, wages and social needs are to be met. Planning cannot be successfully implemented without control of the economy. The question is: can effective control over the economy be achieved by a Labour government (or perhaps more precisely, by the working class) without public ownership of the major financial and industrial companies that presently dominate it?
The Campaign Group pamphlet argues that the economy can be planned without public ownership through a system of controls. But it is a dangerous illusion to imagine that a Labour government can ‘control’ capitalism and still meet the demands of the working class. Only the elimination of capitalism can do that. And in refuting the views of A Million Jobs a Year, we can refer to Andrew Glyn’s own arguments against ‘controls’ and for public ownership which he so ably expressed in his previous Militant pamphlet Capitalist Crisis: Tribune’s Alternative Economic Strategy or Socialist Plan, written in 1978.
One of the arguments used in favour of controls in the Campaign Group pamphlet is the historical precedents of 1938-42 and 1945-48. Then, Glyn explains, one million jobs a year were created and this was made possible because controls were imposed on interest rates, prices, trade and investment by the government and adhered to by the capitalist class. As a result, the government could expand public spending in 1938-42 to create jobs in the armed forces and in 1945-48 in industry. But, as Glyn himself admits,
Radical and rapid shifts in employment can be achieved’ depending on the political situation and whose interests are being served, i.e. whether those with decisive economic power more or less enthusiastically support the objective (as in 1939), reluctantly acquiesce (1945 perhaps) or bitterly oppose (1987?) (12).
Exactly! Controls over capitalist economic decision-making can only work with their agreement and that agreement is only given if it is in their interests; and as soon as it is not, the agreement is broken. Even during the 1939-45 war, some capitalist companies in the USA, such as ITT, secretly continued sustaining trade and investment with German subsidiaries. Legislation to isolate Rhodesia introduced by the Wilson government and supported by the Heath government was flagrantly flouted by capitalist firms, particularly the oil and armaments companies. And as Andrew Glyn pointed out in his Militant pamphlet, Capitalist Crisis, there was over £2,000 million of illegal export of capital under the post-war Labour government between 1946-48 – now cited by him as a period of successful controls!
And Glyn’s somewhat tentative 1940s historical precedent for creating capitalist production and jobs through controls is not nearly so significant as the experience of the French socialist government which Glyn himself cites. For the lessons of that government are that even extensive controls do not allow a socialist government to plan the economy in the interests of the working class. Quoting the Campaign Group pamphlet:
As imports were sucked in, the balance of payments deteriorated and pressure on the franc increased despite tightening of exchange controls [my emphasis] … control over the nationalised banking system did not guarantee an expansion of investment by the private sector or control over capital movements … control over a number of industrial commanding heights (over half of industrial employment in firms of over 2,000 workers was now in the public sector) did not generate expansion (9).
The key to the cooperation of the capitalist class in any government controls on their activity is: will they increase profitability? During the war of 1939-45, profits did increase dramatically, and anyway the very existence of British capitalist markets was as stake. The programme of controls and even nationalisation by the Labour government 1945-50 was not opposed by the capitalist class as a whole because the financial and structural support, provided by the government and financed by US capitalism, enabled British industry to reemploy workers in comparative social harmony and so boost profitability.
But that was not the case for the French government in the recession of the early 1980s. Their measures were bitterly opposed by the capitalist class, who saw them as a threat to profitability. So controls which are designed to control profits, prices, investment etc introduced by a future Labour government would clearly and correctly be seen by capitalism as a threat to profitability, already poor enough in the UK.
Yet despite the evidence in the Campaign Group pamphlet itself, its author proceeds to argue for a set of controls that would attempt to plan the economy under capitalism. Glyn has already recognised that the success of such controls depends on the support or acquiescence of the capitalist class to them and yet he still puts them forward. So let us examine the value of these planning controls in more detail.
Glyn points out that any Labour government coming to office with plans to expand spending for job creation will almost certainly be faced with a flight of capital out of the country, forcing down the value of sterling. In these circumstances, Glyn says, ‘extensive exchange controls would be necessary’ (19).
Glyn proposes that a Labour government should separate out ‘commercial transactions’ from ‘investment accounts’ so that transfers of capital investment could be stopped without interrupting trade payments. He does acknowledge that such ‘a really comprehensive set of capital controls would involve plenty of technical difficulties’ (20) and yet it could be done, he says.
