Questions of the Day (part 16)

Inflation and unemployment

IN THE LAST QUARTER of the nineteenth century, during what was known at that time as The Great Depression, and again in the depression between the two world wars, an increasing number of workers — and even some professional economists — were paying attention to the analysis of capitalism made by Karl Marx in his work Capital. Marx showed that unemployment, and its rise to peak levels in periodical phases of trade depression, arise put of the structure of capitalism itself, and are therefore inevitable while capitalism lasts.

This growing interest in Marx was all but extinguished with the publication in 1936 of J. M. Keynes' The General Theory of Employment, Interest and Money. According to the new doctrine it only needs that the government "manage the economy in such a way as to maintain demand" for full employment to be created and trade depressions to be abolished.

Keynes described Marx's Capital as "an obsolete economic textbook, which I know to be not only scientifically erroneous but without interest or application for the modern world" ("A Short View of Russia", J. M. Keynes, 1925. p 14). Keynesian doctrines were accepted by most economists, political parties and the trade unions. Writing in 1957 (Remedies for Inflation) Mr. (now Sir Harold) Wilson stated that the Labour Party and all other "major parties" were Keynesian. As late as 1974, in spite of the evidence that Keynesian techniques had been a failure, the Tory M.P. Mr. Peter Walker called his party "the party of Keynes and Disraeli"; while the Liberal M.P. Mr. John Pardoe said that the Liberal Party is "the party of Keynes and William Beveridge".

Alone in this country the Socialist Party of Great Britain insisted from the outset that Marx was right; that the new doctrines were fallacies; that full employment cannot be maintained; that trade depressions cannot be eliminated, that the remedies proposed were only disguised inflation and would do nothing to serve working-class interests.

The Labour Party adopted the new policy at its Annual Conference in 1944, in a Report on Full Employment and Financial Policy, which declared:

"If bad trade and general unemployment threaten this means that total purchasing power is falling too low. Therefore we should at once increase expenditure .... We should give people more money and not less, to spend."

The Tory Party was committed to a similar view; but such was the confusion created by Keynes' theories that neither Party recognised that this is a policy of the crudest inflation. So at every general election in the post-war years they continued to declare their opposition to inflation. Both parties pledged themselves to maintain "full employment", defined in the Labour Party's 1945 General Election programme as "Jobs for All".

In the history of capitalism, as Marx had explained, periods of good trade and low unemployment alternate with periods of bad trade and high unemployment. One such period of low unemployment occurred in the years immediately following the second world war (helped by work on making good war damage); but Labour and Tory Governments both claimed this to be evidence of their success in "managing the economy". From 1955 onwards, however, unemployment has been on a sharp upward trend, each peak of unemployment rising to a higher level — to 747,000 in 1963, to above a million under the Heath Government in 1972, and to 1,500,000 in 1976 under Labour Government, and to over 1,600,000 in July 1977, This was capitalism operating in its normal way; but it led many who had wrongly believed that Keynesian techniques would abolish unemployment to reach the false opposite conclusion: that it was those techniques that had been the cause of unemployment. The Times,13 February 1976, told its readers that "unemployment ... will decline as fast and as soon as we all forget Keynes".

But if Keynesian policies did nothing for unemployment, their effect on prices was that by 1977 the general level was ten times what it had been in 1938, and was rising fast.

Inflation is caused by governments going on year after year printing and putting into circulation hundreds of millions of pounds of additional paper money.

Wherever and whenever currency has been issued in excess, the price level has risen; and wherever and whenever currency has been restricted, prices have stabilised or fallen. In the period 1920-23, the printing presses of the German central bank were busy day and night pouring out notes, and prices were rocketing upwards. In Britain in the same three year period the Government had decided to halt inflation; the note issue was restricted and prices were falling fast.

Inflation is not the only factor affecting prices. In Britain, in the 90 years before 1914 when there was no inflation (the price level in 1914 being below that of 1820), prices rose moderately in trade booms and fell again in periods of bad trade, a process also explained by Marx.

