British Labour Party conference: Can Labour give a lead in the fight against austerity?

The Labour Party conference takes place at a crucial time. Working people are crying out for a lead in a mass movement which can force elections and topple the hated Con-Dem government.

The TUC has responded, under the pressure of left trade unions and radical fighting forces such as the National Shop Stewards Network, by passing a motion calling for a 24-hour general strike.

The battle is on to make sure that, in the run-up to the 20 October TUC demonstration and afterwards, the General Council names the date for a one-day general strike.

Waltham Forest protest, one of many protests outside Labour-run councils who pass Con-Dem austerity measures. , photo by Senan

No such bold initiative can be expected at the Labour Party conference. On the contrary, Ed Miliband and Ed Balls make it quite clear that they are opposed to strikes.

Yet the right to strike is the ultimate weapon, the last resort which working people possess to confront the bosses and their government.

And these rights are already severely restricted through Thatcher’s anti-union laws. Laws, which New Labour in power, both under Blair and Brown, did nothing to repeal.

’Wait for Labour’

The Eds’ mantra is ’wait for the Labour government’. It is also the real policy of right-wing trade union leaders who are incapable or afraid of mounting effective resistance which can mobilise the full potential of the labour movement to defeat the anti-working class measures of the government.

But what will such a government look like if it is successful in being elected? Ed Balls spelt this out in the most explicit terms at the TUC Congress.

Delegates were outraged to hear a possible future Labour chancellor openly admitting that if New Labour was in power now it too would be carrying through cuts and holding down wages.

This at a time when the TUC has pointed out that the share of GDP taken by wages declined from 70% in 1970 to less than 63% in 2010!

In other words, the only policy the New Labour leadership has is continued impoverishment of the working class.

Ah, but these would be different to Tory cuts! It would be like the ill-fated ’social contract’ of the Labour government of 1974-79, which was supposed to be a trade-off for limited wage rises in order to create jobs.

The social contract collapsed when the trade union movement concluded that it was a device for holding down wages while prices increased, resulting in deteriorating living standards and little benefit in terms of new jobs.

Economic crisis

It didn’t work then nor will it work today, particularly when capitalism demands unprecedented cuts in living standards as the price for maintaining the system.

There is not the slightest perception among the New Labour tops of the grave, deep-going crisis, which will hold any government in an economic vice, severely restrict its room for manoeuvre and remorselessly force it to bend the knee to capital unless it has a programme to break the stranglehold of capitalism.

Witness the retreats already, within months of being elected, of French president Francois Hollande. Forced by the pressure of the ’market’, he has promised that his already weak and ineffective wealth tax will last no more than two years and even that timescale could be in doubt.

Moreover, he has proposed a €30 billion cuts package in state expenditure. The consequence of this is a plummeting in his standing in the polls and, incredibly, a rise in the standing of the recently ousted right-wing Sarkozy.

The Bank of International Settlements shows that on the basis of capitalism, the scenario for the working people of Britain and Europe is dire.

The Financial Times commented on its findings: "In most advanced economies, the fiscal budget excluding interest payments would need 20 consecutive years of surpluses exceeding 2% of gross domestic product just to bring the debt-to-GDP ratio back to its pre-crisis levels." [22 August.] The British capitalist economy has no chance of achieving a ’surplus’.

In fact, despite all the pain associated with cuts, the budget deficit will not be eliminated by the next election.

Capitalism is going through its biggest crisis since the 1930s. The failure of this system is there for all to see in the more than 200 million unemployed worldwide, including 100 million young people, and the colossal growth of inequality and poverty.

Europe is convulsed – particularly southern Europe – by mass movements protesting against the dead end of capitalism, which offers nothing for the future but endless austerity.

Greece, Spain, Portugal and Ireland are experiencing a soul-destroying depression. The level of unemployment in Greece for instance is the same – 24% – as afflicted the US in the deepest days of the 1930s Great Depression.

The youth with no future have scattered to the four corners of Europe and the world, or are returning to the villages from which their families came, in a desperate but largely fruitless search for a job, any job, even one paying slave wages. The wheel of history is being turned back before our eyes!