This is clearly a change of mind by Glyn. In his Militant pamphlet of 1978 he stated unequivocally that:
There is no exchange control system imaginable which can determine which overseas payments made by the monopolies are strictly commercial and which are tied to protecting themselves from fluctuations in the exchange rate. The only effective way to control such payments would be for these companies to be nationalised (Capitalist Crisis, 46).
And, as he added then, there is no surety that money blocked from fleeing abroad will be invested by capitalist firms in creating jobs:
Simply preventing capitalists from doing something will not automatically cause them to do what the government wants, especially given the political advantage for them in showing the government policy to be a failure (Capitalist Crisis, 47).
Glyn’s previous arguments still seem to us to be valid as a criticism of the exchange and investment controls proposed by much of the left as an alternative to public ownership of the finance sector.
The main Tory argument presented against a Keynesian type expansion of public expenditure to raise production and create jobs is that it will be inflationary, by accelerating the growth of the money supply, which if not matched by an increase in production will lead to an increase in prices.
Glyn attempts to answer this argument by saying that if there is an increased expenditure, then increased demand will be matched by increased supply and so there will be no inflation of prices: ‘a major expansion means more goods not less’ (A Million Jobs a Year, 23). But almost in the same breath, Glyn seems to accept that there is no guarantee that increased demand will be met by increased production from capitalist firms, particularly monopolies. They may prefer to take higher profits through higher prices. So he immediately suggests the need for price controls: ‘Price controls would have to be put in place to prevent firms taking advantage of the expanding markets to boost profits by banging up prices’ (24).
Glyn does not seem to remember the experience of price controls under the Labour government 1974-79. Then, the Prices Commission set up by the Labour government was unable to control the myriad of ‘new products’ with ‘new prices’ introduced by companies to circumvent the controls. In fact, the effect of the Prices Commission was estimated at just a reduction of half a per cent on the going rate of inflation. Eventually, after continual revisions of its terms of reference, the Commission became totally ineffective and the last years of the Labour government, before the 1979-81 recession saw a dramatic fall in prices, were years of almost hyper inflation of over 20% per year.
And why were price controls ineffective? Because strict controls would have eaten into the profitability of capitalist industry, already too low for proper investment and production in the UK. If supply was to be increased under capitalism, controls had to be revised and eventually dispensed with.
It is precisely this point that Andrew Glyn made when arguing against the value of price controls under capitalism in writing his Militant pamphlet:
To impose rigid and effective controls in a situation where workers were taking advantage of a temporary upswing and an ending of wage controls to put in for big wage increases would be to drastically worsen profitability. This would eliminate any possibility of the temporary rise of production being translated into a sustainable boom through higher investment (Capitalist Crisis, 39-40).
Glyn hammers home the point against the proponents of controls rather than ownership and planning when he says that arguing for price controls is to ‘opt for a policy which ignores the working of the capitalist system by asserting that, in a situation of crisis, production and investment can be expanded by driving down profitability further!’ (Capitalist Crisis, 40). Unfortunately the author of the Campaign Group pamphlet has forgotten those words. Under capitalism in crisis, price controls would have to allow profits to rise, not fall, if there were to be a chance of persuading capitalists to invest.
Another traditional policy of the reformist left, designed to correct the inefficiencies and weaknesses of the British capitalist economy, has been devaluation of the currency. Previous Labour government have used devaluation as a means of increasing the competitiveness of British exports and increasing the costs of imports in order to improve the balance of trade. At the last election Peter Shore, the right-wing labour speaker on the economy, advocated a 25 to 30% devaluation as the remedy for British economic ills. But the utter failure of this policy to revive exports or even stem the flood of imports into all sectors of the home economy has finally led the Labour left to drop it.
The Campaign Group pamphlet wastes no time in dismissing devaluation. However, it embraces enthusiastically the other main policy prescription of the Labour left on trade: import controls. The advantage over devaluation, Glyn claims, is that devaluation means increased prices through the higher cost of imports, whilst controls on imports do not (A Million Jobs a Year, 25).