The reason there was no inflation in Britain in the century before 1914, was that through the operation of the gold standard the note issue was controlled. Beyond a fixed low limit the Bank of England could not issue additional notes without adding an equivalent amount of gold to the reserve in its vaults. Also the notes, by law, were freely convertible into a fixed amount of gold — one pound or a sovereign being fixed at about a quarter of an ounce of gold. Gold coins and Bank of England notes both circulated; but because of legally enforced convertibility a Bank of England note "was as good as gold", and the combined circulation of notes and gold coins was equivalent to the circulation of a total amount of gold.

Marx showed that if that total amount of gold is replaced by inconvertible paper money, and if the amount of that paper money is then issued in excess, prices are pushed up accordingly.

"If the quantity of paper money issued is, for instance, double what it ought to be, then in actual fact one pound has become the money name of about one-eighth of an ounce of gold instead of about one quarter of an ounce .... The values previously expressed by the price £1 94 will now be expressed by the price £2" (Capital, VoL 1.
Allen & Unwin Edition, p. 108).

Governments since 1938 have followed the policy of continually increasing the amount of currency in circulation, from under £500 million in 1938 to over £7,000 million in 1977, an increase far beyond any increase that would have been necessary because of the expansion of total production and trade. In 1976 and 1977 when the Government claimed that its "wages and incomes policy" would curb inflation the flood of additional paper money went on without interruption.

The man, more than any other, who was responsible for abandoning the nineteenth-century policy of controlling the amount of paper money was J. M. Keynes, who declared that it was no longer necessary "to watch and to control the creation of currency".

So for 40 years the major British political parties and the trade unions have been misled by the Keynesian policy of inflation into believing that capitalism could be rid of unemployment and trade depressions. It failed as it was bound to do with the market conditions and 'free' labour conditions of the western world.

Marx showed, and subsequent events have confirmed his analysis of capitalism's economic laws, that, arising from capitalism's inescapable anarchy of production, its progression is the cycle of moderate expansion of production and sales, then boom, then crisis, then depression. But just as there is no Keynesian device which will secure conditions of permanent boom, so there is no such thing as a permanent depression or "collapse of capitalism". (In the middle of "The Great Depression" Frederick Engels, three years after the death of Marx, did temporarily hold that Marx's cycle had ceased to operate and put forward a theory of "Permanent Depression"; but events soon showed this to be wrong and he returned to Marx's view — Preface to Capital 1886.)

In a depression, with bankruptcies which remove competitors, stocks of unsold goods disposed of, wages restrained by unemployment, and raw material prices and interest rates forced down, sooner or later conditions return restoring prospects of making a profit and capitalism expands again: but only to repeat the cycle. There is, however, one kind of 'collapse' that can occur, a collapse of the currency if the excess issue is expanded to the point where the currency as Marx put it "falls into general disrepute", and nobody wants to hold or receive paper money.

Although he only half understood the problem, such a situation was foretold by Herman Cahn in his Collapse of Capitalism published in 1919. What he foretold as inevitable, like an "Act of Nature", was that "within a few years" (or within a year if the war continued), there would be collapse and "social chaos"; out of which, though the workers were not prepared for it, Socialism would arise.

A currency collapse was at that time on the way in the great German inflation (by contrast the British Government had decided in that year to halt it). By December 1923 inflation in Germany had reached fantastic proportions and unemployment had risen to 30 per cent of workers registered as unemployed, an unknown number not registered, and 42 per cent on short time. There was indeed "social chaos" while a new currency was issued and conditions got back to normal. But chaos does not produce Socialism. In Germany it helped to prepare the way for the rise to power of the Nazi Party under Hitler.

The situation in Britain in 1977 is that, although Keynesian inflation has lost many of its adherents, the Keynesians have not given up the struggle. Under the name of 'reflation' it is still being pushed by the T.U.C., by some professional economists, by Labour Party leaders and by some of the Tories and Liberals. (Most of the 'Left-wing' organisations are all for it.) If the inflationists have their way they could produce a currency collapse here. The dilemma of all parties is that if they abandon the Keynesian belief that unemployment and depression can be eliminated under capitalism, what can they do except face the alternative — fearful for them — of getting rid of capitalism?

Some politicians and economists are now urging a return to the nineteenth century gold standard in order to get rid of inflation.

