Profits and Politics: Labour and the Crisis of British Capitalism

• Author: Leo Panitch
• DOI: 10.1177/003232927700700404
• Published date: 01 December 1977
• Date: 01 December 1977
• Subject Matter: Articles

Profits

and

Politics:

Labour

and

the

Crisis

of

British

Capitalism

LEO

PANITCH

The

official

ideology

of

&dquo;British

Socialism&dquo;

has

always

been

convinced

that

Britain

provided

ideal

conditions

for

gradual,

democratic

progress

toward

socialism-

thinking

primarily

of

parliamentarism

and

the

avoidance

of

conflict

which

marks

British

public

life.

In

fact,

the

British

social-democratic

movement

has

never

from

the

day

of

its

birth

known

a

society

in

expansion,

a

capitalism

in

vigorous

growth

looking

confidently

forward

to

unclouded

skies-and

incidentally,

gener-

ating

the

surpluses

which

a

truly

successful

social-democracy

demands.

Instead,

it

has

confronted

an

era

of

grudging

retreat,

of

penny-pinching

and

postponement,

of

nostalgia

and

half-heartedness,

of

slow

disintegration

and

sad

frustration,

where

today

is

invariably

sacrificed

so

that

tomorrow

can

be

a

little

more

like

yesterday.

The

Labour

Party

set

out

to

build

a

new

world

in

the

crumbling

mansions

of

British

conservative

imperial

hegemony.

It

has

ended

up

as

a

chief

caretaker

of

the

ruins.

[Tom

Cairn,

&dquo;The

Fateful

Meridian,&dquo;

New

Left

Reuiezu

60

(march

April

1970):

34-35.1

We

are

saying,

at

this

conference,

that

the

crisis

that

we

inherit

when

we

come

to

power

will

be

the

occasion

for

fundamental

change

and

not

the

excuse

for

postponing

it.

[Tony

Benn,

Report

of

the

Seventy-second

Annual

Conference

of

the

Labour

Party,

Blackpool,

1973,

p.

187.]

TFiIS

paper

will

attempt

to

place

an

analysis

of

British

social

de-

mocracy

within

the

context

of

the

recent

debate

on

the

crisis

of

British

capitalism.

In

concentrating

attention

on

the

political

realm,

it

seeks

to

make

a

contribution

to

a

debate

that

has

been

conducted

primarily

by

economists.

It

also

seeks

to

provide

a

counterpoint

to

those

political

analyses

of

social

democracy

in

Britain

that

have

either

abstracted

the

study

of

party

organization

and

ideology

from

its

economic

context

or

wrongly

assumed

a

healthy

growth-oriented

capitalism

as

the

basis

for

their

analyses.

It

was

precisely

the

failure

of

these

analyses

to

understand

the

developing

crisis

of

British

capitalism

478

that gave

rise

to

such

ideas

as

&dquo;the

end

of

ideology,&dquo;

&dquo;embourgeoise-

ment,&dquo;

and

&dquo;a

decline

in

class

politics,&dquo;

which

have

been

proven

so

disastrously

wrong

in

the

past

decade.

By

putting

British

social

democracy

in

the

context

of

this

crisis,

the

tension

between

the

Labour

party’s

dual

role

as

working-class

party

and

as

an

integrative

national

party

is

revealed,

as

is

the

continuing

discrepancy

between

the

promise

and

performance

of

Labour

governments.

The

first

main

section

of

the

paper

reviews

the

debate

on

the

nature

of

the

British

crisis

and

attempts

to

draw

the

theoretical

and

empirical

conclusions

that

would

be

the

most

useful

for

further

political

analysis.

The

sub-

sequent

section

points

out

the

central

role

social

democracy

has

come

to

play

in

the

postwar

system

and

how

the

class

conflict

endemic

to

the

crisis

is

both

expressed

and

contained

within

the

Labour

party

as

revealed

in

tensions

between

the

unions

and

the

party,

between

conference

and

leadership,

between

the

Labour

left

and

the

Parliamentary

party.

We

will

conclude

with

a

brief

analysis

of

the

apparent

contradiction

between

the

shift

to

the

left

of

the

party

in

the

early

1970s

and

the

conservative

policies

of

the

current

Labour

government,

basing

our

analysis

on

the

political

location

of

class

conflict

within

the

Labour

party

itself.

,

_

, ,.~

..

,’

I

·

1

In

their

British

Capitalism,

Workers

and

the

Profit

Squeeze,l

1

which

one

critic

admitted

was

&dquo;the

first

serious

empirical

contribution

towards

an

analysis

of

the

present

crisis

of

British

capitalism,&dquo;2

Andrew

Glyn

and

Bob

Sutcliffe

initiated

a

well

sustained

and

theoreti-

cally

rewarding

debate

on

the

nature

of

the

modem

British

economy.

Locating

the

roots

of

the

malaise

of

the

British

economy

in

an

ac-

celerating

decline

of

profitability,

they

attributed

their

findings

on

the

declining

share

of

profits

in

the

national

income

and

the

declining

1.

Andrew

Glyn

and

Bob

Sutcliffe,

British

Capitalism,

Workers

and

the

Profit

Squeeze,

(London:

Penguin,

1972).

2.

David

Yaffe,

"The

Crisis

of

Profitability:

A

Critique

of

the

Glyn-Sutcliffe

Thesis,"

New

Left

Review

80

(July/August 1973):

45.

Although

I

mainly

concentrate

here

on

the

early

contributions

that

established

the

main

limits

of

the

debate,

the

debate

has

continued

and

extended

into

an

intensive

re-examination

of

Marxist

economic

theory,

primarily

in

the

pages

of

the

Bulletin

of

the

Conference

of

Socialist

Economists

(hereafter

referred

to

as

CSE

Bulletin).

A

comprehensive

bibliography

is

to

be

found

in

Ben

Fine

and

Laurence

Harris,

"Controversial

Issues

in

Marxist

Economic

Theory,"

in

The

Socialist

Register

1976,

ed.

R.

Miliband

and

J.

Saville

(London,

1976),

pp.

141-78.

Two

recent

and

important

American

contributions

to

the

debate

are

Peter

F.

Bell,

"Marxist

Theory,

Class

Struggle,

and

the

Crisis

of

Capitalism,"

and

Erik

Olin

Wright,

"Alternative

Perspectivcs

in

the

Marxist

Theory

of

Ac-

cumulation

and

Crisis,"

in

The

Subtle

Anatomy

of

Capitalism,

ed.

Jesse

Schwartz

(Santa

Monica:

Goodyear

Publishing,

1977),

pp.

170-94

and

195-231.