This argument is just not valid and again is refuted by Glyn himself in his earlier pamphlet for Militant when he says:
The great advantage claimed for import controls is that, unlike devaluation, the price of imported commodities is not automatically pushed up … but import controls would mean that British workers would be faced with higher prices. With sales limited, foreign capitalists would no longer have any incentive to undercut British firms and they would raise the price of the imports which were allowed in. Not only would workers be forced to switch to already dearer British goods, but these would also be increased in price as British capitalists would no longer be restrained by foreign competition. To a substantial extent then, import control is just a variant on the old capitalist theme of the necessity for the working class to pay with a wage cut for the privilege of maintaining employment (Capitalist Crisis, 41).
It now seems that Glyn wants workers to make that sacrifice, or at least he feels that under ‘controlled capitalism’ there is no choice for workers. As he puts it:
Some people may feel that the real costs of restricted access to imported goods are too high: that having to wait for a Toyota or a Sony Hi-Fi is too big a sacrifice. But there will be UK substitutes available, hopefully (sic!), of comparable performance and price. If the choice is presented honestly, to be what it really is, either ready availability of Toyotas rather than a substitute or reduced unemployment plus reduced queues for hip operations plus decent housing plus readily available BL [British Leyland, the state-owned car manufacturer] cars, is there really any choice? (A Million Jobs a Year, 27).
But is that presenting the situation ‘honestly’ or ‘to be what it really is?’ If workers make a sacrifice by paying higher prices for necessary consumer goods (not just Toyotas) or buy inferior and more expensive British goods, will they get in return more jobs, more houses, more training under ‘controlled capitalism’ i.e. while the decisions to invest and plan for these social needs are still in the hands of the capitalists? No, Glyn is stretching his new found naivety too far.
Not only would British workers not be able to buy cheaper consumer imports but, moreover, British industry, now very reliant on imports of machine goods and semi-manufactures as well as raw materials would be severely damaged if controls were placed on their imports. It is by no means certain that controls on imports would benefit the key sectors of the British economy without also driving up their input costs and so retard the growth of their profits.
A key argument used against import controls is that it invites retaliation from rival capitalist economies. This danger would be serious if Britain’s major trading markets were to slap controls on British goods in response to controls by Britain. Glyn recognises this danger when he says that ‘retaliation and opposition should be anticipated’ (26), but his answer is to bite the bullet and face it out, to use the ‘blunt approach’. And he makes an appeal:
Labour’s potential allies overseas are the labour movements and it would be to them that Labour would appeal to minimise the disruptive action of foreign governments and employers (A Million Jobs a Year, 27).
But can Glyn be serious? Strong import controls can only hit the jobs of workers overseas who work for companies that export to Britain i.e. Toyota workers and Sony Hi-Fi workers. A Labour government takes away their jobs and then appeals to them for solidarity? No, Glyn was much clearer on the consequences of controls in his Militant pamphlet:
It is not difficult to imagine what reception a Labour government would receive if it attempted to introduce really tough import controls … the depth of the economic crisis, and the competitive nature of the capitalist system, make it inconceivable that the British state could get away without retaliation to the introduction of really tough import controls … workers abroad would be pushed into supporting their bosses in the campaign for retaliation and the same thing would develop in the UK as export industries met retaliation from import controls abroad … so the demand for import controls must be recognised as being nationalistic – an attempt to preserve the interests of the ‘British nation’, workers and capitalists alike, and on this basis there would be no possibility of British workers appealing to the labour movement abroad to oppose the retaliatory action of their capitalists (Capitalist Crisis, 42-43).
‘The crucial question’
The supporters of import controls can defend their position best when there is a general expansion of world trade. Then they can argue that, with trade growing for everybody, controls on imports into Britain will not be so damaging for other trading nations. However, the prospects for world trade have deteriorated sharply since Glyn so effectively attacked the supporters of import controls in 1978. Europe and the United States have begun imposing quotas over each other’s exports in retaliatory action. What would happen to Britain if a Labour government attempted to restrict European and US imports?
Even an arch supporter of import controls, Wyn Godley of the ‘Cambridge School’ of economists, who strongly influenced the Labour left in the 1970s, has said that controls ‘would be much more difficult to introduce than in 1976’ (Guardian, 13/1/87) and ‘prefers’ coordinated European reflation, predicting that without general expansion, ‘the mad mercantilists (i.e. protectionists) will devour us all.’ Yet Glyn adopts a policy he refuted before, just at a time when it has even less validity and is jettisoned by its previously strongest supporter!
