1940s >> 1947 >> no-517-september-1947

The Crisis: The Planners’ Swansong

Capitalism we know and have long endured. Socialism we could have and will have when a majority understands the need for it. But is there a half-way house, something that has ceased to be Capitalism but is not Socialism? Socialists know that there can be no such thing, but many people both in the Labour Party and outside thought that it was possible and desirable. Not that the Labour supporters of planned capitalism called it that. Indeed they said precisely the opposite—” there is no half-way house between a society based on private ownership in the means of production, with the profit of the few as the measure of success, and a society where public ownership of those means deliberately planned for attaining the maximum of general well-being.” (For Socialism and Peace, Labour Party). Yet that is just what the Labour Party has been trying to do and in the experiment it received the support of many who knew quite well that what they were seeking was to keep capitalism but rid it of its chaotic features and subject it to planning and controls. Among the latter was the capitalist group who control the Economist. In its issue for August 2nd, 1947, the Economist admits that doubts have now arisen. In an article “The Planner’s Last Chance,” we read: “The Economist has long ago committed itself to the view that it is both desirable and possible to have not indeed a detailed control over all economic processes, but a certain measure of purposive direction of the general economic climate. It must be confessed, however, that the experience of the last two years has considerably dimmed that faith. Here was a situation that should have been easy to diagnose and a set of controls already in existence more far-reaching than any socialist planner had ever dreamed of. Yet . . . there can hardly be any room for doubt that it has been bad.”

The article concludes: “But something more than the Labour Party is at stake: the fate of an experiment to which many people who are not Socialists had attached their hopes, the effort to assert man’s control of his economic environment. For unless the planners make haste to plan for realism, the blind forces of economic nature will take over – either because something snaps and the people revolt against controls, or through the massive growth of black markets. It is the planners’ last chance.”

Of course, when the Economist refers to the blind forces of economic nature taking over, what it really should say is that the capitalist system will go its usual chaotic way in defiance of the edicts of those who think to mould it and control it from the backrooms of Whitehall.

What keeps capitalism going is the capitalists’ prospect of selling at a profit the commodities produced by the working class. British capitalism is largely dependent on selling industrial products overseas and on importing cheap foodstuffs and raw materials. The destruction and wastage resulting from the war and the loss of overseas investments severely damaged the position of British capitalism, and at the same time the destruction of agricultural and other raw material production all over Europe and the East caused a big rise of prices of the materials British capitalists have to import.

Thus British capitalism finds itself badly squeezed from both sides. A third factor arises because of the present low level of unemployment. Unemployment is the safety-valve of capitalism because without it wages rise to the point of endangering profits.

The experts in the Labour Party, busily planning for “full employment,” have never appreciated this. If forced to face up to the fact that the threat of the sack is the goad which drives the worker to toil hard making profits for the capitalists, and that it becomes ineffective if there is no unemployment, their answer has been that they would find some other incentive. Socialism will have its own incentive, the knowledge that all are working for the good of all and not for the benefit of the propertied class, but the Labour Party by some mental twist imagine that an incentive that will arise naturally under Socialism could be imposed on planned Capitalism. Mr. Bevin put this point of view in a broadcast to America on April 25th, 1941. Basing his view on a misreading of wartime experience of the Essential Work Order he declared, “a factor that is becoming apparent is you get better discipline and loyalty with fear of dismissal removed than you do by the threat of it.” (Daily Herald, 26/4/1941).

Another misjudgement of the planners arose out of their failure to understand the way capitalism fetters production. Seeing that in times of crisis of “overproduction” there are masses of unsaleable goods, that is to say goods that cannot be sold at a price sufficient to yield a profit, they jumped to the conclusion that capitalism actually produces more than enough to provide adequately for the needs of the underfed and under-clothed working class. This was never true. The Labourites sneered at Marx and failed to appreciate the charge he and other Socialists made against capitalism that because it produces only for sale at a profit and not for human need it prevents the production of sufficient food, clothing and shelter for the needs of humanity. If all the able-bodied population were working, and if all the wasteful forms of activity that are indispensable to capitalism were cut out (e.g. financial operations, armed forces, munitions, bureaucratic activities, etc.), then the production of useful articles could be increased two-fold or more. What the Labour Party did not realise is that these forms of waste really are indispensable to capitalism and cannot be eliminated under capitalism. Planning has actually made some of them bigger not smaller.

Through their error the Labour Party encouraged the workers to believe that under Labour Government it would be possible to “soak the rich” to feed the poor. They published a pamphlet, The Nation’s Wealth at the Nation’s Service (Douglas Jay, Labour Party, 1938) in which this view was put in all its crudity. Quoting figures of the vast income and fortunes owned by the capitalists Mr. Jay said: —

“Here is the available income and capital on which Labour must draw to supply the minimum human needs of the poorest, and to see that no man woman, or child lacks food, clothes, housing, education, or the necessary instruments of civilian, or military defence.”

The rich still have their property, and their gross incomes (before taxation) have increased more than wages. True they are more heavily taxed but this has largely been used to pay for the increased civil service and armed forces – what Mr. Jay calls “instruments of civilian or military defence.” How this feeds the poor it is hard to imagine, unless it is intended to fatten up the civil servants and soldiers in order to eat them later on.

The remedy for the workers’ poverty is not soaking the rich but Socialism.

It has now become a question of only academic interest because the Labour Government soon found out by experience what any socialist could have told them, that you can’t keep capitalism functioning, dependent as it is on profit-making, if your policy results in profit being eliminated. So now we have the Labour ministers telling the workers to work harder, and assuring them that nothing more is to be gained by soaking the rich.

On the Labour Party’s planning in general and on their excuses for the failure of their plans little need be said. We have had scores of plans, constantly changed in each of the several crises, and all the worker has to do is to read in the latest crisis speeches about the new austerities we are to undergo and then consult the Labour Party’s election literature. He will search in vain to find any of these austerities and pains and penalties set out there. The foretellers of our future told us everything except what has actually occurred. The stock excuse is that things have happened that were unforeseen, from the hard winter to the rise of American prices; but that is the crux of the whole matter. If planned capitalism is possible at all then the whole essence of it is that the planners must be able to foresee what is going to happen. If you can’t foresee, then you can’t plan and planning is worse than useless. Equally puerile is the excuse that the planners did not expect things here or abroad to be as bad as they are and therefore only planned for economic fair weather, not foul. In 1879 the Tay Bridge collapsed in a gale and a train plunged into the flood with a loss of 80 lives. Imagine the engineers and designers excusing themselves afterwards with the plea that they only designed the bridge to stand fair weather stresses, not winter gales!

Equally to the point is the fact that the world economic gale of which the Labour Government now complains is partly the result of its own plans. It planned to increase exports and to limit imports and forgot that the more it succeeded in doing this the more the other countries, in self defence, and under their own planning schemes, were trying to do the same, keeping out British exports and encouraging their own exports.

The Economist need not linger in doubt any longer. Capitalism cannot be planned into harmony either by the Labour Government or by themselves.

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