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International Socialism, Autumn 1979


Jonathan Bearman

Anatomy of the Bennite Left

(Autumn 1979)


From International Socialism, 2:6, Autumn 1979, pp. 51–70.
Transcribed by Marven James Scott.
Marked up for by Einde O’Callaghan for ETOL.


The forces behind the “Alternative Strategy”

Anthony Wedgewood Benn, Privy Councillor and member of Government for ten years, has emerged as the recognised leader of the Labour Left. Supported by some key groups: Independent Labour Publications (henceforth ILP), the Institute for Workers Control (henceforth IWC), the erstwhile Public Enterprise Group, the Cambridge Political Economy Group, the Cambridge Economic Policy Group and the Labour Co-ordinating Committee; they are united by the same basic underlying perspective – that of British national economic development. The assumption that if Britain can break the chains that enmesh it into world capitalism it could lead to comparatively unrestricted national reconstruction and thereby retrieve the position of a major industrial power. In this article I will explain how the whole panoply of measures espoused by the Bennite Left, ranging from nationalisation of the top twenty-five companies, to withdrawal from the EEC all stem from this vigorous strategy, I will argue that if ever implemented it would subject the working class to untold rigours and barbarities. In so doing, I want to place the Bennite Left and this strategy in the context of a serious attempt to regroup and re-define a left reformist position inside the Labour Party after the heavy blows and defeats suffered by the Bevanites in the 1950s.

Brian Sedgemore, one of Benn’s closest associates, has streamlined the propositions of the various groups into an “alternative strategy” of eight points [1]: import controls, an end to sterling’s role as a reserve currency, price controls and incomes policy, planning agreements, muscle to the National Enterprise Board, industrial democracy, public ownership of the financial institutions, and maintenance of Labour’s social programmes. Sedgemore has since declared the purpose of this strategy: “The strategy is concerned ... with achieving and sustaining economic growth, through socialist planning of trade, industry, finance and social programmes.” (my italics) [2]

On a cursory glance the supporters of this programme on the Bennite left may seem to consist of a few small pressure groups, but as been a gauge of their success that in recent years, their arguments and schemas have gained a deep resonance throughout the Labour left and have even exerted a pull in sections of the wider left. [3] Indeed, within these confines it has taken the lead and maintained it for some years. The policies adopted by Labour Party Conferences and those upheld by the Tribune Group have tended to be those pioneered by these groups.

Of all those groups involved in this work, though, it has undoubtedly been the Institute for Workers Control that has been the most influential. In the past it went about this by engaging the hierarchy of the trade unions in a series of conferences and pamphlets. [4] But nowadays it places increasing emphasis on bringing Combine Committees and alternative plans within its orbit.

The best known case of support given to combine committees and alternative plans by the IWC is that of Lucas Aerospace. Here sponsorship has included publication of the alternative plans, regular speakers (mainly Mike Cooley) from the combine committee at meetings, culminating in token commitment by the Labour Party, voiced in a speech given by Norman Atkinson on behalf of the NEC. Such formal recognition seems to be the eventual goal of all campaigns and struggles taken on by the IWC: and there have been plenty of them, though not as successful as Lucas Aerospace. Other instances are: the alternative plan of the Hull and London Dock Workers Control Group (The Dockers Next Step, 1969), the alternative plan of the Bristol Siddeley Engines Shop Stewards Combined Committee (The Aircraft Industry and Workers Control), the Scunthorpe Steel Workers Group (The Threat to Steel Workers), the Sheffield Steel Workers Group (The Steel Workers Next Step), and, more recently, that of the Vickers Shop Stewards Combine Committee. [5]

At the same time the IWC has carefully nurtured a debate with the Communist Party. The Labour Party, having no groups in industry since the 1920s, requires some kind of machinery, so an alignment with the CP in industrial terms remains of critical importance. Hence the past debates with Bert Ramelson, [6] the pamphlet by CP shop stewards Bernie Passingham and Danny Connor, Fords: Shop Stewards on Industrial Democracy and the attendance of many CP members at IWC functions (e.g. Syd Harraway). Furthermore, in addition to the CP, and in order to establish a wider periphery, Spokesman has produced a sister series of pamphlets embracing Pablo, Mandel, Goldmann, President Boumedienne, Tamara Deutscher and Sartre. [7] This might appear tangential, but they do all share some aspect of reformist connotations, and therefore, serve a purpose. However, the great-bulk of IWC material and activity is generated by a small circle that control the organisation – Ken Coates, Tony Topham, Michael Barratt Brown, John Eaton, Audrey Wise, Stuart Holland and John Hughes. In this respect, on a closer inspection, the IWC, for all its fine talk about participation is a small, closely-knit organisation run by a few people.

The smaller university-based groups such as the Cambridge political Economy Group (which includes Bob Rowthorne) and the Cambridge Economic Policy Group (which includes Terry Ward) have primarily undertaken specialised work: the former on how to smash the chains that interlock Britain into international capitalism, and the latter on public expenditure, the PSBR and the Treasury’s financial management. There is also Holland’s Sussex Unit which is investigating accountability and the ways in which multinationals will circumvent planned trade. Outside this research they mean little.