It only needs to add that getting rid of inflation is not the answer. Capitalism without inflation, as in the nineteenth century, no more solves working class problems than does capitalism with inflation, as in the years since the end of the second world war.

Further Reading

Marx versus Keynes SPGB education document
The Marxian Theory of Inflation SPGB education document
the Edgar Hardcastle Internet Archive

Questions of the Day (part 10)

The so-called Left-wing parties

DURING THE NINETEENTH CENTURY all kinds of political action were discussed and advocated by various working class groups: political strikes, armed revolt, sabotage, bomb-throwing, assassination, demonstrations, petitions to Parliament, and seeking the help of the Liberal and Tory Parties.

With the extension of the franchise to male workers with the Reform Acts of 1867 and1884 a new phase opened. It was then that parties were formed, claiming to be socialist, that were to have a continuing influence on working class politics: the Fabian Society and Social Democratic Federation in 1884 and the Independent Labour Party in 1893. Unsound theories from the early nineteenth century or thrown up by the new parties are still to be found in the modern so-called 'Left-wing' organisations.

Like the modern 'Left-wing' organisations all three parties claimed to seek the abolition of capitalism and the establishment of Socialism.

In 1893 the Fabian Society and the Social Democratic Federation (S.D.F.) signed the 'Manifesto of English Socialists' which declared:

"We look to put an end for ever to the wages system, to sweep away all distinctions of class, and eventually to establish national and international communism on a sound basis".

The I.L.P., which was then in process of formation, did not sign the Manifesto but would not have dissented from its declaration. Keir Hardie, founder of the I.L.P. (later to become 'father of the Labour Party'), could still claim several years later that their aim was "free communism in which . . . the rule of life will be: From each according to his ability, to each according to his needs" (From Serfdom to Socialism, 1907). Also that "The Labour Party is the only expression of orthodox Marxian Socialism in Great Britain" (My Confession of Faith 1910). Of course this was said to placate his followers and there was nothing in the Labour Party to justify it.

What separated the three parties at the beginning was their conception of how their aims were to be achieved.

Through the dissemination of specialist information amcng politicians and administrators, the Fabians hoped to enlighten political opinion generally on the need, step by step, to introduce measures of social reform and nationalisation — the policy known as 'gradualism'. The S.D.F. aimed to build up an independent socialist party based on Marxist ideas. It soon learned, from the very small number of votes given to its candidates at elections, that no quick growth could be expected on that basis. Seeing this the I.L.P. concluded that straight socialist principles were unacceptable to the workers and decided that growth of membership must come before growth of socialist knowledge. They adopted the policy of building up a non-socialist membership on a programme of reforms with the hope that acceptance of socialist ideas would come later. It was the policy of involvement and support for every demonstration of discontent in the trade unions and elsewhere: "getting with the workers in the day-to-day struggle", no matter how trivial the issue.

The S.D.F. also became affected by this policy which in 1904 was to lead to the breakaway movement establish¬ing the SPGB, based on frank acceptance that winning over the workers to socialist principles is a difficult and slow process. It was made more difficult by the refomist propaganda of the Fabians, the I.L.P. and the S.D.F.

At the end of the century all three of those parties, particularly the Fabians and the I.L.P, turned their attention to building up a mass party with trade union backing — the Labour Party.

The I.L.P. line appeared to succeed beyond even what had been hoped from it. Backed by trade union votes and money, the Labour Party grew in membership and representation in Parliament, and I.L.P. influence seemed to grow with it. After the 1929 General Election more than two hundred Labour M.P.s were members of the I.L.P.,
though most were Labour, not I.L.P. nominees; but by that time the Labour Party leaders and trade unions had no further use for the I.L.P. What it had done was to bring about its own destruction. Its original justification for its policy — that of converting the Labour Party into a socialist party — had been a total failure. The Labour Party has made no progress whatever towards understanding and accepting the socialist objective defined at the outset by the Fabians, the S.D.F. and I.L.P. Today this applies equally to the 'Tribune Group' and others in the Labour Party who style themselves 'Left-wing', and to the trade unions.

