What are the roots of the present crisis in Britain? Andrew Gamble responds to the recent discussion in International.
In three recent articles [in] International, one of which takes the form of an extended review of my book Britain in Decline, John Ross has developed an important analysis of Thatcherism and the nature of the present crisis. I would like to respond to some of the criticisms he makes of my work as well as discussing some of the wider issues his analysis raises.
On the basic approach to the study of the British crisis there is little that separates us. Ross argues that the crisis of British capitalism has to be understood historically, firstly in terms of the role Britain has played in international development, and secondly in terms of the character of Britain's own internal political evolution. This is the precondition for an accurate identification of the balance of forces between capital and labour and the internal composition of these forces, and for avoiding either unfounded pessimism or optimism about short-term industrial and political trends.
I am in broad agreement with this perspective. It is not possible to grasp the character of Britain's economic crisis and decline without understanding the way in which capitalism as a world political and economic system has developed. The very notion of British 'decline' only has meaning in relation to this larger whole. To concentrate on innate causes of decline within Britain — to believe that it is all a matter of Britons' reluctance to work, or British culture and traditions — is to start from the wrong end and miss out what is most important: that Britain's national development is an aspect of a much wider process of uneven and combined development in the world economy.
Nevertheless the internationalist perspective is not without its problems and its pitfalls. It can encourage a tendency to ignore what is specific and unique to particular national economies and states, and to attempt to reduce them to mere instances of some general theory of crisis. This is to collapse the different levels of abstraction that are involved in political analysis. What is necessary is to grasp the dialectical interrelation of the development of capitalism as a world system and the specific political developments within each nation state.
This is the great merit of John Ross' analysis. The approach is one I share but there are a number of differences between us. In his review Ross makes a number of specific criticisms. Some of these are minor and not really at issue. I did not intend to suggest that Britain's geographical status as an island was sufficient to explain the rise of British imperialism. It was a contributing factor, no more. Far more important undoubtedly was the organisation of a strong state power. I too emphasised that there was nothing 'inevitable' about Britain's career of overseas expansion and contrasted Britain's historical experience before the sixteenth century with the centuries that followed it. Nonetheless, factors of geography are important: Holland may have successfully resisted Spain; it was less successful in resisting Napolean. England might have been no more successful had there been a land frontier with France.
Ross also criticises my discussion of ideas current among Radicals such as Cobden and Bright about how to discourage the working class organising as a class and defining its interests in opposition to those of the bourgeoisie. Ross argues that such a perspective was totally excluded in reality. In practice it was, but I was describing an ideological project, not a political programme, and I think Ross underestimates the size and potential of the Radical movement, particularly in Wales and Scotland, and in the industrial areas in England. The history of imperialism, the collapse of British Liberalism, and the consolidation of Tory Britain, we know. But there was throughout the nineteenth century the possibility of a very different kind of political development.
An Unfinished Bourgeois Revolution?
There is, however, a much more substantial point of disagreement between us. Ross argues that in my overall analysis of the course of British decline I do not give proper weight to the internal development of political and social relations, specifically that I underestimate the effects of the unfinished character of the bourgeois revolution. (He is certainly right to say that the starting point for discussion of this question is the essay by Anderson. My omission of reference to this was not intentional — my book leans heavily upon it as indeed all work in this field must do.) Ross does not regard this as a question of historical interpretation alone. This error in analysis lead to errors in the assessment of political strategy, and in particular in the evaluation of Thatcherism.
Perhaps it would be useful at this point to set out and enlarge upon what seem to me the main elements of Ross' analysis. He argues that an appreciation of the unfinished character of the bourgeois revolution in Britain is crucial for understanding the contemporary crisis. He describes the effects of this 'unfinished revolution' as follows:
'Despite the fact that the British bourgeoisie achieved an overwhelming development of the capitalist economy, it failed from the mid-nineteenth century onwards to bring about the necessary changes in the political structures and class relation of forces, both inside the ruling class and between the ruling class and the working class, that could have maintained this development.' (International, January 1982, p.23).