And Britain, facing the onslaught of decayed British capitalism and its brutal agents, Cameron, Osborne and Clegg, is not far behind; it is Greece in slow motion! Unless the present economic decline is arrested and a massive programme of growth, generating millions of jobs, is put in place, the conditions of southern Europe will surely come to Britain.

There are already elements of Greece present in the social decay of Britain flowing from economic decline, revealed already in the growing ranks of youth unemployment and the ’solution’ of overseer Boris Johnson for them of work with no pay.

Even the knights of capitalism – professional economists – desperately casting around for an alternative have turned to Marx’s ideas, according to the BBC economics editor Stephanie Flanders.

She has produced a TV programme in which capitalist economists praise Marx and his ideas.

For instance, George Magnus is a senior economic adviser to the Swiss bank UBS and a frequent guest on Newsnight who "decided that Marx’s warnings about the internal contradictions of capitalism were becoming more and more relevant."

It’s reported that Magnus wrote an article headlined ’Give Marx a chance to save the world economy’. He received more emails in response to this than anything else he had written: "Some of the emails were pretty vicious"! The capitalist economist Nouriel Roubini simply stated in the Wall Street Journal: "Karl Marx had it right."


Yet Ed Miliband chooses this moment, just before the Labour Party conference, when capitalism is coming apart at the seams and the props of the system are enormously weakened, to ride to the defence of capitalism.

An interview with Miliband by Charles Moore, the former editor of the right-wing Daily Telegraph, in that paper has the headline: "I want to save the capitalism my father hated." [15 September].

His father, Ralph, was a well-known Marxist opposed to the system and its apologists on the right wing of the Labour Party.

The son, however, "wants to save capitalism from itself". When Charles Moore questioned his support for "responsible capitalism", which Moore correctly says is a "contradiction in terms", he doesn’t even deny this! He just falls back on the moth-eaten arguments of Winston Churchill, famous for his hatred of the labour movement, socialism and particularly Marxism: "Yes! But I believe capitalism is the least-worst system we’ve got. I believe in the creativity of BlackBerry (picking up his)."

How do we know that it is "the least worst system"? A real democratic socialist plan of production has not been tried, at least in an advanced industrial country, up to today.

Miliband seems to equate "inventiveness" – his BlackBerry – to capitalism and the market. Yet it remains a fact that all the big innovations, from space travel and its spin-offs, health research, the worldwide web and aerospace were not developed by private capitalism for profit but were initiatives reliant on state backing.

Imagine the colossal advantages if instead of the isolated islands of innovation in the state sector this was translated to a national and international scale.

Capitalism is an enormous brake not just on the productive forces, but on inventiveness, imagination and talent.

’Good capitalism’

Miliband has also served up ’pre-distribution’ as a winning idea. This has been described by an academic from Yale as "to focus on market reforms that encourage a more equal distribution of economic power and rewards even before government collects taxes or pays out benefits".

In other words, it is an extension of Miliband’s "good capitalism" (markets). "Equal" and "market" are diametrically opposed to each other.

The system demands the highest possible profit – and the easiest and best way for the capitalists to achieve this is by cutting wages and slashing services.

There is nothing ’modern’ in Miliband’s arguments. In fact, they predate the formation of the Labour Party itself, a return to the ideas of liberal capitalism, of a programme of limited reforms within the framework of the system.

There was at least an objective basis for such ideas in the 19th century when capitalism was a relatively progressive system.

Despite the horrors of the Industrial Revolution, the slave trade, etc, capitalism was at least able to develop the productive forces, science, technique and the organisation of labour, thus furnishing the possibility on the basis of socialism to abolish want and privation for the first time in history.

However, this system broke down at the end of the 19th century, accentuated in the first decades of the 20th century, when capitalism was no longer capable of providing reforms, through the Liberal Party in particular, to the working class.

