But meanwhile unemployment was becoming permanent, insurance ceased to be insurance, since spending on the unemployed was not covered by the payments of contributors. The British unemployed can no longer be regarded as a “normal” reserve army, contracting and expanding and constantly changing its composition, but must be seen as a permanent social layer created by industry during the period of growth and discharged in a period of recession. It is a gouty growth on the social organism, stemming from a weak metabolism.
The President of the Federation of British Industries, Colonel Willey, declared at the beginning of April that the return on industrial capital had been so insignificant during the last two years that it could not stimulate businessmen to develop industry” Business enterprises do not yield any higher return than fixed-interest paper values (gilt-edged securities and so on). “Our national problem is not a problem of production but a market problem.” But how do you resolve a market problem? It is necessary to produce more cheaply than others.
Yet to do this it is necessary either radically to re-organize industry, to reduce taxes, to cut workers’ wages or to combine all three methods. Cutting wages, which can give only an insignificant result in terms of reducing production costs, will produce firm opposition since the workers are today fighting for wage rises. It is impossible to reduce taxes since it is necessary to pay off debts, to establish a gold-based currency, and to maintain the apparatus of empire and 1½ million unemployed to boot.
All these items enter into the cost of production. Industry could only be reorganized by investing new capital; meanwhile low profits drive free capital towards state and other loans.
Stanley Machin, the President of the Association of British Chambers of Commerce, recently declared that the solution to unemployment was emigration” The benevolent fatherland tells a million or so workers who, together with their families, make up several million citizens: “Stuff yourselves in the hold and clear off somewhere overseas!” The utter bankruptcy of the capitalist regime is stated here without the least equivocation.
We must examine Britain’s internal life from the standpoint of the abrupt and continuously declining world role of Great Britain which, while holding on to her possessions, and the apparatus and tradition of world domination, is in actual fact being relegated increasingly to a secondary position.
The break-up of the Liberal Party crowns a century of development of capitalist economy and bourgeois society” The loss of world domination has brought whole branches of British industry to a dead end and has struck a lethal blow at self-sufficient medium-sized industrial and commercial capital – the basis of Liberalism. Free trade has reached an impasse.
In the past the internal stability of the capitalist regime was in large measure assured by a division of labour and responsibility between Conservatism and Liberalism. The break-up of Liberalism exposes all the other contradictions in the world position of bourgeois Britain at the same time as it reveals the internal crisis of the regime. The upper circles of the Labour Party are politically very close to the Liberals; but they are incapable of restoring stability to British parliamentarism since the Labour Party, in its present form, itself expresses a temporary stage in the revolutionary development of the working class. MacDonald’s seat is even shakier than Lloyd George’s.
At the beginning of the 1850s Marx thought that the Conservative Party would soon quit the scene and that political development would follow the line of a struggle between Liberalism and socialism.
This perspective presupposed a rapid revolutionary development in Britain and in Europe. Just as, for example, our own Cadet Party (Constitutional-Democrats) became, under the pressure of the revolution, the sole party of the landowners and the bourgeoisie, so British Liberalism would have absorbed the Conservative Party and become the sole party of property, if a revolutionary onslaught by the proletariat had developed in the course of the latter half of the nineteenth century.
But Marx’s prophecy was made on the very eve of a new period of rapid capitalist development (1851-1873). Chartism finally disappeared. [4] The workers’ movement took the path of trade unionism. The inner contradictions of the ruling class took on the appearance of a struggle between the Liberal and the Conservative Parties. By rocking the parliamentary swing from right to left and from left to right, the bourgeoisie found a vent for the opposition feelings of the working masses.
German competition was the first serious threat to British world hegemony, and dealt it the first serious blow. Free Trade ran up against the superiority of German productive technique and organization. British Liberalism was only the political generalization of Free Trade. The Manchester School had occupied a dominant position [5] from the time of the bourgeois, property-qualified, electoral reforms of 1832 [6] and the repeal of the Corn Laws in 1846. Over the course of the next half-century the doctrine of Free Trade seemed to be an immutable programme. Accordingly the leading role belonged to the Liberals.
The workers tailed behind them. From the beginning of the 1870s the pattern was upset: Free Trade was discredited; a protectionist movement set in; the bourgeoisie was increasingly seized by imperialist tendencies. Symptoms of the Liberal Party’s decay appeared as early as Gladstone’s time, when a group of Liberals and Radicals led by Chamberlain raised the banner of protectionism and joined with the Conservatives. [11] From the middle of the 1890s trade took a turn for the better. This delayed Britain’s political transformation.
But by the beginning of the twentieth century Liberalism, as the party of the middle classes, had cracked. Its leader, Lord Rosebery, placed himself openly behind the banner of imperialism. However, the Liberal Party was destined for one more upsurge before leaving the scene.
Under the influence of the evident decline of British capital on the one hand, and of the mighty revolutionary movement in Russia on the other, there developed a political re-awakening of the working class which, in applying itself to the creation of a parliamentary Labour Party, also poured flood-water into the mill of the Liberal opposition” Liberalism came to power again in 1906. But this upsurge could not, by its very nature, last for long. The political movement of the proletariat led to the further growth of the Labour Party. Before 1906 the Labour Party’s representation had grown more or less in step with the Liberals’; after 1906 the Labour Party was clearly growing at the expense of the Liberals.
It was formally the Liberal Party which, through Lloyd George, led the war. In fact, the imperialist war, from which even the sacred regime of Free Trade could not save Britain, inevitably strengthened the Conservatives as the most consistent party of imperialism. Thus the conditions were finally prepared for the Labour Party’s entrance onto the scene.
While impotently hovering over the question of unemployment the Labour Party daily newspaper, the Daily Herald, draws from capitalist admissions such as we quoted above, the general conclusion that, since British capitalists prefer to give financial loans to foreign governments rather than for domestic industrial expansion, there is nothing left for the British workers to do but to produce without the capitalists.
In a very general sense, this conclusion is perfectly correct, only here it is drawn not at all with the intention of arousing the workers to drive the capitalists out, but merely to urge the capitalists along the road of “progressive efforts”. As we shall see, the whole of the Labour Party’s policy turns on this. To this end the Webbs write a whole book, MacDonald delivers his speeches and the editors of the Daily Herald supply daily articles. Meanwhile if this pathetic scaremongering has any effect at all on the capitalists, it is in the opposite direction.
Every serious British bourgeois understands that behind the mock-heroic threats of the Labour Party leaders there lies concealed a real danger from the deeply stirring proletarian masses. It is precisely because of this that the shrewd bourgeoisie concludes that it is better not to tie up fresh resources in industry.
The bourgeois fear of revolution is not always and under all circumstances a “progressive” factor. For there can be no doubt that the British economy would derive great benefits from the co-operation of Britain and Russia” But this presupposes a comprehensive plan, large credits and adaptating a considerable section of British industry to the needs of Russia. The obstacle to this is the bourgeoisie’s dread of revolution, and their uncertainty about the future.
The fear of revolution drove the British capitalists along the path of concessions and re-organization as long as the material opportunities for British capitalism were, or seemed, limitless. The shocks of the European revolutions have always found a clear reflection in Britain’s social development; they led to reforms as long as the British bourgeoisie, through their world position, retained in their own hands gigantic resources for manoeuvre.
They could legalise trade unions, repeal the Corn Laws, increase wages, extend the franchise, institute social reforms and so on. But in Britain’s present radically altered position in the world the threat of revolution is no longer capable of pushing the bourgeoisie forward: on the contrary, it now paralyzes the last remnants of their industrial initiative. What is necessary now is not threats of revolution but revolution itself.
The factors and circumstances set