In 1917, after the Communists had succeeded in capturing power in Russia, a strong old style influence came into British politics. The Communist Party of Great Britain, formed out of the membership of several existing bodies, was before long to take the lead among 'Left-wing' organisations. Owing to its mixed membership it was divided about Parliamentary action; but along with the old I.L.P. policy of seeking reforms and "getting with the workers in the day-to-day struggle", it took its line from Russia. At that time this meant advocating dictatorship and armed revolt. Mr. W. Gallacher, a member of their Central Committee and later Communist Party M.P., declared:

"They had talked of a Revolutionary Workers' government, but did they realise what was implied? Would the organisation of the workers for the revolutionary government be a legal one? The task of fighting for a revolutionary government would be a task of bringing the workers out on to the streets against the armed forces of Capitalism" (Workers Life, 6 December 1929).

In one of the periods when they were not telling the workers to vote for MacDonald and other Labour Party leaders, they also carried on a campaign of smashing up opponents' meetings. This was announced by Harry Pollitt, the General Secretary of the C.P.G.B., in the Daily Worker (29 January 1930):

"There should not be a Labour Meeting held anywhere, but what the revolutionary workers in that district attend such meetings and fight against the speakers, whatever they are, so-called 'Left','Right' or 'Centre'. They should never be allowed to address the workers. This will bring us in conflict with the authorities, but this must be done. The fight can no longer be conducted in a passive manner .... The Communist Party and its organ, the Daily Worker, will lead the working class, fighting boldly and openly, against this present government of scoundrels and agents of capitalism".

The government of the day was a Labour Government; but before long the Communist Party was again calling on the workers to vote Labour as it had done at some previous elections. Smashing up opponents' meetings still finds favour with some of the 'Left-wing' self-styled 'democrats'.

Now, in line with the shift of policy of the Communist Parties of France and Italy, the C.P.G.B. presents itself as an ordinary, 'respectable', reformist party using parliamentary methods and seeking to compete with the Labour Party on its own ground. Its election programmes are full of reform proposals paralleling those of the Labour Party: but on each one pressing for a little more than the Labour Party considers it expedient to ask. An example of the distance travelled since the days of 'heavy civil war' is in the Communist Party's attitude to the property and incomes of the rich. In their election programme in 1929 (which described the Labour Party as "the third capitalist party) the demand was made for the confiscation of "all personal incomes over £5,000 a year", confiscation of all fortunes over £1,000 at death, and repudiation of the National Debt, In those days Communist Party propaganda scorned
'Fabian gradualism'; but their election programme in 1970 had as one of its 'principal proposals' an annual wealth tax "on all fortunes over £20,000" to be at an average of three per cent". What could be more gradual than that?

But the shift of the Communist Party over to ordinary reformist parliamentary action created a vacuum which has been filled by a medley of organisations, claiming to be 'further left', and in practice adopting policies like those of the Communist Party half a century ago, including what the Party had taken over from the I.L.P. They include so-called communists who support State capitalist China aaainst State capitalist Russia — or the other way round — and several brands of Trotskyists'.

So now the 'further left' organisations use against the Communist Party the fallacious arguments formerly used by that Party. For example, the Socialist Worker (published by I.S., now called Socialist Workers Party), in its issue of 27 July 1973, denounced the Communist Party's "parliamentary road to Socialism". This was on the ground that the working class cannot take control of Parliament through elections; that Parliament does not control the State machine, and that the State machine cannot be used to change the rest of society completely. That the Communist Party road is not one to Socialism is true enough; but criticism of the Communist Party has no bearing on the case for a socialist working class gaining control of Parliament. An astonishing statement by the S.W.P. in criticism of the Communist Party is that the working class would be out-voted by "the middle class and ruling class". As the working class constitute ninety per cent of the electorate (see section "What is Capitalism") they obviously do not understand who the working class are. And an article by Paul Foot, editor of the Socialist Worker (The Times, 14 August 1975) maintained that, as the Wilson Government had failed to do anything for Socialism, this proved that Parliament could not be used by Socialists — ignoring the fact that the Labour Government did not have and did not seek a mandate for Socialism from the electorate, and represents a Party which stands for the perpetuation of capitalism.

