A Socialist Answer to the Common Market (1967)

A SOCIALIST ANSWER TO THE COMMON MARKET

This pamphlet, "presented by Walton Constituency Labour Party for the consideration of organisations affiliated to the Labour Party and their delegates to the 1967 Annual Conference" argues that "on the road of capitalism, inside or outside the Common Market there is no way out"

RETREAT TO TORYISM

Conference meets this year under grim economic circumstances, for despite the reassurances of last year's Conference by the leaders of the Movement, unemployment threatens to rise to three-quarters of a million or more by the winter.

The measures taken by the Government, the Prices and Incomes Policy, which mean sacrifices by the workers and middle class on the one hand, and subsidies to the industrialists on the other hand, have not solved the problems of the economy. Operating the same policies as the Conservatives has produced the same results.

The National "Plan" to increase production by the modest figure of 4% a year has been abandoned. Ray Gunter, Minister of Labour, following Harold Wilson and other leaders, now advocates bigger profits to the capitalists as a solution to the ills of British Society; whilst, at the same time, he has come out for a cut in expenditure in the social services (for that is what his recent speech meant) by the introduction of a Selective Means Test. This arises from the failure of British production to rise to the required height confidently forecast by Harold Wilson before the election of the Labour Government.

Apart from secondary reforms, paid for mainly by increases in taxes at the expense of the workers, the policies of the Government have been fundamentally no different from those of the Tory Governments which preceded them. It is true that steel has been nationalised, but despite the pledge that there would be no further compensation when the Conservatives denationalised the industry, compensation was so lavish that Steel shares on the stock exchange rose in price and, in addition, the profitable section of the steel industry has been allowed to remain in private hands. Only the losses are nationalised, as with the nationalisation of coal and the railways. 

THE ENGLISH SICKNESS 

Of course, the real cause of the impasse of British industry, the crisis in the balance of payments, the "English sickness" which has affected the economy with some sort of crisis every two years in the period since the war, arises out of the decay of British Imperialism. It has fallen far behind its main rivals, mighty American Imperialism on the one side and the Russian bureaucracy on the other, and the attempts to keep up with these super-powers in armaments is bankrupting the economy.

Meanwhile, direct domination of the former colonial territories has been abandoned when faced with the upsurge of the colonial peoples. Before the war in addition Britain played the diplomatic game of the balance of power in Europe. All this is now in ruins.

Britain has dropped into fifth place as an industrial power, after America, Russia, Germany and Japan. As Wilson, Crosland, Jay, Gunter and many other of the leaders of the Cabinet, when attacking the policies of Macmillan, Douglas-Home and other Tory leaders, trenchantly declared, in the field of production, social services, education and the increase in the standard of living (per head of population), Britain was falling behind all the Western capitalist powers. Mighty strides forward have been taken by the countries, formerly backward, where landlordism and capitalism have been destroyed, despite the absence of democracy and the existence of a totalitarian, inefficient bureaucracy.

It has only been the big increase in world trade since the war, which has disguised the catastrophic decline of British capitalism but even so, from the position of having 25% of world trade as her share in 1950, this dropped to 13% in the last year of office of the Tories. Since the Labour Government came to office and continued Tory policies, there has been a further drop to 10%.

The Tories, when in power, moved frantically from one side to the other, in home and foreign policy, in an endeavour to find some cure for the sickness of British capitalism. Deflation and reflation in economic policies at home, following in tow to mighty American Imperialism with the so-called " special relationship" in foreign policy, opposition to the Common Market and the setting up of an alternative organisation of the seven powers of EFTA. When this failed they attempted to enter the Common Market, only to be met with the veto of French Imperialism, under de Gaulle. Thus yesterday's semi-satellite France kicked British Imperialism in the face.

WHY WILSON FOLLOWS THE TORIES TOWARDS THE COMMON MARKET

The last attempt to enter the Common Market was opposed by Gaitskell, Wilson and other leaders. They put forward the need to preserve "Sovereignty", the need to base "Britain's" foreign policy on the Commonwealth, the inevitable increase in the cost of living because of the agricultural policy of the Six, the need to protect the British workers' standard of living, the need for a British "Plan", and other national arguments.

Now, in power three years, they have capitulated to the pressures of Big Business and the bankers and, on even worse terms than those proposed by the Tories, have tried to enter the Common Market. Foreign policy is the continuation of home policy and having adopted the discredited policies of the Tories, in even harsher form at home, they could not but blindly follow similar policies abroad. Thus have they adopted Tory home and foreign policy.

These policies have a class basis and it is impossible to serve two masters at once, the class struggle pulls the capitalists and the workers in different directions. At home, as the profits of the capitalists come from the unpaid labour of the working class, the bigger the share of what they produce received by the workers means the less for the capitalists. Consequently, the demands of the capitalists for a wage freeze, for a cut in state spending in "wasteful" expenditure on the social services. The increase in taxes on the workers and the subsidies given to the capitalists in an endeavour to coddle and coax them to "invest". But capitalists invest for profit, and under conditions of virtual industrial stagnation will not risk their "capital" - that capital which has been obtained by the exploitation of the working class. 