None of this denies the need for a workers government, where ownership, control and planning rest in the hands of the labour movement, imposing a state monopoly of foreign trade as an essential planning tool. But that would mean the public ownership of all those industries where controls are needed as a necessary part of a socialist plan to control the economy in society’s interests.
And a socialist government of the working class coming to power in Britain would be a source of inspiration to the labour movement in many nations giving them the confidence to demand greater trade with a socialist Britain from their governments, not less.
Socialists stand for international planning of the world’s resources in the interests of working people. As Glyn said in the Militant pamphlet:
Neither import controls nor free trade provide a solution to the crisis of British capital. The fact that the capitalist class in Britain may be forced by the growing tide of protectionism and by its own weakness to impose import controls is all the more reason why socialists should give no credence to them (Capitalist Crisis, 45).
Up to this point in the Campaign Group pamphlet, Glyn has argued that the plan for a million jobs a year ‘would only be feasible on the basis of extensive controls over foreign exchange transactions, over the financial system, over prices, over trade and over investment and employment in the private sector’ (29). In this article we have attempted to expose the flaws in that view, explain that it is indistinguishable from the ‘Alternative Economic Strategy’ put forward by the reformist left in earlier years; and a programme forthrightly demolished by Glyn himself over eight years ago.
The author of the Campaign Group pamphlet is partially aware of his own contradictions when he raises on page 18 of A Million Jobs a Year the crucial question, which is: ‘whether the solutions advocated below are consistent with private ownership of the major financial and industrial companies which dominate the economy’. He then goes on to promote the idea that they are ‘consistent’ by advocating controls over capitalism rather than its abolition, as we have seen.
But still the contradiction bothers him and he returns to the ‘crucial question’ on page 30 in another way: ‘could a plan for full employment along the lines sketched out be implemented on the basis of the present economic structure where private ownership occupies most of the commanding heights?’
Glyn makes the point that controls only worked during the war because the capitalists ‘being committed to the objective of winning the war … were bound to abide more or less by them’. But as he goes on to say ‘the position could hardly be more different now,’ and he presents the evidence to show how hostile the industrialists and financiers would be to controls now in the mid-1980s.
So what does he advocate? Firstly, action against the financial institutions: ‘taking them into immediate public ownership seems absolutely indispensable if a Labour government is to prevent financial crisis and be enabled to use the credit system as part of planning for full employment’. There is no equivocation here.
But when Glyn looks at the industrial sector, he draws back from public ownership because ‘the capacity of the major industrial firms to frustrate a Labour government’s plans for full employment is less immediate than the threat posed by the financial sector.’ Factories cannot be moved like money, he says, and the real task here is to ensure control over investment, production and marketing decisions. So he proposes not public ownership but compulsory planning agreements for the giant firms; and boards of company management where workers making and using the industry’s products and government representatives have a majority of votes over shareholders. In this way control over industry could be achieved ‘without removing ownership of shares from the existing shareholders and without incorporating all major firms directly into the public sector’ (A Million Jobs a Year, 33).
This halfway house between controls and abolition of the capitalist system of production is seen by Glyn even to have positive benefits because
it can be argued (and presumably Glyn is arguing it here – RM) that such approaches to the control of industry would have the advantage of demonstrating, through the process of struggling to shape the development of the economy, the justification and eventual necessity of the full implementation of Clause IV [the socialist clause in the Labour programme advocating public ownership] (34).
Glyn recognises that ‘nationalisation of all the commanding heights of the economy is the most direct way of asserting society’s control over its resources … the interests of shareholders would be explicitly denied and their power to do so removed.’ Yet for the author of the Campaign Group pamphlet, whether such measures are necessary or at least immediately necessary is a matter of ‘discussion and evaluation’ to be justified during ‘the process of struggling to shape the development of the economy.’
But is the luxury of time in ‘discussion and evaluation’ available to a Labour government which comes to office a major economic crisis, facing outright hostility from the capitalists to any curbs on their decision making? Glyn admits that hostility to controls would be such as to threaten the very existence of the government, let alone its programme of controls. And as he says:
It would be irresponsible to suggest that such a shift (of control) would be achieved as soon as a parliamentary majority had been elected to carry it out. Active support would be required at every step to ensure that the main economic levers were removed from their present controllers (bit by bit apparently) and were operated in society’s interests. Those who currently exercise economic power have non-economic weapons as well, through their influence on the state machine. The history of all previous attempts to transfer control of the economy indicate that the highest degree of active support and commitment would be required from Labour’s supporters to overcome the threat of such extra-parliamentary opposition (A Million Jobs a Year, 35).