The 'Left-wing' organisations generally claim to be Marxist; but they interpret this to mean either the anti-Marxist policy of Lenin based on Louis Blanqui's doctrine of minority armed seizure of power followed by dictatorship, or the equally anti-Marxist doctrine which holds that the workers can revolutionise society without needing to control the State power. In the field of economics the 'Left-wing' organisations mostly reject Marx's analysis of capitalism in favour of the myth of the Keynesians: that capitalism can be operated without unemployment through "managed expansion of demand" — that is, through inflation.

Those who accept Keynesian doctrines cannot accept the Marxist explanation of inflation. The Communist Party of Great Britain in its October 1974 Election Programme attributed inflation to a variety of causes, including V.A.T., membership of the E.E.C. and armaments expenditure, with no mention of Marxist theory.

International Socialism (March 1974) gave as explanation "The present inflation is similar in many ways to the upsurge in prices, wages and interest rates which occurred at the height of the classical boom". The boom was by then already over and the depression had begun. In the depression prices rose faster than ever. On their theory prices ought to have been falling.

The other journal of the same organisation (Socialist Worker, 4 August 1973) gave a different explanation which supported the idea that wage increases "must have some effect on prices". "Of course they do. Quite simply, business raises its prices when increases in costs threaten its profit margins".

But whereas the C.P.G.B. ignored Marx, the Socialist Worker repudiated the Marxist explanation, under the impression that it is something invented by Mr. Enoch Powell.
"But Enoch Powell says it is all the fault of the government printing too much money. This is an illusion even shared by some on the left".

Statements of socialist principles and the Marxist conception of the classless socialist system of society to replace capitalism never appear in the propaganda of the 'Left-wing' organisations.

One crucial test for the 'Left-wing' organisations concerns their willingness to create confusion by urging the workers to support capitalism administered by Laboor government. At the February 1974 Genera Election the following organisations all told the workers to vote for Labour candidates.

Communist Party of Great Britam
International Marxist Group
International Socialists (now Socialists Workers Party)
Workers Fight
Workers Revolutionary Party

The Tory Mr. Enoch Powell was also telling the electorate to vote Labour!

The tactic of supporting one administration of capitalism against another on the ground that, on particular issues or in general, there are fine shades of difference, is a reactionary survival of the old practice of voting Liberal against Tory or Tory against Liberal. (During the second world war it led the Communist Party to support Tory candidates.)

Even if it achieved small temporary gains this would count for nothing against the harm done by encouraging the workers to believe that their interest can be served by placing in power the enemies of Socialism. On this ground alone, apart from the rest of the case against them, the so-called 'Left-wing' organisations have no claim to working class support.

Further Reading
The Dead Russians Society

Questions of the Day (part 8)

Trade Unionism

THE SOCIALIST PARTY and the trade unions have a common origin in the class struggle. The former is the organised expression on the political field of the conscious recognition of that struggle by the workers. Its growth is the measure of their determination to end the struggle by converting the means of living into common property, thus establishing a harmony of interests within society.

The class struggle, however, does not commence with the conscious recognition of itas a fact. Long before the origin of the Socialist Party of Great Britain the class struggle was in progress. Strikes and lock-outs, machine-breaking and penal legislation have testified to the antagonism of interests in modern society for overa century.

With the rise of the factory system the workers found themselves involved in the struggle in grim earnest. It was no choice of theirs, but thrust upon them with relentless and increasing force with every step forward in industrial evolution. The Luddite machine-smashing in the early nineteenth century was typical of this phase of the conflict, but with further experience the need for some other form of organisation impressed itself upon the workers. The grouping together of the workers in the factories provided a basis for this. They began to realise that the machines had come to stay, and that the former independence which they had enjoyed, while still often working in their homes under the old system, had gone for ever. Hence the trade unions arose, uniting the workers in similar or allied occupations in order to obtain from the employers the best possible terms.

From the first, the strike was their most important weapon. Under the handicraft system, in its closing stages, workers sold the articles they produced to merchants and had to bargain with them about the price. Later all this was changed and the price of the workers' labour-power itself became the subject of dispute. They sold their energies by the hour, day or week, and the system of piece¬work, which was retained here and there, disguised but did not alter that fact. The workers had lost all substantial freedom, and their only alternative to working on the terms of the employer was starvation. Hence the right to withhold that labour-power in conjunction with their fellows became an essential means of resistance. Without it the workers would have been crushed beyond hope of recovery, and would have become, as Marx argued in his pamphlet, Value, Price and Profit, quite incapable of "initiating any large movement".