As for the Labour Co-ordinating Committee, it was launched amid a blaze of publicity at the last Labour Party Conference with support from NUPE and the TGWU. It was to serve the purpose of linking together the multifarious groups throughout the Labour Party, locally and nationally; “let a thousand bloom,” heralded Tribune. But it did not live up to expectations, shrinking into a small group mediating between the other pressure-groups, planning motions and elections for Labour Party Conferences. [8] What kind of mobilisation it can authorise behind a programme – if any – is open to debate, but clearly it will act as a brake to the development of a real mass movement. Members of the tight National Committee are Tony Benn, Frances Morrell, Audrey Wise, Stuart Holland, Brian Sedgemore, Michael Meacher [9] and a representative of the IWC.

Finally, there is Independent Labour Publications (formerly the Independent Labour Party). After many years of stumbling about the wilderness, dwindling in numbers, then returning to the fold with a changed name, it envisages a role for itself in re-forging the crumbling mass base of the Labour Party. This is quite a brave aspiration for a group of no more than a couple of hundred at most, and it does have a monthly paper, Labour Leader, through which it hopes to coagulate the Labour left – which the more establishment Tribune is incapable of doing. Moreover, since some kind of mobilisation is recognised as a necessary factor by the theorists of the Bennite left – necessary that is for thrusting through a legislative programme – the ILP hopes to equip itself as the appropriate vehicle.

The prospect of creating an “extra-parliamentary” movement has appeared relatively exciting and has attracted a small but noticeable infusion of new blood into the ILP: witness Peter Jenkins, Geoff Hodgson and Peter Hain. But this promotion of extra-parliamentary action is never at the expense of abandoning Parliamentary action. For the ILP, as for all these groups. Parliament and the State remains the focus and fulcrum for change. Even “Peter Hain, who confesses to be primarily concerned with extra-Parliamentary action, supports this “dual approach”. Their aim has been to initiate a campaign to recruit activists who would otherwise be drawn into revolutionary politics. Put simply; if groups in the Bennite Left want to build some kind of extra-parliamentary movement they need a core of activists. But these are missing precisely because successive Labour lefts have so abjectly failed, and the prospects for the present animal don’t, as yet, seem too bright either.

Britain’s Specific Crisis

The roots of the Bennite Left lie in the breakdown of the post-war consensus of social democracy between the Tory and Labour Parties, a flexible and malleable one based on the integration of the workforce by voluntary means. In the Labour Party, debate over social democracy mainly turned in relation to Crosland’s theoretical landmark, The Future of Socialism. [10] In the Tory Party it was adhered to by sections of the ruling class and found spokespeople in the emerging Tories around Harold Macmillan, such as Woolton, Hinchingbrooke and Butler. In the 1930s, Macmillan had even entertained the idea of a Centre Party under the leadership of Herbert Morrison, and his book, The Middle Way (1938), contained many social democratic proposals that became gospel in the years of the post-war boom. The coal owners, steel masters and railway magnates were jettisoned as the giant companies rose and came to the forefront representing shifts and changes in the character of the ruling class: a class that was now prepared to enlist social democracy in the circumstances of boom.

The breakdown of social democracy occurred with the slide into world crisis, its death being administered by the Wilson Government of 1966-70. The overall rise in living standards that had proceeded under conditions of boom could no longer be afforded. Increasingly, pressure built up among the ruling class for the application of coercion to maintain profit; hence the 1966 wage freeze, In Place of Strife, and so on. As the crisis sank deeper in the 1970s the Tory and Labour Parties were rife with arguments on how to restore the competitiveness of the British component of the world economy. There was considerable splitting and regroupment. In the Labour Party there has been an uphill struggle to re-create a serious left reformist presence that has been lacking since the late fifties. There has thus been a period of uneven activity starting in the late 1960s as the Institute for Workers Control, other peripheral groups and to some extent Tribune, worked to establish a defined and reasonably coherent left reformist strategy that includes state capitalism and command of the economy. It is bound up with a trend that sees the State becoming increasingly a dynamic and productive capitalist, a move that is represented by Benn, Holland, Sedgemore and company.

The Bennite left argue that the present world crisis is in reality a compounding of several crises. There is a financial crisis, an industrial crisis and a social crisis which, in turn, are subdivided and categorised into “the world crisis” and “Britain’s specific crisis”. It is the premise of the Bennites that “Britain’s specific crisis” – which is primarily an industrial crisis – can be encountered separately. This crisis is not a spin-off from the world crisis, though it is exacerbated by it, but “simply a manifestation of the deep-rooted structural problems that have plagued the British economy and British society for the last century.” [11]

Their reasoning runs something like this: in the last century it was laissez-faire policies that served the interests of national economic development, stimulating industrial capital at the expense of agrarian capital. But when the industrial capitalists were faced by major rivals buttressed and nurtured by state action such as the USA and Germany, they sought refuge in protected markets in colonies and neo-colonies. But throughout the whole of the past century it is claimed that British capitalists – with the exception of the two world wars – retained a diligent hostility to state intervention.

