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From International Socialism, No.19, Winter 1964/5, pp.1-2.
Transcribed & marked up by Einde O’Callaghan for ETOL.
Labour’s overall strategy is as clear as it is cynical. The first task was to soothe Capital’s nerves. ‘Profits,’ said Douglas Jay, President of the Board of Trade, five days after the election, ‘provided they are earned by efficiency and technical progress and not by restrictive practices or by abuse of monopoly, are in my view a sign of a healthy economy.’ ‘We have no prejudices against market mechanisms when they are efficient’ added James Callaghan, Chancellor of the Exchequer, a few days later at a Mansion House dinner; ‘it is not our job to make it more difficult for you to make a living’ (upon which The Times City Editor commented: ‘the Chancellor did much more than he need ... to hold out the Government’s hand of friendship to the City’). And the inimitable George Brown, Minister for Economic Affairs, summed it up with all the crudity only he can muster: ‘We in the Government want private enterprise to flourish.’ Backing the sentiments went a studied inactivity and vagueness, about the most important of the promised measures affecting business: there would be a capital gains tax, but not until the Spring, not retrospective and of indeterminate severity; steel would be renationalised, but not the profitable engineering operations of the firms, not until the Spring and at an unknown price; there would be a Crown Lands Commission, but not until ...; and the Rent Act would be repealed, but ... Road transport has been passed over, public schools are to remain, as is the whole range of Tory foreign policy principles from acceptance of the MLF to pursuit of the dirty wars in Malaysia and Yemen, the retention of the ‘deterrent’ as a bargaining counter and the police regime in Guyana. It is hardly surprising that stock markets have remained buoyant since the election.
Alas, not many people see the strategy for what it is. For, with one eye cocked on its narrow majority and the apathetic electorate beyond, and the other on the mounting flood of wage demands which have flowed uninhibited by the Government changeover into direct action, Labour has exerted every nerve to project a humane, reforming image. Hence the promise to outlaw racial discrimination and the attack on the racist Tory Member for Smethwick, the stay on evictions, the abolition of prescription charges, the increases in pensions and in income tax rates. That the racist Commonwealth Immigration Act is confirmed; that rents are still rising, the repeal of the Rent Act postponed and its terms vague; that the heavy charges for dentures, spectacles and hearing aids remain; or that the pensions increase is postponed till beyond the Winter, is tragically inadequate in any case and will be even more inadequate after the present wave of price rises gets going; that the future increase in business taxes will not need paying until 1966-67, and is largely offset by export subsidies, investment incentives and such like – are all unimportant for the moment. The measures ignored are still not widely noticed; the measures taken appear radical, and the Government remains popular. If the only reason for Labour’s sunny smile was to divert attention from its vanishing tail of real reforms, it would be bad but not alarming. One or two electoral shocks and the tail would reappear. But there is more to it. Without a radical change in policy and commitments, that would include at the very least the abandonment of the arms budget and the associated alliances, and widespread nationalisation under workers’ control, a Labour Government is entirely dependent on Capital’s goodwill in trying to solve the economic problems it has inherited, particularly the problem of growth and competitiveness in world markets. Since such a change in policy is clearly not on, as much because of the non-intervention of the working-class as the con-formism of the Labour leaders, the resources for economic growth must somehow be found in the working class. Somehow there must be more production without proportionately higher wages. Somehow ‘restrictive practices’ at workshop level must be rooted out and workers corralled in an incomes policy/wage freeze. But how? The workers are patently suspicious and need coaxing. Trade-union leaders, pant as they might to adopt a ‘statesmanlike attitude’ and gain the usual rewards, dare not under the circumstances embrace the wage freeze/incomes policy without reservation. They must be able to echo Callaghan’s budget speech with some conviction; to say ‘when the nation is being called upon for fresh efforts our people [must] have tangible evidence that even in times of economic difficulty ours is a society where the weakest and neediest are cared for.’ And they must be able to show some gain, however small, when they bring their members to the corral.
This is not easy. The gains must be real in proportion to the suspiciousness of the workers. But the larger they are the more jittery does Capital become, and no amount of explanation or soothing talk about long-term expediency will do. After all, prisoner though it is, Labour is not their party. Labour does have an alternative pillar of support. Concessions to workers therefore do raise the spectre of anti-capitalism. Here then is Labour’s problem: if workers’ suspicions are to be allayed, Capital’s are sure to grow. And the cost of loss of confidence in that quarter is slow economic growth and a perpetuation of the current crisis. It is to solve this aspect of the problem that Labour has concocted its mixture of verbal intransigence and vagueness about practical details. If workers can be persuaded by radical noises and minor welfare measures to permit their union leaders to sign a wage freeze/incomes policy agreement; if at the same time Capital can be made to feel that their behaviour during the current round of bargaining about this agreement will affect significantly the details of future legislation affecting business, that open-handedness will be rewarded sevenfold, the Government will have succeeded in its central aim. Capital, whatever its suspicions, will have been brought to disgorge something; trade-union leaders will have that something to flourish in front of their suspicious members and the shift from wages to profits will have begun.
For depths of cynicism there can be little to beat this strategy. Labour can never have used welfare so exclusively as a means for subordinating the workers to Capital and corroding the independence of their organisations. Socialists can have none of it. There is no current circumstance – none whatever – in which wage freeze/incomes policy can be justified. There is no short term tactic of any validity that can command even the most heavily qualified support for it. On the contrary its rejection, whenever, wherever and whoever by should attract our immediate, unquestioning support. Rejection of further wage control should be at the centre of our efforts.
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