50 Years Ago: The Devaluation of the Labour Party

The devaluation of the pound after repeated denials by Cripps that it would be devalued, is a symptom of the mental bankruptcy of the Labour Party. Gone is the easy optimism of 1945, when they were confident they could control and plan the capitalist system. Now all can see that capitalist forces are in control, driving them from one panicky expedient to another, all of the methods resorted to by Liberal and Tory Governments in past crises. (. . . ) “Fact”, the Labour Party Bulletin, for August, 1949, was even more unlucky. It came out against devaluation only a few weeks before Cripps introduced it. This is what it said:- “Thus if devaluation succeeded in closing the gap (which is doubtful) it would do so by lowering our standard of living. The pound would buy less in Tooting and Bradford, as well as in New York and Winnipeg. Devaluation is therefore an alternative to wage-slashing as a device for cutting our prices at the expense of the mass of the people” This was a boomerang indeed. Capitalism offers to those who administer it just such choices of evils as the one mentioned. Having to choose between devaluation (with higher prices and frozen wages) and wage-slashing, the Labour Government chose devaluation in order to avoid a headlong clash with the workers. The clash is not avoided, only deferred. (From Socialist Standard, November 1949)