This, however, is simply not true. The State consistently intervened in the inter-war years on the side of employers to cut living standards and maintain the profitability of British industry in the world crisis. And today the State is doing the same thing again. What disturbs the Bennites is the fact that when the post-war boom “took-off” British capitalists swept aside State interference, neglected investment and set out to reap the benefits unhampered by processes of rationalisation. For them, this is the reason why now, amidst world crisis, Britain is marked by “low investment and an outmoded industrial structure” and “wage militancy”. Tony Benn has stated this position well: “The lack of capacity, loss of markets to foreign competitors and contractions of jobs from which we now suffer follows years of low investment in British industry.” [12]

The terms of the reformist argument begin to emerge: an overriding concern for the competitiveness of British industry. Indeed, “Britain’s specific Crisis” is a crisis of competition. Bill Warren and Mike Prior, two members of the right wing of the CP, in a pamphlet highly regarded in left reformist circles, Advanced Capitalism Backward Socialism, have this to say on the matter:

“British capital has been on the economic defensive not only nationally but also internationally, with Britain’s share of world trade declining more rapidly than any other country and with the British market being persistently threatened by large scale imports of foreign imports of foreign manufacturers which have been both more competitive and of better quality.” [13]

This line of thought suggests that British capitalists have put up a dismal performance and have fallen short of their mission. They are now investing their money in property or profitable outlets abroad. Stuart Holland in his major work The Socialist Challenge, claims that multinational companies have written off Britain as a location for large-scale industrial expansion and are shunting funds and jobs out of the country. Consequently, Britain has a declining industrial base and is gradually sinking under the weight of the world crisis. [14] Benn, Cripps and Morrell have strikingly described these effects:

“The heart of the problem is that the British manufacturing industry, the primary source of our income is trapped in a spiral of decline, and after thirty years of low investment is contracting under its own momentum. Britain’s economic and industrial crisis springs directly from this devastating trend to contraction whose symptoms are inflation and unemployment. And this problem must be completely distinguished from the present recession although it is likely to be accelerated by it.” [15]

The result has been that the only way to achieve a balance of payments surplus is by cutting back living standards, leading to stagnation and unemployment. Yet this is by no means a purely British affair. Ruling classes all over the world are in a state of demoralisation to a greater or lesser extent depending on the health of their own particular segment. The ruling classes of weaker segments such as Egypt and Turkey are in a condition of utter despair; but also due to the nature and penetration of the crisis areas of the more advanced countries are suffering decline: for example parts of Ohio in the United States, Silesia in Poland, Alsace in France, the Ruhr in Germany, Natal in South Africa, etc. The different groups competing for control of the pieces of territory are doing so on the basis of their ability to command it and sustain it competitively. This is exactly what Benn and left reformism are about in Britain. For them, the way to make Britain competitive is by (1) massive investment and (2) incorporation of the working class into a strategy for economic development. This, they believe can only be achieved if the State takes hold of the economy. They also believe that they are the people to execute it since their base is amongst the working class.

The chains that bind us

The Bennites believe that what is preventing them from curing these peculiarly British ills is the fact that the British segment is interlocked into the world economy. It is on these grounds that the Cambridge Political Economy Group has attributed the successive failures of Labour Governments in pushing “progressive” legislation to “international links which have in the past – in 1931, in 1948–51, and in 1966–70” – entrapped them. [16] This argument is not free from its contradictions. For if it is true that Britain is so deeply entwined and enmeshed into the world economy that treatment of the “specific crisis” is being prevented, Government policy hamstrung etc, etc, then how can this “specific crisis” – that of lack of investment and industrial decline – be separate, or as Tony Benn would say, distinguishable, from the very same world system and its crisis. The argument is a nonsense and should be despatched immediately. The lack of investment, decline of industry, contraction of the manufacturing base are part and parcel of the world system and not any British system. If they were to try and tear out the British component from the others in an effort to isolate the “British crisis” and resolve its problems the consequences would be catastrophic for the working class.

Yet this is exactly what they propose to do. The measures with which they plan to isolate the British segment are these: ending sterling’s role as a reserve currency, withdrawal from, or emaciation of EEC powers and the nationalisation of leading companies. The reasons behind these proposals are best developed by Michael Barratt Brown in his key work, After Imperialism. He firmly believes that “every attempt in the past to win advantages overseas which has involved holding back productivity at home has worsened Britain’s position.” The argument is developed with further evidences:

“Thus the flood of capital overseas at the end of the nineteenth century and in the years just before the First World War held back investment at home. The re-establishment of sterling as a world currency linked to gold after 1925 checked the expansion of the economy at home by undermining British exports; the attempt to do so again after 1951 has once more been at the expense of investment at home and of the competitiveness of British exports.” [17]

It is in this context that we can best understand the demand for the withdrawal of sterling as a reserve currency. Finance and industrial production are seen as contradictory. The British support of financial interests has been at the expense of industry. The Bennites represent the interests of industrial capital and for them the primacy given to the Pound Sterling has made British exports uncompetitive and the repercussions have been the loss of established markets. Moreover, the international monetary system, so carefully constructed at Bretton Woods in 1944, is now in tatters. Since the sixties it has gone from gradual erosion to chaos and crisis, formally collapsing in 1971.

