Labour Capitalism

The Labour Party is not and never has been a socialist party. As we record in this issue, most Labourites have seen “socialism” as either nationalisation or some milder form of what exists in Russia. They have, in other words, confused socialism with state capitalism. Some, it is true though more in the past than in recent times, have like us wanted a society based on common ownership, democratic control and distribution according to need, except that they saw this as coming about through a series of piecemeal reforms introduced by Labour governments.

This attempt to introduce within capitalism what will undeniably be features of socialist society –such as free public services and the abolition of unearned income from shares –was bound to fail as it took no account of the fact that capitalism cannot be reformed to work other than as a profit-making system governed by blind economic laws. The economic operation of the capitalist system has meant either that these reforms have eventually been undermined or that they have had unintended side-effects. At the same time Labour governments, having come into office under capitalism, have had no alternative but to preside over the running of the capitalist system in the only way that it can: as a system in which profit-making takes priority in all fields over meeting needs.

Aneurin Bevan once described the National Health Service as “pure socialism”. He was wrong, but for the right reason. Wrong because you cannot have bits of socialism within capitalism, but right because health care in socialism will be free. The free NHS began to be dismantled, under economic pressure of capitalism, even by the Labour government that had introduced it, and the free aspect has been whittled away ever since as successive Tory and Labour governments have introduced more and more charges.

Earlier Labour theorists, such as R. H. Tawney, saw Labour’s role as to suppress unearned income, correctly regarded as a tribute levied by property-owners on the rest of society, by gradually taxing it out of existence. As, once again, socialism will indeed be a society in which shareholding will have no place, the higher taxes on unearned income by Labour governments were sometimes presented, wrongly, as a step towards socialism.

Now such pretences are to be dropped. The Policy Review document to be adopted at this month’s Labour Conference shows that the Labour leaders, eager to get their hands on the reins of office, are preparing to accept capitalism as it has evolved in Britain – a profit-driven market economy providing unearned income for those who own the means of production –and to abandon the attempt to impose on it isolated features of a socialist society.

The document has to be read to be believed. It opens with an introduction by Kinnock in which he states that Labour’s aim is to help “make the market system work” and goes on to talk about Labour’s priority being to establish “an internationally competitive economy”, achieving “success in the marketplace”, and creating “a new partnership with business”.

This does not represent the abandoning by Labour of its socialist principles (that would be difficult since it never had any), but rather the tacit recognition by Labour of the failure of the strategy of gradually trying to reform capitalism out of existence which, at an earlier period, was accepted by many in the Labour Party. Not only have the actions of Labour governments not brought socialism one step nearer, but instead of Labour gradually changing capitalism it is capitalism that has gradually changed the Labour Party.

As socialists who predicted this failure, we draw the lesson that the only way to get to socialism is to work to build up a political movement dedicated to ending capitalism by bringing all the means of production, in one go and without compensation, into common ownership by all the people. For us, the failure of gradualist reformism vindicates the need for a social revolution, to be carried out by essentially peaceful, democratic means, from class ownership and control and production for profit to common ownership, democratic control and production for need.

The Labour leaders, opportunist politicians that they are (but then, as professional politicians, their main ambition in life has to be to achieve ministerial office), have typically drawn a different conclusion. They want to abandon the failed reformist strategy, but in favour of accepting capitalism as it is, market, unearned incomes and all.

This is not a development that need surprise since ideology can always be expected to sooner or later come into line with practice-and Labour’s practice when in office has always been to accept capitalism and its logic. Every Labour government has worked with private business and has accepted that capitalists must be allowed to make profits (indeed, has taken steps such as freezing and restraining wages to ensure that they did). It is just that at this year’s Labour Party Conference we shall be witnessing the precise point in time at which the gap between ideology and practice which has existed up to now will be closed, with Labour accepting a new ideology that conforms to what has long been its practice.

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