This in turn laid the basis for the rejection of the Liberals and the rise of the Labour Party, which adopted a specifically socialist clause in 1918 – the famous Clause IV Part 4 of the Labour Party constitution.

When the labour movement embraced the aim of socialism it was because capitalism had palpably demonstrated, as it does today, its inability to take society forward.

In the former Soviet Union a bureaucratic caste betrayed the ideals of the Russian revolution. Although the planned economy was still maintained – and therefore the system which remained was still relatively progressive compared to capitalism – a one-party totalitarian regime was gradually established.

Socialist opposition

But today, it would not be Stalinism but democratic socialism based upon workers’ democracy which would be the model in Britain.

The check and control of all leaders and representatives at every level through workers’ control and management of the economy and society would ensure this. This could open up a future of undreamed of plenty.

The other perspective, chosen by Ed Miliband, is of a Labour government operating within the framework of a diseased system of capitalism, with the capitalists threatening blackmail at every step and defeat whenever even a slightly radical measure is proposed.

Even Miliband perhaps has an inkling of this history when he says: "While there’s capitalism, there’ll be socialism, because there is always a response to injustice." Precisely! Capitalism will always provoke opposition from the suffering working class and, ultimately, also big sections of the middle class.

It will engender a mood of looking for an alternative which will lead to a rediscovery of socialism.

Why not then return to some of the roots of the Labour Party of the past which at least rested on the working class and the labour movement, although the right-wing Labour leadership always had one foot in the camp of capitalism? Miliband will not do this and is therefore preparing disaster for his party and the working class in the event of coming to power.

Some on the left who remain within New Labour, including some left trade union leaders, vainly hope that they can ’reclaim’ the party for the working class.

Some, like the left-wing celebrity and writer, Owen Jones, together with trade union leaders like Len McCluskey of Unite, have set up a think tank, the Centre for Labour and Social Studies (Class) to further this aim.

Yet some of the panel members of this new organisation cannot be remotely described as ’left’.

It includes, for instance, Polly Toynbee of the Guardian – in the past, a champion of the right-wing Social Democratic Party split from Labour.

She is, at best, a liberal critic of the present government. Jack Dromey, a former right-wing trade union leader and another stalwart of Class, was a hammer for Neil Kinnock and the right wing in the Labour Party against the immortal Liverpool councillors in the 1980s who confronted and defeated Thatcher.

Moreover, this campaign has set itself very limited aims: to "transform the debate within the Labour Party".

When pressed if and when this project fails, under what circumstances will Class’s supporters conclude that the task of transforming New Labour is redundant? Owen Jones has argued: "When the trade union leaders have come to that conclusion."

This worshipper of accomplished facts only proposes to change history when he is guaranteed overwhelming support supplied by the trade union leadership.

With this approach, the Labour Party itself would never been founded in the first place.

It was the heroic minority, those like Keir Hardie, as well as the advanced trade unions, which fought for the project of a new party, which through struggle and events eventually found a majority.

The same task is being fulfilled today by those left trade unions such as the RMT transport union and the left within the PCS and the FBU, as well as the Socialist Party, who are fighting for the same project in modern conditions: a new mass workers’ party.

In the teeth of New Labour-dominated councils inflicting savage cuts across the board, such as Knowsley near Liverpool or in Southampton, where two Labour councillors have been suspended for fighting against the closure of a swimming pool and other cuts, what do Owen Jones and his allies on the left do in practice to counter them? Hold out the prospect that, in the mists of time, somehow New Labour will be transformed. This will have as much effect as a drop of water on a hot stove.

But if a mass workers’ party, even a small one at the beginning, was in existence then right-wing Labour councillors – more like a privileged caste today rather than genuine representatives of the working class – will be looking over their shoulders at an electoral challenge from such a party.

This would at least hold out the chance of staying their hand and preventing the cuts.

New Labour’s party conference, we can be sure, will be long on flowery rhetoric but short on a practical fighting programme to defeat the Con-Dem government.

It is to the idea of a new mass workers’ party, with a fighting socialist programme, that increasing numbers of workers will turn in the stormy period opening up in Britain.

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