Since 1971 there have been several reserve currencies, of which sterling is one. Like other reserve currencies, it remains prone to the adverse effects of speculation since interest rates are forced up as states compete for the funds of multinationals (something like two-thirds of the flows in world trade). The consequence has been that British goods have become increasingly uncompetitive and the balance of payments sinks further into deficit. All of which means that if the Bennites want to repair industrial competitiveness, sterling can no longer play the role of reserve currency – a view shared by many right-wing economists.

The assumption that “planned” trade can contribute to national economic development, is based on an analysis of Imperialism that completely ignores its intimate connection with protectionism. Indeed Michael Barratt Brown sees it as a consequence of free trade:

“The British Empire was not built as a result of the pressure of monopoly capital to invest overseas when profits fell at home. The Empire was first established by merchant adventurers, and maintained and extended by free traders anxious to open up and keep open to free trade the markets of the world.” [18]

And he is not alone in arguing this way. Bill Warren became a leading protagonist of this argument [19], claiming that industrialisation in the backward countries took place because of the transference of capital and technology, which engendered and promoted the spread of capitalist relations and productive forces. In other words they were transmitted or diffused and, in turn, stimulated indigenous national economic interests to assert themselves. Since independence these interests have striven to become fully-fledged national capitalisms and have been reasonably successful. It is maintained that the result has been the withering away of the dominance of the centre over the periphery. Warren has underpinned his argument with numerous “facts” and figures on the industrialisation of these countries, but in each case fails to demonstrate or convince that these are independent developments. It is a misleading exercise, for what Warren upholds as independent development – joint ventures and the participation of local capital in foreign enterprises – is in reality a form of dependent development.

To be fair to Barratt Brown, his techniques of analysis are different, but like Warren he arrives at the same conclusions: an understanding of the world system as a series of essentially independent segments developing “their” industries. For example see what this quote discloses: “The underdeveloped countries must be permitted to develop their industries behind protective walls until they are truly equals.” [20]

This was false when it was written (in 1963), but it has been proved to be quite wildly wrong by the fate of the non-oil exporting third world after the 1974–5 crisis (for which see Nigel Harris, World Crisis and the System, International Socialism, series 1, no. 100). As a result support for the Warren thesis among development economists is very thin on the ground today. In spite of this the Bennites continue to base their strategy on it, for Britain is seen able to wrench itself free from other parts of the world system and embark on a course of national reconstruction. For Barratt Brown and the Bennites this means a transformation from market mechanisms to planning. There will be planned trade, planned jobs, planned investment, a whole matrix of controls. Britain is envisaged being able to plan its development in a fairy-tale world free from international links.

It is in the context of planned trade that we encounter import controls. As part of the envisaged planned trade system, they could be operated in various ways; by penetration ceilings for specific industries, timetables, an import standstill scheme, or limiting the annual increase in imports. How this would even help national economic development, though, is a matter of some doubt. It is not just a matter that cutting imports redistributes unemployment (this can be quite justified in national terms), but the fact that it merely accelerates the crisis, for it reduces the number of trading exchanges and therefore there will be less outlets for British goods. The result of course is unemployment.

However, they do not see it this way, but a system working on a multilateral basis for “expanded volumes of mutually beneficial planned trade exchanges of goods and services with all those countries, Scandinavian countries, Communist countries, underdeveloped countries, that are prepared with us to plan their economies with us ...” [21] To control this system of planned trade they are specifically seeking the establishment of a State trading monopoly that will place orders for export to fulfil trade agreements, to exercise import controls, to monitor all transfer prices of imports and exports and to set priorities for imports and exports.

The hostility of the Bennite left to the EEC has been well publicised. They hold it responsible for economic deterioration in the following respects: (1) devaluation which raises the price of UK imports as well as lowering UK export prices; (2) the higher cost of EEC imports; (3) the onerous UK contribution to EEC funds and (4) the increasing flow of capital from the UK to the EEC. The EEC has made industry based in Britain less competitive, not only because of the switch to higher costing imports, but because capital exports have shot well-ahead of capital imports in real terms. But the crux of the matter for the Bennites is that membership of the EEC is incompatible with a planned economy, and continued membership prevents them from engaging in the structural changes that they want to make. Withdrawal from, or at least emaciation of EEC powers are therefore high up on their agenda.

For a public enterprise economy

When there are no conditions of boom, national industrial growth depends on increasing one’s share of the existing, perhaps contracting, world market. The Bennites are committed to doing this by making Britain more competitive. For this purpose private capital is ruled out because of its abysmal record in the past. The dominance of private capital and the market is to be replaced by the dominance of state capital and planning.

Stuart Holland has depicted this new order, somewhat euphemistically, as a “public enterprise economy.” However the degree to which capital based in Britain will be competitive hinges on the success of two vital planks in the strategy: substantial investment and incorporation of the working class into this strategy.

In this part I will examine the “public enterprise economy” in two sections: first concentrating on the aspect of investment; secondly on the incorporation of the working class.