From the outset the trade unions found arrayed against them, not only the individual employers or groups against whom they were directly struggling, but the forces of the entire employing class, as represented by the State. For long the unions were subject to legal persecution as unlawful conspiracies and monopolies, and only by dint of considerable perseverance were those obstacles overcome. The workers indeed had their backs to the wall and only the fact that the unions were rooted in the new conditions saved them from annihilation.

By degrees, however, the employing class saw the uselessness of trying to destroy the new organisations and the unions were granted a legal status. In the course of time the employers discovered that 'respectable' labour leaders, whether in the field of industry or politics, were useful in helping to maintain industrial peace which they needed.

Judicious flattery aad the hankerings after political office have stimulated the ambitions of numerous leaders whom the workers have all too readily trusted. Underlying this process however has been the steady progress of capitalist industry. The constant developments in machinery, methods of working and financial organisation
of the employers have for generations set strict limits upon the effectiveness of the workers' struggles.

As the magnitude of the forces engaged in the struggle on either side increases, so the intervention of the State in industrial disputes is rendered more certain. The necessity for maintaining order on behalf of capitalism leaves governments no alternative. During the six years, 1945 to 1951, the Labour government on a number of occasions used troops to do the work of men on strike. This happened during the strike of workers at some London eletricity power stations in December 1949 and when London dockers struck in July 1949 and again in April 1950, and Bristol dockers in May 1949, when gasworks maintenance men came out on strike in September of the same year, and at Smithfield market in June and July.

These strikes, like almost all of the strikes that took place after compulsory arbitration was established in 1940 under Order 1305 were 'unofficial', that is, they were not backed by the men's unions and were also in fact illegal.

The Labour government, which had hitherto refrained from taking action on illegal strikes, prosecuted ten of the men involved in the gasworks dispute. They were sentenced to one month's imprisonment though on appeal the sen¬tences were altered to fines of £50 in each case. Because of the difficulty of enforcing the law against large numbers of such strikers, and in face of trade union demands for the repeal of Order 1305, the Labour government just before it went out of office in 1951 repealed the Order and made strikes and lockouts legal again.

When, late in 1977, the firemen came out on strike to get a pay increase greater than the 10 per cent which the Callaghan government was trying to enforce on workers generally, the government at once brought in the army to break the strike.

It is argued by defenders of arbitration that when workers have the legal right to submit their claims to an arbitration tribunal then strikes are unnecessary because the tribunal, being an 'independent' body, will give a satisfactory decision. This, however, is based on muddled thinking. It is true that the tribunals can be independent in the sense that they are not instructed by the employers or the government as to what awards they are to make on each claim, but they cannot and do not disregard governmental statements of general policy on wages.

In practice arbitration bodies exist for the purpose of preventing industrial disputes from taking the form of stoppages of work, and their awards on wage claims are bound to be influenced by the attitude of the workers. If workers were to abandon all idea of strikes the employers and the arbitration bodies alike would reduce still further the amounts they were prepared to offer. The strike remains the workers' indispensable weapon.

The relatively high levels of employment for some years after the second world war put the trade unions in a strong bargaining position. Unable to rely on widespread unemployment to hold wages down, governments sought to do this by means of an 'incomes policy'. The Tories relied only on moral appeals and them 'pay pause' was ignored by the unions. But when Labour was returned in 1964 some unions dropped this opposition to wage restraint and within a few months, along with representatives of the government and the employers, had signed a Declaration of Intent agreeing in principle to restraint.

Soon the Labour government took tougher measures. In 1966 they brought in the first of a series of Prices and Incomes Acts that gave them power to ban or delay negotiated wage increases and to fine any who defied such a ban. Many workers had their increases delayed but, although some seemed to break the law, the Labour government did not take any to court as they had done in 1950.