WHO LEADS WHOM? 

Walton, along with other Constituency Parties, has argued for many years that where the economy was 80% in the hands of private industry and only 20% nationalised, it would be the former which would dictate the policy of the latter and not vice versa. Unhappily the last three years of the policy of the Labour Government have irrefutably demonstrated the truth of these stark economic facts of life. Instead of "GO" with Labour the economic policy has been one of "WHOA" with Labour. The tragedy is that the draconic legislation has been justified by references to the economic crisis left by the Tories, now more than three years ago! As if a Labour Government can ever expect to come to power under any other conditions! It is precisely to overcome the impasse of capitalism, that the Labour and Trade Union Movement was created. Carrying on the economic, political and diplomatic policies of capitalism can only worsen the situation and discredit the ideas of Socialism, and the Labour Movement.

British capitalism is now in an even worse state economically, diplomatically and politically than when Labour came to power. The question of entry into the E.E.C. has only been posed because industry and technique in Britain has outstripped the narrow bounds of private ownership of industry and the banks, and the limits of the narrow market of the British state with a fifty-four million population. The Commonwealth market, mainly poor and "under-developed" countries, is not sufficient for the "modern" industries, such as computers, electronics, plastics and so on, which dominate all the main industrial countries of the world.

At the last Scarborough Conference Harold Wilson promised a technological revolution, which would solve the problems of production and increase leisure. The giant super-powers like America, with a Continental market, and a population of 190 million and Russia with a population of nearly 240 million and a land area of vast proportions, have the area and the market for modern techniques. Wilson himself has pointed out that America and Russia spend four to six times as much on technological research as Britain. With her limited market Britain is outclassed. The big monopolies, banks and insurance companies are frantically searching for some solution which will guarantee their profits. The Chairman of I.C.I. has correctly pointed out the "small" or "medium" size countries cannot compete on the world market, which dominates especially a country like Britain, whose trade is greater than any other country in relation to her production of goods.

It is in consequence of the crisis of British capitalism, of the search for bigger markets by the giant monopolies and combines, that the question of the Common Market was raised. Here would be a market of 300 million people! A bigger market than that of the United States and Russia! There are only a couple of "trifles" they have overlooked and Harold Wilson seems to have overlooked these too. First they have to get in! Secondly it is not one united market like that of the United States or of Russia, however bureaucratically her economy is planned. It is a series of national capitalisms, with their own vested interests for the French, German, Italian and other capitalists are all competing against each other. There is no such thing as a "European" Capitalism because the company laws and Tax structures ensure that monopoly capital in each country is pitted against the others. It is not a question of international unification of capital but, each against all. Horse deals, agreements, temporarily a united tariff against non-members and, by July, 1968, Industrial free trade between the six and even this will not last for if the Common Market has held together up to now, despite a succession of crisis, in the coal community, in that of steel and iron, in Euratom, it has been because of the growth of the market and of world trade before and since the Common Market was formed. The veto of de Gaulle despite the attempt of the Labour Government to crawl in, was conditioned by the interests of the French capitalists. 

THE COMMON MARKET CANNOT ENDURE

At the first really serious economic slump, there will be, at best, only a shell of the Common Market. Already France, Italy, West Germany and Britain too are scrambling for orders from Russia and Eastern Europe. Thus the Common Market does not solve the problem. Harold Wilson, reflecting the pressures of the British capitalists, and their realisation that they cannot hope to be a partner, even a junior partner, of the American giant, has put forward some "Gaullist" arguments to try and placate the French General. Technical, industrial and scientific research in Britain is 70% of that of the whole of the Common Market put together. All this would be at the disposal of her partners and thus combining their efforts they could hope to compete with America and Russia in the new technological revolution. Otherwise Europe and Britain would become technologically under-developed countries within a decade or so. (By the way, 70% of this research is paid for or conducted by the State, the monopolies reap the benefit without payment).

This attempt to crawl into E.E.C. seems doomed to fail. In any case Britain's bid has come far too late. She may have benefited had she entered the Market at the beginning, but by the time the question could become practical politics in 1969-70 it would be too late.

Meanwhile the white dominions of Britain, Australia, Canada and to some extent New Zealand look towards America for defence and to some extent for investment, 60% of industry in the case of Canada. The "Commonwealth" as a whole is only held together by tenuous threads, for like the rest of the under-developed world, reflecting the world impasse of capitalism it is in constant upheaval and turmoil. The under-developed world shows the picture of what will happen in the industrially developed capitalist countries at a later stage. 