The cornerstone of this “public enterprise economy” is the nationalisation of the leading companies. This is not a matter of desirability, they argue, but fundamentally necessary because hitherto these companies have operated in ways that have made Britain uncompetitive. Indeed, for Holland Britain has been undermined all round; in its fiscal and monetary policy, balance of payments, advanced technology industry, the effectiveness of state aid and subsidies for industries and regional development. In other words, private enterprise sabotages “the general autonomy of Government to plan the economy.” [22]

Accordingly, the State must take control of at least a sizeable proportion of “home based” multinationals. They estimate that something in the region of 20-25 leading companies would have to be nationalised to create a sufficient “bridgehead” to command “the economy.” It is from this base that the State will have the leverage to direct economic developments and plan investment for industrial regeneration. [23]

From this standpoint, they reject the present structure and mode of operation of the nationalised sector. They explain that the present nationalised industries were acquired to ensure the general conditions of production. As such they have been demoted to the status of the “poor relation” of private capital, providing lucrative contracts and the like. For them, all this must end. Public Enterprise must assert itself; rise from the ashes of Morrisonian subservience. [24] They see the State playing the dominant part in productive capital. Of course none of this is new; much has been taken, adapted and extended from the experiences of economic planning in Europe: from the Industrial Reconstruction Institute in Italy, the Institute for the Development of Industry in France and the Society for National Investment in Belgium.

Together with the National Enterprise Board and planning agreements, the nationalisation of top companies forms a package of proposals that originally came to the forefront in 1973. It was sponsored by the alliance of the Public Enterprise Group and the IWC and, on receiving the support of the Labour Party conference, became part of Labour’s Programme 1973. However, under pressure from the Shadow Cabinet and the right-wing (who were busy contemplating their electoral image at the time) the proposal for nationalisation of the top companies was traded off for a manifesto commitment to the less contentious NEB. [25] Initially, the NEB was designed as a major instrument of government intervention and planning in industry. Here were it’s functions as laid-out (by Benn) in the Industry Bill [26]:

a) establishing, maintaining or developing, or promoting or assisting the establishment of any industrial enterprise;

b) promoting or assisting the re-organisation or development of an industry or any undertaking in an industry;

c) extending public ownership into profitable areas of manufacturing industry

d) promoting industrial democracy in undertakings which the Board control;

e) taking over publicly owned securities and property which are taken over.

As things turned out, the NEB, planned as a major vehicle for transforming industry, was converted into little more than a merchant bank. In fact it has proved to be very useful to the ruling class by supporting important, but unprofitable business. The obvious case is that of British Leyland, where the profits of the producers of components, such as Lucas, would be hit if it collapsed. But the same goes for other concerns the NEB supports. However, at the same time, it must be offset by the burden of financing unprofitable firms by taxing profitable business. One action the NEB has not taken has been to seriously eat into the profitable areas of manufacturing industry. This is because without the other measures in the package it has inevitably become engulfed in a sea of private capitalist hostility, and proved open to manipulation by the ruling class.

As we have seen, the proposition for the nationalisation of leading companies was on the grounds of establishing a large enough base to ensure supremacy of its economic strategy. But this still leaves substantial sectors of private industry outside its grip. It is to integrate these businesses into the overall strategy that planning agreements are devised. As such, they are not new, and have been used in the past by Germany, Italy and France amongst others, but they have not been compulsory and therefore’ tended to be ineffective in guiding industry. In Britain such a system would be compulsory, acting as a bargaining process between Government, private and public enterprise. In this way the Government would pressurise for an investment or modernisation programme, or for rationalisation and extra capacity, or for the location of a new plant in a specified area. It is argued that this system would have a considerable counter-cyclical effect amidst recession, as induced investment would insulate British industry. Holland expects that planning agreements, along with a “truly mixed economy”, will bridge the gap between the “intention” and the actual performance of large companies in investing, by overcoming what he calls “hesitation”. To co-ordinate all this, he proposes some kind of latter day Department of Economic Affairs (with a National Plan of course) and, at the apex, a Cabinet Committee for Economic Affairs. [27]

Another example of British capitalists pursuing the interests of finance capital at the expense of home based industrial capital has been the outflow of capital. Brian Sedgemore has explained that the Treasury has always attributed the highest priority to sterling. In conjunction with the Bank of England it has engaged in currency manipulation to force the Governments hand in changing course. The consequence has been a decline in the viability of British manufacturing, and thus what Tony Benn has called “de-industrialisation”. Sedgemore put it this way:

“The first problem is that laissez-faire financial institutions, inadequately and inexpertly controlled by the Bank of England, will always and forever create difficulties for governments in controlling credit, in carrying out sensible monetary policies, in tackling monetary inflation and in providing a financial planning framework for Labour’s industrial strategy.” [28]

Obviously, if Benn is to pilot a new course, all this must change. He firstly intends to break the strength of the Treasury – which has thwarted previous government strategies. He would then bring the Bank of England under closer control, proceeding to the nationalisation of the major banks and the overall re-structuring of banking and finance.

Most of these themes, developed in the early seventies, were expressed in the Opposition Green Paper (1973) which included the municipalisation of building societies, the nationalisation of the London Clearing Banks, the nationalisation and re-organisation of the major insurance companies under a state holding company – the British Insurance Corporation, and the nationalisation and reorganisation of the Scottish, Northern Ireland and British Overseas Banks under another state holding company – the British Bank – to make two viable commercial banks: an overseas bank and a development bank. [29]

It will be obvious by now that while the measures in the package to construct the “public enterprise economy” involve a considerable degree of change in respect to property relationships, what they do not embody is a transformation of the relationships of production. This is clearly shown in the case of bank nationalisation, where the prime concern is to make macroeconomic management easier. Holland is impressed by the French and Italian models, where competition between public and private banks has been encouragingly successful. He similarly points to the achievement of Mussolini’s bank nationalisation in 1933!

