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Has the Labour Party lost its way?

With trade unions and left wingers now talking about the re-formation of a Labour party, socialists ask why bother? The history of the Labour Party has been one long disaster for the working class. The short answer to the question of whether the Labour Party has lost its way is, no. Because what is currently the direction of its leaders has been part of its thinking throughout its existence. In power, as now, Labour has been a radical liberal party. This has not been a betrayal of its core principles or "values" but reflects its origins.

New Labour's obsession with neo-liberal economics might seem like something of a new departure but the early Labour Party was tied to liberalism in a similar way. This argument should not be taken too far, as at least the collectivist currents in the early Labour Party made it feel like it was part of a movement to create a better society and many thought they were working towards a vaguely defined socialism. A collection of anecdotes of life in the Labour Party, Generating Socialism (Sutton, 1997; edited by Daniel Weinbren, foreword by Tony Benn, who else?) shows that many Labour members, however mistakenly, thought that socialism could be reached through Labourism. The optimism which could hold with Labour's "rise" up to the mid-twentieth century, has turned into a marked pessimism associated with the supposed decline of the working class.

Nonetheless, the Labour Party was established not for socialist aims but to achieve political representation for working men. It was related to class struggle in that despite the trade unions' reluctance to break away from the Liberal Party, industrial militancy and the Taff Vale decision which put their funds in danger meant that a strong feeling developed on the need for independent "Labour" representation in parliament. However, its socialist credentials were weak, as the Social Democratic Federation acknowledged when it withdrew from the Labour Representation Committee (which became the Labour Party in 1906) in 1901. Its social outlook was informed not by class-consciousness but, on its left-wing, by ethical protest at poverty and inequality as "wrong" and, on its right-wing, by an awareness that social dislocation caused by unregulated capitalism effected economic (capitalist) efficiency.

The Labour Party struggled to gain wide electoral support during its first ten years, gaining around fifty MPs by 1914. Its big break came with the first world war, which split the Liberal Party. Labour was active in the national government, supporting the war, but not tainted being tainted with its results. By the early 1920s, the Labour Party had emerged as the "progressive" party in British politics. While attracting such ex-Liberals at this time as Clement Attlee, it refused the affiliation of the Communist Party.

So why has the Labour Party been associated with the name of socialism? Largely because of its history of supporting nationalisation, often misleadingly called "public" or "social" ownership. This was the major problem for socialism in the twentieth-century—the standard dictionary definition being that nationalisation is socialism. The Labour Party's commitment to nationalisation of the means of production, distribution and exchange dates from 1905 but was adopted most famously in Clause IV of its 1918 constitution. Its acknowledgment that exchange would continue after nationalisation demonstrated that the wages system, and thus capitalism, would continue after nationalisation, albeit state-run. In effect Clause IV was translated as state ownership of the "commanding heights" of the economy. Quite what was hoped to be achieved by bringing industry into state instead of private ownership was not very clear apart from as a vague and fuzzy means to "greater equality".

With central planning nationalisation was supposed to transform capitalism into something that could be controlled by the state. This did not happen of course. On transferring coal, steel, iron, fuel, power and transport to state ownership after 1945, the performance of British industry in the world market still continued to decline and the state sector remained an arena of industrial struggle. The remarkable blind faith of the Labour Party in nationalisation was reduced from the Attlee government onwards. Sadly, this decline in the faith of nationalisation has been represented as the death of socialism.

There are still some in the Labour Party and in the various left-wing organisations who claim that vast swathes of British industry should be re-nationalised. This is why many see "New" Labour as a dramatic break with "Old" Labour. Jim Mortimer (an ex-Labour Party general secretary) describes New Labour, in a recent pamphlet The Formation of the Labour Party - Lessons for Today (2000), as apologists for capitalism and the new Clause IV as "a symbolic change to mark the abandonment of Labour's traditional advocacy of a widening area of social [state] ownership". However, as socialists, we would prefer to see declining faith in nationalisation and the Labour Party as a positive development. The results of Labour governments are no longer clothed in the misleading garb of collectivism but show what they essentially are—managers of capitalism. Electoral imperatives, present from early in Labour's existence, have triumphed over reforming rhetoric.

It is often argued that state welfare and social security provision are examples of Labour's success in "doing something", legislating against poverty and providing municipal housing and so on. Such measures have no socialist credentials but, on the contrary, were developed in their post-war form by the Liberal Beveridge. Moreover, regulating legislation has been a feature of all capitalist government since the Factory Acts of the 1840s. The simple case is that systems of social welfare do not change the exploitative character of capitalism or even touch the surface of its symptoms. Poverty has not been reformed away and poor housing, unemployment, job insecurity and related ill-health remain very real concerns for the working class. In fact, New Labour, rather than betraying Labour's welfare extension tradition, has merely continued previous Labour retrenchment begun in the 1970s.

The democratic record of the Labour Party reads equally dubiously. It has always had a very limited acceptance of party democracy. The block vote, for example, allowed the trades unions to dominate the party conference, initially to the advantage of Liberal moderates but more recently to that of the left-wing, whereupon it was replaced. Also, Blair is not new in being a "strong" leader. Before 1922 the Labour party did not have a formal leader but a series of chairmen. After Ramsay MacDonald assumed chairmanship in 1922, however, the party adopted a leadership that exercised strong control over the party, especially as the Parliamentary Labour Party did not, and still does not, have to obey its conference. As has often been observed, the Labour Party has always had a strong cult of personality, of loyalties and bitter rivalries over who was best to lead a passive working class.

At its formation and in its early years the Labour Party had little connection with the growth of a socialist minority or even with the more militant sections of reformists. There were always some trying to build a "fairer" society but what emerged from years of effort was not a slowly evolving socialism but a Labourism which increasingly judged itself on its electoral success, which depended on its ability not to rock the capitalist boat it was trying to steer.

Those who want another century of reformist advance and retreat can go ahead and form a new Labour Party. Those who, learning from the failures of the past, desire the socialist alternative should join those who have rejected reformism and sought instead to make socialists and work for socialism-and-nothing-but.