[page 3]
British capitalism's continued decline In order to understand the change, or the attempted change, in the policies of British capitalism it is necessary to see its declining position in relation to the world market and the sickness which has infected it since the end of the Second World War. definitive decay of British capitalism had already begun at the beginning of this century and proceeded apace through the two world However, during the last quarter of a century, the process Spring 1971, R. Mokee has compiled some valuable material from which we quote extensively in this editorial. "It is well known, even to the most casual observour that British capitalism has failed to match the performance of its major conpetitors on the World Market: and since 1963 the situation has deteriorated further:- Not only in production but even more important in capital wars.
has been speeded up.
U.K.
1963 100 123 1970 worked out by Postan:- Editorial:
1949-62 U.K.
Italy ..
W. Germany France OECD EUROPE 100 141 formation Briti an has been lagging behind.
16% U.K.
20% France In an article in "The Socialist Student" of % Annual Rate of Growth in real GNP •.
6.8% •.
(Postan - Economic History of West Europe) World Industrial Production Indices 1963-70 USA 100 145 (N.I.E.R., October, 1970)"
Capital Formation as % of GNP since the War Germany •.
Italy The 2.5% 6.0% 4•8% JAPAN 100 222 Mokee quotes the figures 16% 22% 1.
[page 4]
The capital/labour expenditure ratin as a percentage of the This means that much of British industry's machinery is old and obsolescent ..... What Marxists call the rate of surplus value in Britain is considerably lower than other advanced capitalist countries. (These figures are probably underestimates, on using different assumptions than Loftus the rate of surplus-value for the USA Thus Britain is steadily losing out in relation to her compat- All the measures of the Governments, both Tory and Labour, have not been able to arrest the tendency for the rate of profit to decline, le. the surplus ot unpaid labour in relation to the amount invested in capital (machinery, raw materials, buildings), and variable "Here is the evidence of three indepedent sources:- Rates of Return to Net Assets of Manufacturing Industry in U.K. These figures are a stark indictment of British capitalisn in the post-war period. They are an indication of the sickness eating at and the clique controlling the Tory party, to carry out the liberal instructions of the CBI in order to restore the rate of profit, have Growing unemployment and bankruptcies, a fall in the rate of investment, ever below the catastrophic figures of the last years, plus an accelerating inflation which it was supposed to cure! Ü.K.
works out at 133.1%)".
itors.
1949-63 1951-66 1957-67 the vitals of British society.
class indicate their alarm.
alarmed the latter.
2.
United States ratio is very revealing:- 92% Norway 67% Belgium 65% Denmark 62% Holland -= 88.6% Japan capital (labour power), has declined:
54% French 52% Germany 44% U.K.
36% Italy.
(Fortune, January, 1970) Estimates of Rate of surplus-value in selected Countries 1963 U.S.
170.0% (G. Loftus - Iloyds Bank Review, April, 1970) 18.7% to 12.7% 23.3% to 12.0% 9.3% to 6.9% 108.3% (Economist) (Economic Trends) (Financial limes)"
The measures taken by the ruling.
But the attempt by Heath, Barber, Davies,
[page 5]
Not only this, but the attempt to drive up the rate of profit, through the attempt to shackle the unions, has provoked the biggest movement of the workers since the twenties, apart from the General Strike, the biggest strike were ior fifty Jears. "regulate" the economy, has failed disastrously, as is inevitable under capitalism, except temporarily the exigencies of an actual war.. hus the measures of the Wilson Goverment too resulted in the stagnation of The devaluation of the pound, far from solving the problem, has made matters worse by accelerating the already existing The attempt by the Tories to return to the good old days of laissez-faire, of nineteenth century capitalism, were doomed in the present day world to aggravate rather than solve the problems. ruling class leels the burden of state expenditure and taxation as a monstrous weight tied to the back of the productive system. the other hand, large sections of industry have looked to the state for the products of industry, especially the engineering industry. is not much use restoring a few percentage points of profitability to industry, if at the same time the measures taken reduce the market and consequently cut into the profitabiliry of industry from that side If the rate of profit is low, ther the capitalist will not On the other hand, it the market dininishes, then the capitalist will have no incentive to invest in order lo increase production when the machinery he already has can supply the market adequately. It is these two sides of the problem that have undermined and negated the policies of British capitalism in the post war period. not been for the enormous expansion of the world division of labour, and the increase of world trade in the last quarter of a century, even the miserable rate of growth that sclerotic British capitalism has produced, the lowest of all industrial countries in the world, During the last six years, the increase in investment combined has only been 10%: The measures of the Tory Government, far from increasing, will result in an actual dron, even of this minuscule These will further weaken British Capitalism in the decisive resources in the reduction of the peasant sector, a survival from feudalism, long since eliminated in Britain, or in the case of America of the employment in agriculture, which also dropped substantially. However, this would not have been possible except for the enormous expansion of the world division of labour through the expansion of of British capitalism.
production.
inflation.
for lavish handouts.