The Bennites are aware that these planned nationalisations amount to state capitalism, but tentatively suggest that these relationships will be qualitatively changed with the development of “workers control”. This, however, is simply not the case, for workers will not control production. It is an attempt to give workers responsibility for production, certainly, but not control of production. This will remain in the firm grasp of the bureaucracy. In this sense, “industrial democracy” or “workers control”, is a response to the increasing unprofitability of British industry, not a challenge to capitalist relations of production.

With the return of crisis to world capitalism in the 1970s it was obvious that living standards would have to be cut to maintain profitability in Britain as elsewhere. But given the combativity and wage militancy of the working class, the key question posed to the ruling class was how to counter this. With the collapse of social democracy they turned to more coercive means such as In Place of Strife and the Industrial Relations Act – none of which proved to be very successful. For the state capitalists in the Labour Party and Communist Party the same problem is raised, for if Benn can’t keep wages down British state capital loses out to rivals. Warren and Prior have summed the situation up this way: “Working class strength is a major factor in preventing a solution to the competitive problems of British industry. “ [30]

But how, then, do the Bennites plan to solve this? There are two elements to their strategy: incomes policy and workers control. Warren and Prior term the former a “working class incomes policy”, where workers, in return for wage restraint, will receive the benefits of “responsibility for control with the workplace.” Others such as Holland and Ken Gill see matters in a similar light – a bargaining process between trade union leaders and the Government, where wage restraint is traded for social reforms and the like. Brian Sedgemore argues the case this way: “Are we to argue that free collective bargaining is the Ark of the Socialist Covenant?” And then adds a rider, or perhaps a warning:

“This does not of course mean that trade unions will no longer engage in wage bargaining at national or plant levels. It could simply mean that such bargaining would take place in a framework that has been agreed between themselves and the Government. It certainly means that trade unions must look beyond wage militancy if they are to serve the interests of their members. “ [31]

From this we can see that the responsibility is placed on the trade union bureaucracy to control and discipline the movement. In return these leaders themselves are to be integrated into the process of drawing-up the “national plan.” Yet the strategy itself goes beyond making it incumbent on Moss, Alan, Tom and the boys to keep the rank-and-file in check, and extends to a determined attempt to incorporate whole sections of the working class into the strategy. By building support amongst the middle ranks, an alignment with the CP, and integrating combine committees and alternative plans, wage militancy may be undermined and also an effective way of guaranteeing increased labour productivity will have been found. The purpose of both an incomes policy and “workers control” is to derail workers militancy by diverting workers into responsibility for production in the workplace.

The Bennites have developed quite a mythology around workers control. The struggle against capitalism is often pitched in terms of the struggle for “workers control.” Benn and the IWC have been quick to relate the Levellers, Diggers, Captain Swing, the Tolpuddle Martyrs, the new unionism and even Tonypandy to the present campaign for “workers control.” For example, in 1976 Benn spoke in a testament to the Levellers at Burford Church, Oxfordshire. He used the occasion to connect them with “workers control”: “The Levellers would immediately see the relevance of industrial democracy, by workers control and self-management, as a natural extension of the political franchise to replace the power of the new industrial feudalism.” [32]

There are many other instances of this kind of image building by Benn – an exhibition of his able qualities as a publicist – which gives him both the semblance of being the defender of British traditions and “workers control” the appearance of being the apex of the historical struggle of the working class. The notion has become encapsulated in a stream of platitudes: “decision making being rooted where it belongs,” “workers realising their potentials,” etc., etc. Benn himself has claimed that it will “create the opportunity for more satisfying work,” [33] and Audrey Wise has concluded that: “It is only when we are successful in our striving for workers control that we will be able to say that we have reached a socialist society.” [34]

Peter Hain and Simon Hebditch claim that: “Genuine workers control can obviously only operate at shop-floor level ... it can neither be handed down benevolently from the top, nor can it be imposed on the population by a Party.” [35] But this is manifestly not how it is seen by the majority of Bennites. “Workers control” is to be implanted from above, distilled into a pre-conceived framework as a necessary prerequisite for increased competition and production. All effective power is to reside in the bureaucracy as can be seen from this definition of responsibilities by Benn, Cripps and Morrell: “The Government and public agencies must accept responsibility for planning, the funding, manpower policy, location of jobs and provision of public utilities and services that would accompany such an investment. “ [36]

”Workers control,” then, amounts to the most curtailed form of responsibility in the workplace. The result will be that workers organisations will be rendered impotent and resistance undermined. For state capitalists, “workers control” is needed to pump the arteries or the system will collapse into stasis, precisely because this form of incorporation is a mechanism for increasing labour productivity. This purpose is clearly demonstrated by this comment from Tony Benn:

“It is no longer true to suppose that salaried management will always be hostile to the movement for industrial democracy if the case is properly argued and put across, including its relevance to productivity.” [37]

Some conclusions

A full and adequate conclusion would be beyond the scope of this text, but I shall try to encapsulate and consider some of the main points. And in particular, comment on the chances of the Bennite Left.