A new phase of wage restraint opened up under the Labour Government elected in 1974. The Labour (and Tory) policy of seeking to prevent unemployment by expansion of government expenditure — in effect, inflation — had completely failed. Unemployment rose to nearly 1 1/2 millions in 1976 but inflation had reached dangerous levels and, in order to maintain British competitiveness in world markets, it became increasingly urgent to curb it. The Labour Government negotiated a new restraint with the T.U.C. named "the social contract" designed, according to the Government, to hold down prices by limiting wage increases. It had little or no effect on prices — the rise of the price level between the return of the Labour Government in February 1974 and February 1977 was 71 per cent and it was still rising fast. Its effect on wage levels, however, was drastic. In the years 1974-77 'real wages', that is the purchasing power of money wages, had fallen materially. According to figures provided by the Trsasary, the purchasing power of the take-home pay of workers on the average wage fell by 12 per cent between December 1974 and February 1977 (The Times, 16 May 1977).

The workers' standard of living fell in the trade depression which began in 1974. just as it had in the trade depressions of the nineteenth century when openly capitalist Liberal or Tory Governments were in power.

The effectiveness of trade union action has clearly been blunted by support for the Labour Party, a link that has been justified by saying that Labour is the political arm of the trade union movement. But the experience of all the Labour administrations of capitalism since the second world war has shown that, far from using political power to force employers to grant wage increases, Labour governments had used it against workers to bring about wage restraint.

In the early months of 1969, the Wilson government announced its intention to push through legislation which would have empowered a minister to impose a twenty-eight day 'conciliation pause' on certain strikes and to enforce it by fines on workers who refused to comply with an order to continue at work. Only in face of widespread trade union opposition, and the threat of some Labour M.P.s to vote against it, was the proposed legislation dropped.

Trade union effectiveness has also been blunted by the extent to which the unions have been drawn into the administration of capitalism. During and since the second world war it has become customary for individual unions and the Trades Union Congress to associate themselves with the government and government departments in carrying out government policy. In return for consultation the TUC and the executives of the unions are expected to endorse policies and to undertake to recommend them to their members.

It may be argued that some of these activities are a logical development of the functions of organisations formed to protect the workers under capitalism but it is obvious that they, like the link with the Labour Party, distract attention from the principal purpose of the trade unions: to resist the pressure of the capitalist class on the workers' conditions.

What, then, is to be the future of the unions? At present appear to have become jumping-off grounds for Labour politicians, and to that extent less useful to the workers: but there is no obvious reason why, with the spread of understanding among their members, they should not be valuable centres of resistance to capitalist attack.

As we have seen, the trade unions arose from the resistance to the pressure on the workers in the early days of capitalism. They necessarily took the form most convenient at the moment, and have been slow to adapt themselves to changing circumstances. They have tended to overemphasise the distinctions between workers of different occupations and skills, origin, and sex. The Socialist Party, organised as it is for the emancipation of the workers as a class, insists upon the necessity for subordinating all distinctions to class solidarity. On the political field the workers of all countries have but one interest, and that involves winning political power and dispossessing the capitalist class. The supreme conflict with that class leaves no room for sectional antagonisms between workers.

Syndicalists (a name derived from the French word for trade union) argue that workers need not bother with political action to dispossess the capitalists and that instead they should organise into unions and in the course of a general strike 'take and hold' the means of production. Syndicalism is based on a dangerous illusion and is opposed by the Socialist Party. Though a general strike may be useful under some circumstances to resist attacks on living standards, it cannot be used to overthrow capitalism. The capitalists' monopoly over the means of production rests upon their control of political power. To leave this in their hands while attempting to carry out the social revolution would be folly and bound to lead to unnecessary bloodshed and suffering.

Syndicalism also, with such slogans as 'the factories to the workers' and 'the mines to the miners', suggests that capitalist control of industry should be replaced by that of a federation of industrial unions or workers' councils. This is misleading and shows the futility of drawing prints for a future society, since this proposal merely reflects occupational and sectional distinctions of capitalism.

The Socialist Party of Great Britain, while recommending trade unionists to offer their utmost resistance to the worsening of conditions, never fails to point out that under capitalism the pressure on the workers is inevitable. It is not enough, therefore, merely to apply the brake to these worsening conditions. The system that gives rise to them must be abolished.

Further Reading
Trade Unions SPGB pamphlet, 1980 (.pdf)
Syndicalism - its origin and weakness Socialist Standard 1986 (.pdf)