But this statement begs several questions. Glyn draws back from advocating the ‘most direct way of asserting society’s control over its resources’ i.e. nationalisation of the commanding heights of industry as well as finance, because he says that it is not ‘immediately necessary’ and could be ‘evaluated and discussed’ as a course of action drawing upon the struggle of a Labour government against the dictates of the market.
But if he draws back from outright nationalisation because he hopes that controls would be more acceptable to big business, then he knows that is ruled out. If the labour movement proposed extensive and effective controls over investment and profits in industry, such policies would be greeted by a howl of reaction from the City and big business, just as great as for advocating public ownership of industry. They would immediately launch a campaign of opposition using the media, the courts, industrial sabotage and, if necessary, state power to block these controls and even to stop a government being elected [that has] pledged to carry them out. If the capitalists will do that to stop ‘controls’ anyway, why don’t we push for the elimination of monopoly capitalism from the start?
As Glyn says, only the mobilisation of the labour movement and the working class as a whole in support of a Labour government implementing socialist economic policies for full employment could enable it to survive. But if that is necessary for a programme of controls why confuse the issue for workers and stop short of a clear explanation that the ending of the private profit system is the only permanent guarantee of establishing full employment and all the social gains that go with a planned economy.
For planning is not possible without control of the economy, and control is not really possible, as we have argued here, without ownership of the productive forces in the hands of the working class. Any halfway house is misleading to workers and will weaken their resolve to fight big business opposition to a socialist government.
That was certainly the view of Andrew Glyn in the Militant pamphlet when he attacked planning agreements as a diversion from public ownership measures:
The attempt to impose the outlines of a socialist plan (production for need rather than profit) on a capitalist economy, which is what planning agreements amount to, is bound to be hopeless while the capitalists still hold the main levers of economic power (Capitalist Crisis, 57).
Public ownership versus controls
Then Glyn did not consider controls versus ownership of industry as a matter for ‘discussion or evaluation’, when he asserted that
only a programme of nationalisation of all the major monopolies would remove from the capitalist class the crucial levers of economic sabotage which are at present concentrated in their hands (Capitalist Crisis, 68).
In that pamphlet, Glyn attacked the ‘piecemeal way’ that the proponents of the ‘Alternative Economic Strategy’ put forward their controls, making them ‘form an easy target for the capitalist media’ allowing them to confuse the working class. In a nutshell, the ‘crucial question’ is: is capitalism to survive or is it not? The answer is not clear from the proponents of the ‘Alternative Economic Strategy’ or from the author of A Million Jobs a Year. As Glyn said in the Militant pamphlet,
If one theme runs through the various points of the Alternative Economic Strategy it is that they attempt to implant in a partial fashion aspects of a full-blooded socialist plan on what would remain fundamentally a capitalist organism (Capitalist Crisis, 68).
And in that earlier pamphlet, Glyn was scathing of those who advocated a step by step approach towards public ownership and planning i.e. ‘demonstrating through the process of struggling to shape the development of the economy, the justification and eventual necessity for the full implementation of Clause IV’ – the words Glyn uses in the Campaign Group pamphlet. He answered that approach in the Militant pamphlet with:
By attempting to go part of the way towards a socialist programme, this strategy is not ‘transitional’ to such a programme, but is transitional to a tremendous disaster. An attempt simply to implement such a programme would be met by the capitalists using the enormous power left in their hands to sabotage the government’s plans. The danger is not just that the ideas of socialism would be discredited in this way, but that the economic chaos which would result would pave the way for a reactionary takeover on the basis of crushing the organisations of the working class, as the Chilean experience makes clear (Capitalist Crisis, 69).
That is the position which Marxists hold to, even if Glyn has changed his views since. A socialist leadership must explain to the working class clearly and from the beginning exactly what is necessary in order to give them the ‘most direct way’ of controlling the economy. That can only be a programme of public ownership, under workers’ control and management, of the financial institutions and major industrial and commercial monopolies (around 200 or so companies). If a Labour government was to follow the policies of the Campaign Group and decide that it is not necessary ‘immediately’ or at all to take over the commanding heights, then it cannot succeed in really controlling the economy. And it will also confuse and weaken workers’ resolve if it changes its programme midstream after the capitalists have been able to sabotage the economy and prepare for political reaction. In such a situation the advantage is with the capitalist class while they continue to hold the levers of economic and political power.