What this passage refers to is the continued predominance of landed commercial, and banking capital, the survival of many archaic political forms, the containment of radicalism and republicanism, the conservation of many institutions in civil society in their traditional form, as well as the grudging tolerance afforded to the labour movement and its acceptance as a corporate interest in the state.
The subordination of industrial capital within the British ruling class and the increasing industrial and potential political strength of the organised labour movement created the opportunity for the ascendancy of the Conservative Party in the mass democracy after 1885. The party had seemed at one stage in the nineteenth century set to wither away, but it adapted skilfully to the requirements of electoral politics and proved itself capable of attracting mass support. Its nucleus was reactionary sections of the landowners and sections of the state apparatus, particularly the military and the judiciary, but its electoral coalition stretched far beyond this, taking in Ulster Protestants, and important sections of the new middle class, the petit-bourgeoisie, and the working class itself. This was achieved by the party's ability to mobilise support around national themes — Crown, Church, Empire, and the Union. The accession of the Liberal Unionists after 1886, following the split over Irish Home Rule in the Liberal Party, and the Boer War were particularly important in consolidating this image and appeal, and establishing the Conservative party as a mass party of the Right, which was heavily dependent upon working class votes.
Before 1914 the Conservatives competed with the Liberals as the main alternative ruling class party. Ross argues that it was at this time that a 'specific ruling class orientation came to be embodied in the party, that of international banking operations, high exchange rates and concessions to the working class internally to maintain its firm political base.' (International, May 1981, p22) From this perspective the ascendancy of the Tory party in the era of mass democracy is an expression of the failure of the industrial bourgeoisie to carry through a modernising revolution, to complete the changes brought about by the civil war. But it also proved a successful instrument by which Labour was contained at least cost to the overseas military, commercial, imperial, and financial interests of the leading sections of the British ruling class.
This was, however, a holding operation; a very successful one. but one whose foundations were sure to be eventually undermined, because in Tom Nairn's phrase, the consensus that was erected was a consensus against modernisation. The enormous political, financial, and ideological assets which the British state had accumulated in three centuries of expansion were gradually used up once Britain's world power waned, yet so long as they existed they helped postpone any drastic restructuring of the economy or confrontation between the classes.
The Crisis of the Tory Party
This is why, as Ross argues, when Britain's relative economic decline finally precipitated a series of political crises in the 1970s, one of the chief ways in which the crisis was expressed, was through a loss of support for the Conservative Party and the disorientation of its leadership. The traditional political and economic perspectives of the party no longer added up to a coherent policy. This is the basis for Ross' interpretation of Thatcherism. He sees it as the last attempt to keep together the historical Tory bloc, but regards its failure as inevitable: 'This will be the last government of the Tory party in its present form' (International, May 1981, p23).
The reason for this, he argues, is because the Tory party in general and its Thatcherite wing in particular does not represent the 'decisive forces' of the British domestic industrial bourgeoisie, who on the contrary are represented by Heath, the Liberals, and the SDP. Two important conclusions are drawn from this. First, the Heath wing is no less anti-working class than Thatcher — particularly in its advocacy of wage restraint. Secondly, Thatcher's policies are, in the present relation of forces, against the interests of the most decisive sections of the bourgeoisie.
The crisis of the Tory party reflects the exhaustion of the strategy which has traditionally preserved the interests of the dominant sections of the ruling class and contained the demands of Labour. The crisis threatens to become a general one for the ruling class because although Thatcher's economic policies lack rationality, the 'rational' policies of Heath and the Liberals cannot be implemented because they have no way of dealing politically with the working class (Ross cites the events of 1970-74 as evidence of this).