But whichever way they turn, invest.
would not have been maintained.
growth.
section of world trade.
world trade.
The attempt to tinker and "manage" or The state remains one of the biggest markets the capitalists find a new dilemma. It The rivals of British capitalism found Hence the dilemma The But on Had it 3.
[page 6]
Recessions or small slumps during the whole of this period since the war, have merely been incidental interruptions to the enormous economic upswing, which in its turn has intensified, not only the interdependence of all countries in world trade, but the crushing domination But it is here that the Achilles heel of British capitalism is Her share of world trade has been steadily dropping since 1950. She has difficulty even in defending the home market from foreign competition, because of the lower investment in capital There are only two ways in which this could be solved: an increase in the exploitation of labour, resulting in an increase rate of profit (but alas, this meets with the resistance of the working class, and therefore further exacerbates the problem); or alternatively a massive programme of capital investment - but this is a mirage for British capitalism, for the reasons explained above. Meanwhile, in all the industrialised countries, the problem of the falling rate of profit and of inflation is affecting even the most italism is showing itself first of all in the strongest capitalist ionism in America poses dangers in front of world capitalism. Protectionism is always followed by protectionist reprisals. Instead of the spiral of world trade going upwards, the turn towards protectionism of any of the major powers, especially America, the strongest industrially and the biggest market, would turn the spiral downwards. These ominous trends are the shadow of approaching events. For the moment it is most likely that America and Japan will arrive barriers, which was a result of the development of world trade, and in its turn acted as a spur to further development, under such circumstances would dry up. In recoil from the world market, the different national capitalisms would look for safety to their own home market expansion of the industrially developed countries lay in the increase But this very increase means that once world trade begins to shrink, then the mainspring for capitalist advance on which all the other factors have been dependent, will be removed. Consequently, the very process of world development in itself contained all the contradictions inherent in capitalism. recessions or slumps, and over the long term a new depression like The attempt by Britain to enter the Common Market, whether successful or not, cannot solve the problems of British capitalism. Entry now will be too late to achieve the results which it had for of the world market over all countries.
fatally exposed.
equipment.
successful rivals of British capitalism.
power, the United States of America.
at some sort of compromise.
and thus a trade war would commence.
in world trade.
that of 1929.
the Cormon Market countries.
the results that we have seen.
4.
The sickness of world cap- The tendency towards protect- But the steady reduction of tariff The key to the world-wide This will mean deeper On the other hand "independence" has
[page 7]
The Labour Movement can no longer allow itself to be drugged by the panacea of "managing" capitalism, with which Wilson and other Labour leaders entered the Government in 1904. Ine hankering after "incomes policies" by the ex-ministers of the Labour Party shows that they have learned nothing from the experiences of the last Labour They failed utterly in their attempt to reform capitalism, or to make it work more efficiently. New attempts on these adopted by the Labour Ieaders. The problem of inflation is the Neither inflation nor deflation are in the interests of the working class. Both are conditions of the economy which the capital. ists utilise to try and squeeze more surplus value out of the working class. Both are a snare and a trap as far as the interests of the working class are concerned. The choice between the two for the working class are the difference between suffering from thirst or For the Labour Movement and those who claim to theorise in its interests, it is a question of breaking away from posing capitalism and its ills as eternal and showing a new path to the Labour The attempt to square the circle of capitalism must be aban- This is a feat which neither Wilson nor any other magician, reformist or Tory, can accomplish for British capitalism. Labour workers will inevitably come to see that the solution to their problems lies in what the Party leaders would term "old-fashioned The nationalism of the means of production, with minimum compensation on the basis of need, is not a demogogic programme, but a completely scientific one. Only thus could the resources of Britain be really computerised and planned. The monopoly of foreign trade, which will be introduced simultaneously, will be a powerful weapon in the hands of a British workers' democracy. unleashing and harnessing of all the resources of the Trade Union and Labour organisations, of a highly educated working class, the use of all the scientific resources of technicians, scientists and engineers; plus workers' management of industry and the state, would be an economic programme of epoch-making proportions. The decline of British capitalism threatens to engulf the working class, its organisations and its living standards. very strength of the workers' organisations which in an ironical way gave a certain stability to British capitalism in the last halfto crush the working class at this stage. While relatively the position of British capitalism on a world scale has suffered a steep decline, Government.
lines would be even more diastrous.
or smal stumps, ie. "recessions"
problem of capitalism.
getting large supplies of salt water.
Movement.
doned.
Socialism".
century, now turns into its opposite.
The problem of booms and slumps , cannot be ironed out by the method:
The The The ruling class is too weak 5.