Figures as tabulated in the pamphlet

The world division of Labour, and the division of labour in particular of the industrially developed countries has been intensified since the Second World War. In particular the trade between the industrially developed countries themselves has increased to a far greater extent than the trade with the former colonial and semi-colonial areas of the world. It is this fact that has led to the posing of the question of bigger markets. The market of France, Germany, Italy and the Common Market is dominated largely by a condominium of France and Germany, is too small for all these countries. But even a successful crawling in to the Common Market at the expense of the British working class would not solve the problems of British capitalism. Some industries would benefit, some like the ruined industries in Britain itself of coal, shipbuilding and the docks, would not be able to stand up to the competition of the Common Market countries. Nor would the older industries like textiles, leather goods, etc. Britain, apart from America, still has the highest tariffs in the world. It was for the purposes of the " spur" of competition that Heath justified his insistence in attempting to get into Europe. It would be the main monopolies, the banks and insurance companies which could hope to benefit by entry. One of the reasons for the balance of payments crisis, is that despite tariffs the British capitalists, having squandered the advantages of centuries of domination are being beaten by their rivals in many fields both consumer and capital goods even in the home market.

The people who expect to benefit by entry are the same set of monopolists who are benefiting by the subsidies of the Government to industry. Neither entry nor non-entry can be a solution for the working class and the Labour Movement, for it is like the arguments for or against devaluation, neither of which can benefit the workers. Inflation or deflation is a two-headed monster, both heads of which are detrimental to the interests of the workers. Devaluation is an indirect cut in real wages. Deflation is the "freeze" which the workers have just experienced. Either method means unemployment, misery and suffering for the workers.

On a capitalist basis, Ray Gunter, the Minister of Labour, is right, the capitalist must make profits, i.e. extract the maximum from the workers in order to invest to extract even greater profits from the workers, in order to invest in order to extract even bigger surpluses still from the workers. That is the imperative and compulsive jungle law of capitalism, which involves the contradiction that the workers cannot buy back all the goods they produce, and that the rate of profit of the capitalists must fall.

What then can the Labour Movement do? The Government has just introduced an Enabling Act allowing them to purchase shares in any company to provide the money necessary for modernising, where these firms are failing. This is for the Government to act as the handmaiden of Capital. But the C.B.I., which up to now has benefited most from the policies of the Government, are regarding this legislation very dubiously, for they are afraid of the precedent which it creates. There is nothing to prevent the Government from introducing an Enabling Act to take over the 380 monopolies, the banks and the insurance companies which dominate the economy. Such a policy mobilising the enthusiasm of the great majority of the working class and the people of the country would be a beginning of a Socialist policy.

BRITAIN CAN LEAD THE WAY

Britain, adopting such measures of Socialism, could then turn to the countries of Europe. A democratic Socialist Britain could appeal to the workers of Europe to get rid of their capitalists and the example of a Socialist Britain would spread to the countries of Western Europe. It would provide a beacon light for the countries of Eastern Europe too, for the people of these countries, including Russia, are seeking a way to Socialist democracy and away from the totalitarian rule of their bureaucracies.

It is true that in the modern world all countries are linked in their interests or, to be more correct, the interests of the workers of all lands are, the same. The mere posing of the problem of the Common Market is a proof that capitalism has outlived itself, for what is wanted is a plan of production, democratically controlled nationally and internationally. A Socialist United States of Europe, where the division of labour would be worked out for the benefit of the peoples of all these countries. A continental plan of production, with the maximum use of resources for the benefit of the peoples would mean undreamed of standards of living and low hours of work for all. Not the E.E.C. but the Socialist United States of Europe would provide a solution. An international co-operation of production instead of competition would rapidly see the introduction of a four hour day with a four day week and minimum wage of £25 per week. Technologically this is possible. Automation on a continental scale would transform the world. The T.U.C, is looking towards a two hour day ... in thirty years’ time with automation!

The technical possibilities as explained above are already there. What stands in the way is the vested interests of the capitalists of Western Europe and the bureaucracies of the national states of Eastern Europe. International Socialism is the basis on which the Labour Movement was created and it is the only practical policy. Non-socialist policies mean, as has been demonstrated, a cowardly capitulation to Big Business.

A Socialist Britain would rapidly mean a Socialist Europe. A Socialist Europe would mean a Socialist Asia and Africa. A European and international division of labour would bring education, technology and high standards of living, within the reach of all. Such a Federation would also have its effect on the American working class and people.

It is a question of making an audacious beginning. A Socialist Britain would be the key. The only other alternative which is slowly working out is for Britain, on a capitalist basis to suffer the fate of Spain who after the loss of her Empire declined into a state of backwardness and stupor for centuries. Capitalist Britain is already falling behind in the race, and tomorrow the situation will be even worse. On the road of capitalism, inside or outside the Common Market there is no way out. Only a future of degradation and of inglorious discredit of the Labour, Movement for carrying out capitalist policies. Events have demonstrated what this means, but it is nothing to the events of the next few years. Either the Government will have to do the dirty work of capitalism, or remain true to the teachings of the founders of the Movement. Centralisation and concentration of capital into the hands of a few monopolies, or socialisation of industry.

It is time to carry out the programme of the Movement as expressed in Clause IV.

Clause IV - as carried on Labour Party membership cards until Tony Blair