The black history of Chile demonstrates that a socialist government with radical objectives to improve the lot of working people, but with only partial measures of nationalisation and workers’ control, leaves itself open to a terrible defeat.
Perhaps another reason that the Campaign Group pamphlet is unwilling to spell out the need for a full blooded socialist plan for employment may be because it too accepts the myth propagated by the Tories and the Labour leaders that the British people do not want socialism, if it means public ownership. The Campaign Group may want it themselves (or at least most of them), but as the electorate does not, it is necessary to water down what is necessary into what is acceptable.
Obviously there are some grains of truth in the argument that nationalisation is not supported by British workers – after all it is a dirty word shunned by the present Labour leaders. And the reason for that is the bureaucratic implementation of public ownership by previous Labour governments. Nationalisation has been used to save loss-making capitalist industries and firms, to be then run and controlled by unelected bureaucrats, often the former failed capitalists, with the main objective of ‘rationalising’ an industry through redundancies which the private employers did not dare do. No wonder many people see no value in public ownership.
Of course such nationalisation, as we have seen, bears no relation to the measures that would be introduced under a socialist programme which completely abolished the capitalist system of production for profit. With democratic workers’ control and management of industry, workers would be involved in drawing up the plan for investment and production, expanding resources and technique to their full potential and enabling the full employment of all those able to work.
Andrew Glyn is the Campaign Group pamphlet ably spells out what extra resources could be achieved by ending the waste of unemployed workers, idle capital equipment and plant, and by a renewed programme of investment using the latest technology. For such gains to be achieved, it requires a plan of production based on social ownership under the control of the working class, not on capitalism, however restrained by ‘controls’ ‘by one means or another’ (A Million Jobs a Year, p36).
If such a programme was campaigned for by the Labour leaders it would gain mass support. As Andrew Glyn said in his Militant pamphlet, ‘it is not in the least unrealistic to believe in the success of such a campaign once the issues are clearly explained’ (Capitalist Crisis, 80). Moreover, only such a bold and clear explanation of the socialist alternative would produce the necessary resolve from the working people to defeat the inevitable reaction (including violent reaction) that would come from the capitalist class when they see their power under threat. Anything less, as the proponents of the ‘Alternative Economic Strategy’ in the past and the Campaign Group now seem to think possible is a recipe for failure and terrible defeat by the forces of reaction.
To summarise, we have argued that the Campaign Group pamphlet’s principal policy proposals are similar to those advocated by the proponents of the ‘Alternative Economic Strategy’ in the 1970s and early 1980s, namely that a Labour government could direct a capitalist economy in such a way as to provide full employment and other social needs by an extensive series of controls over price, investment at home and abroad, and trade – without the need to implement Clause IV and abolish capitalist ownership of the means of production.
We have argued against that view by trying to show that controls have not and will not work, especially if the capitalist class is opposed to them. If controls are weak to avoid antagonising financiers and industrialists, then they will be ineffective and fail to revive investment and production for need – as the experience of the socialist government in France and in the early 1980s has proven.
If, on the other hand, controls are extensive and firmly applied by a Labour government, or even look like being implemented to threaten the profitability of the capitalist class, then a Labour government would meet the all out resistance of the capitalist class to any measures, using the media, the law and eventually force to stop them being applied.
Our argument here is: why advocate a paraphernalia of regulations to control capitalism rather than abolish it, if it still leaves a Labour government open to a brutal attack threatening it survival? A clear campaign by the labour movement for the implementation of Clause IV by a Labour government would also be resisted by the capitalist in similarly, vicious way, but a programme of public ownership and workers’ management of a socialist plan would be much more likely to win support from working people as it would end the economic power of capitalism in one stroke. Such a programme, if properly explained, would be much more likely to mobilise and encourage the organised working class to defend a Labour government so that the political power of the capitalist class, in the last analysis, its state machine was defeated or neutralised if used against a democratically elected government. Because, at the end of the day, a socialist transformation, and with it full employment, will not be achieved by having the correct set of economic policies (controls or a socialist plan), but by the willingness and ability of working people to struggle for it against a ruling class which will not hand over its privileges without a no holds barred fight.