This analysis abounds with insights but there are a number of criticisms that can be made of it. In his latest article (March 1982) Ross makes many of them himself, at least implicitly. In May 1981 he argued that Thatcherism was doomed because it comprised:
'An economic policy incapable of decisively shifting the class relation of forces, and one pushed increasingly towards pragmatism, together with an insufficient reactionary mobilisation to protect her from the unpopular consequences of her economic policies....In its inability to find a coherent combination of an economic formula and a political one it is creating a major political crisis for the ruling class.' (International, May 1981, p24)
But in March 1982 he argued that Thatcherism was perfectly rational and coherent for the ruling class given one set of assumptions concerning the political relation between the classes in Britain; a possibility of inflicting major defeats upon the working class.
Thatcher, argues Ross, in the later article, understands that it is politics which is the key to the internal economic problems facing the British ruling class. Deflation and unemployment are intended to destroy the militancy of sections of organised labour and draining the will of any group to resist permanent cuts in living standards. Such a strategy has high risks and this is why certain sections of the Tory party have been so critical of it; it imperils the foundation of the great Tory coalition. Nevertheless, so long as the policies appear to be working, the bulk of the Tory party and of organised capital, both banking and industrial, has stayed loyal. Banking capital, as Ross points out, has had fewer reservations than some other sections of capital, but overall the degree of acquiescence has been considerable.
This does not mean that Thatcherism can necessarily succeed. But what Ross now registers is that while Thatcherism may look economically irrational, in the short run it may still be politically rational in the longer term. But it is a high risk strategy. The slump of 1979-81 which was largely due to the policies of the Thatcher Government, actually put the British economy further behind its rivals. The gains in productivity and the reductions in strikes which accompanied it would have to be continued throughout the upturn and beyond it before this policy can be judged a success. This as Ross says is the real test of Thatcherism. Of particular interest and importance is the stress he lays on the pattern of industrial militancy and the need to guard against excessive pessimism in the downward phase of the economic cycle when militancy and pay settlements are falling, and excessive optimism in the upward phase when they are rising.
This seems to me to be right, because it does allow Thatcherism its own internal coherence and rationality. It does not mean as the earlier articles suggested that Thatcherism is necessarily doomed. The odds against it succeeding are still high (although considerably reduced by recent events) but there remains a chance that Thatcherism can win through.
This changes the significance, too, of the SDP. Ross stresses the seriousness of the crisis of representation in Britain. He is quite right to argue that the introduction of a system of proportional representation would have major consequences. It is certainly not a technical or peripheral matter. It would change the nature of alliances and the way in which coalitions of social forces are organised and expressed politically. Also, discounting the possibility of an Alliance government, he suggests that the manner of Alliance participation in a future government will be determined to a considerable extent by what happens to the Thatcher experiment. If during the upturn it fails to meet substantial resistance, then the way will be clear for the continuation of Thatcher's policies or an Alliance/Conservative government which would broadly maintain social market policies. But if the Thatcher Government's policies suffer major reverses during the upturn, making it appear that the years of hardship were for nothing and that Thatcherism offers no escape from the cycle of decline, then the role of the Alliance might be a coalition with the Labour party supporting a programme of incomes policies and direct intervention to raise demand and investment.
This is much closer to my own reading of current developments. But I would go further than Ross in certain respects. The notion of economic rationality and ruling class interests are extremely complex and difficult to define at the level of political programmes and policies. There is a constant process of defining interests and testing ideas, discovering what constraints on policy exist in practice. It is dangerous to attribute too much rationality and intention to political leaders. There is little doubt for instance that the Thatcher Government was caught quite unawares by the depth of the slump. It made the best use it could of it, but it was certainly not planned that unemployment should double and output collapse in the dramatic manner they did. Governments have a very insecure control over events and the Thatcher Government is no exception. The thinking of its key group of economic ministers has been shaped by the debates on the social market strategy, but the implementation of policy has been influenced by numerous other factors as well. The government has been engaged in a long war of position in which it has advanced when it could, but occasionally has been obliged to retreat.