So far I have argued that the Bennites are the first serious left reformist presence in the Labour Party since the Bevanites were crushed in the 50s, and that their position is defined in terms of an “alternative strategy” for “national economic development.” That this position is based on a false proposition that there is a separate “British” crisis, that is merely aggravated by the world crisis, rather than being an integral part of it. And further, that they believe, if Britain can but break the chains that interlock it into the world economy, it will be able to navigate a course of vigorous national reconstruction.

From this we can conclude that the position and strategy of the Bennites has been developed as a response to the uncompetitiveness and unprofitability of British industry and, accordingly, competitiveness and profitability are the criteria by which the success of their strategy is to be measured. For them, this situation has arisen because British capitalists have abjectly failed and lost faith in their mission, and are now preoccupied with finance, property speculation and frittering away their money on other distractions. Consequently, Britain has a declining industrial base, low investment, poor productivity, is fractured by wage militancy, and is now more or less written-off as a major industrial location by multinationals. Therefore, the Bennites argue for the replacement of this dejected and parasitical ruling class with a bureaucratic formation, a state capitalist class that is supposed to be capable of reversing the trends towards the contraction of industry and fall in the profitability in Britain.

The results of this strategy would be catastrophic. Firstly, it would amount to turning Britain into a large company operating on the world market where Britain would compete with such savage labour exploiters as Brazil, Taiwan and South Korea. It would be a constant and desperate struggle to keep above water. Secondly, the only way to survive would be by making Britain more and more competitive, which means massive investment and accelerating productivity.

What, though, if the workers rebelled? Where would the Bennites stand then? As we have seen, the Bennites have been aware of this predicament from the outset. The “alternative strategy” is designed in such a way that it has carefully embraced the role of workers, planning to incorporate them in the self-same strategy by way of “workers control.” By saddling workers with responsibility for production in the workplace – though little or no power outside that – it would be workers themselves that administered their own exploitation. The result of this would be to undermine workplace organisation transforming it from a vehicle to defend workers into a framework to enforce production. But even so, supposing workers still rebelled? Any upsurge of “wage militancy’, waves of strikes and protests and other actions would ruin the competitiveness of British industry. The bureaucrats would strive their utmost to maintain that competitiveness and, in the last resort, it would come to violence and suppression as they fought to sustain their command.

Against the Bennites we must pit our own arguments. There is no specifically British crisis: what is happening in Britain is part of a world situation, one which has hit some countries less than it has Britain (e.g. Germany) and which has hit some other countries much harder (e.g. Turkey, Egypt etc.). Talking about a specifically British crisis is nonsense – and chauvinistic nonsense at that.

Secondly the implication of this theory – that one should try to isolate or insulate the British sector of world capitalism from the rest – would, if ever put into practice, lead to greater burdens and sacrifices for workers in Britain. Import controls might for instance force workers to buy highly priced shoes from Northampton instead of cheap shoes from Seoul. And for what? So that British capitalism can be regenerated? OK then let us suppose for a moment that these sacrifices do lead to a renewed competitive British capitalism. Precisely because it would be more competitive it would put renewed pressure on capitalists outside Britain forcing them to cut their own workers living standards, increase unemployment, and so on. A Bennite economic policy would not herald the end of workers’ sacrifices – it would only add further to them. It would not be a recipe for ending the anarchy of capitalist competition, but on the contrary yet another factor that would add to it on a world scale.

Finally the character of a state capitalist “public enterprise economy” would not be altered even if carried out with “workers control.” To believe otherwise is to completely misunderstand how capitalism works. In volume 1 of Capital, Marx argued for instance, that the role of the capitalist was confined to being the mere “personification of capital” – that is, it is only in so far as he actually follows the needs of capital – by exploiting his workers, accumulating capital etc. – that he is able to go on being a capitalist at all. [38] It is the laws of capitalism that make the capitalist behave in the way he does, not the other way about. That is why Marx does not change his account when the form of management alone changes, whether it is from the individual capitalist to the joint-stock company, [39] or from either to a workers’ co-operative. [40] So long as competition – which Marx sees as capital’s “inner essence” [41] – remains, then so too does capitalism. Benn would not abolish that “inner essence” but add to it. “Workers control” would therefore not be the basis of a new and socialist form of society, but a wretched way of incorporating the working class into a very old and familiar form of society – capitalism.

On the face of it “workers control” sounds very radical – indeed revolutionary – but revolutionaries defend a very different thing altogether. For us the struggle is for workers power, and while that does involve workers taking over the factories (though, crucially, from below), it is inseparably connected with the smashing-up of the old state apparatus and its replacement with Soviets, workers councils etc. For Benn, by contrast, “workers control” is there to strengthen the existing state apparatus. Workers power and workers participation in capitalist management are not broadly similar but are directly opposite to each other.

But it is clear that over the next few years Benn will become the major focus of opposition to the Tories – and to the Labour right. Already this has begun to happen. In November this year the Bennites are holding a conference in Manchester to discuss their plans for action. Benn himself is a practised campaigner and an able publicist who will seize his opportunities. The Bennites, though not a cohesive grouping, will exert a strong pull throughout the left and this will intensify in the coming months. No doubt some of the flotsam of the British left will find this appealing and be sucked in.