There are also problems about reading policies as expressing interests. It is not clear how Heath and the Alliance 'represent' industrial capital while Thatcher 'represents' banking capital. As Ross himself argues in his latest article, it is more correct to say that different policies may find support from different interests at different times. The particular context is all important. Policies cannot be unambiguously defined as rational or irrational independently of different groups' perception of their interests and the changing economic situation.
There is a second point of disagreement. In assessing the predicament of the Conservative party I do not believe that the unfinished character of the bourgeois revolution [illegible]. [illegible] reason why this should be. That kind of industrial regeneration looks increasingly unlikely. Certain kinds of industrialisation that are now taking place are never likely to [illegible]. [illegible] economy [illegible] the world division of labour. There is tremendous scope for modernisation of the British economy but this does not mean that political power will be delivered into the hands of a new industrial bourgeoisie.
The second error is a related one. The hundred years' decline should not be treated as though it were a single process, as though everything that has happened in the last hundred years can be traced to the 'failure' of the industrial bourgeoisie to complete the bourgeois revolution. If that were the case the remarkable progress of the British economy in the last hundred years of its relative decline would be hard to explain; particularly the very significant modernisation that took place in the 1930s and 1940s which equipped Britain with modern mass production industries in such fields as cars, chemicals, and electrical engineering.
These mistakes in analysis flow from a failure to see how dramatically internal political developments have been shaped by external development. The role of the Conservative Party has not been constant in the last hundred years. Before 1914 the Conservative Party was not a representative of banking capital. Its programme of social imperialism was rightly seen as inimical to the City's interests. Only in the 1920s with the general reorganisation of the Right did the Conservative Party emerge as a somewhat grudging upholder of free trade and the gold standard. Protectionist and imperialist sentiment, however, remained strong in the party and the party did not let slip the opportunity to pursue protectionist policies in the 1930s. Only after 1945 did it emerge fully committed to the orthodox foreign economic policy of the British state.
But this was not simply a triumph for banking capital. It also reflected two fundamental changes. The first was the Atlantic Alliance; the final surrender of Britain's role as dominant world power to the United States, and the reconstruction of a liberal world economic order which took place under the American aegis. This not only removed the possibility of an independent imperialist economic policy, it also laid a crucial foundation for the long boom which saw major new developments in the world division of labour, and the rise to prominence of multinational companies. Secondly, the fusion between banking capital and multinational industrial capital in Britain makes it difficult to speak of a major rift between an industrial and a financial bourgeoisie. It makes the identification of a specific 'national' bourgeoisie in Britain difficult — the 'decisive sections' of both banking capital and industrial capital have been internationalised, they are detachments of a wider army. The major problem of the most recent phase of British decline has not been Britain's absolute technological backwardness and stagnation; Britain's industrial companies have been among the world's top companies. The problem has been the direction of investment, research and innovation, and the growth in the international operations of the leading industrial companies.
All this makes Thatcher and Thatcherism a rather less irrational policy for the 'decisive' sections of the bourgeoisie. Nevertheless Ross is right to describe it as a high risk policy. At the end of last year it did look doomed. The obstacles to rebuilding support sufficient to win a second term, and carry through the second phase of the programme, appeared formidable. The Alliance was emerging as a real alternative, and a potent threat to the Conservatives' mass support.
The obstacles to the long-term success of Thatcherism are still formidable and its achievements to date are still modest. But the Falklands war has transformed the immediate political prospects. It has breathed new life into the old Tory coalition as a national party. If the Conservatives can hold onto some of this upsurge of support, then a second term is within their reach. But the underlying weakness of the British economy remains, as does the political problem of reversing its decline. The Falklands war may give Thatcher the second term which the monetarist management of the economy might otherwise have denied her. But it does not in itself solve the problem or remove the crisis of representation; it merely puts off yet again the day of reckoning.
ANDREW GAMBLE teachers politics at Sheffield University and is the author of Britain in Decline (Papermac, 1981) and co-author with Paul Walton of Capitalism in Crisis (Macmillan, 1977).