Bennism has seemed even more attractive because of its notional commitment to the “mobilisation of the Labour Movement” behind the “alternative strategy.” For this reason they have tried to engage support from the union bureaucracies, have built up support among combine committees and have maintained the alignment with the CP. All of which makes Benn’s chances of becoming a serious alternative appear a fairly bright prospect.

The danger with a genuine mass mobilisation is that it might “spill-over” and fall outside the ability of the Bennites to control it. Such a movement would then be bitterly opposed by the trade union bureaucrats who are complicit in this strategy; in particular, those of the TGWU and NUPE. But when Benn speaks about the “mobilisation of the Labour Movement”, what he is referring to is, essentially, official action, like conferences, motions, Parliamentary speeches, and perhaps the occasional rally. After Benn refused to stand for election to the Shadow Cabinet, an action taken to give him more room for manoeuvre, the first work he undertook was to plan with the Labour Co-ordinating Committee the motions for the next Labour Party Conference, to organise his speaking tour and arrange conferences with the IWC. It was not, of course, to build a rank-and-file movement. If Benn does want to engineer some kind of action inside the unions, then he will be basically dependent on the CP machine where it still exists. Even so, the CP machine is concentrated among the middle-ranks, and not the rank-and-file.

At the moment the odds are heavily stacked against the Bennites pulling off the leadership inside the Labour Party, and the signs are that the left is heading for some major defeats that will set them back several years. The first action, which has already started happening, is that the union bureaucracies turn off the taps on the money supply. The next is that the block votes will ensure that any fundamental changes in the Party structure are defeated at Conference. And thirdly, it is likely that the present calls for an inquiry into the organisation and structure will be successful, ultimately tipping the balance of the NEC in favour of the right-wing. Therefore, Benn’s prospects are not as bright as they may at first seem. Over the next few years the ability of the Bennites to project themselves as a significant alternative will be severely hampered as they become embroiled in internecine feuds in the Labour Party. Feuds that they will inevitably lose.

But while it is most unlikely that they will succeed in terms of the official machinery of the Labour Party, the fact remains that the debates surrounding them will have a very wide-ranging impact on the working class. With the forces of the SWP still so small, and with the CP in decline and disarray, the Bennites will inevitably be seen by millions who have never heard of the SWP, as the left alternative to Thatcher and Callaghan. To many their ideas will not only be attractive, but they will also be untainted by the record of dismal failure of the 1974-9 Labour government. Irrespective of their immediate success or failure in the party machine, they are bound to be a considerable pole of attraction. They may even succeed in sucking in significant layers of militants into the Labour Party and its periphery. As a consequence we will be able to win the argument with these people over the parliamentary road to socialism, only if we take on – and defeat – the pretensions of the whole Bennite “alternative economic strategy”. In the coming months this will become increasingly important.


1. Brian Sedgemore, The How and Why of Socialism, Spokesman, 1977, pp. 30–31. Sedgemore is Benn’s former PPS and ex-MP for Luton West.

2. Ibid., p. 31.

3. Elements of the revolutionary left are being attracted by the ideas of left-reformism, see for instance Hilary Wainwright and Huw Benyon, The Workers’ Report on Vickers, Pluto Press, 1979.

4. Take the case of Hugh Scanlon. He wrote The Way Forward for Workers Control, IWC, 1968, and Workers Control and the Transnational Company, IWC, 1970. Also Lawrence Daly, Until Mankind is free, in Bertrand Russell and Industrial Democracy, IWC, 1970; and Ernie Roberts, The Solution is Workers Control, Spokesman Pamphlets no. 19. Roberts is now MP for Hackney North. For the debate with Arthur Scargill (who vehemently opposes workers control) see Ken Coates, A Reply to Arthur Scargill, IWC, 1978, and the transcripts of Scargill’s speech to the IWC conference in Sheffield on April 15th 1978 in A Debate on Workers Control, IWC, 1978. While Scargill rejects “workers control”, he accepts most of the “alternative strategy” and is evidently willing to work with the Bennites. Finally, it is worth noting Joe Gormley’s support for workers control in The Miner, November/December 1977.

5. See also the pamphlet by the Bristol Aircraft Workers Study Group, A New Approach to Public Ownership, IWC, 1974. The Study Group was the product of discussions between Tony Benn and the BAC Joint Works/Staff Trade Union Committee. While aiming to provide a new form of nationalisation, it ended up instead with a blueprint for a maze of bureaucracy for organising the various tiers of consultation and negotiation – sectional committees for bargaining with plant management, full time officials for industry management and a grand “Controlling Council” of workers representatives subordinated to civil service professional management.

6. Bert Ramelson, Ken Coates, Tony Topham, Charlie Swain and Bill Jones, The Debate on Workers Control, 1969.

7. Michael Raptis (Pablo), Self-Management in the Struggle for Socialism, Spokesman, 1973; Ernest Mandel, A Socialist Strategy for Western Europe, IWC, 1974; Lucien Goldmann, Power and Humanism, Spokesman, 1970; President Houari Boumedienne of Algeria, The Battle Against Underdevelopment, Spokesman, 1974; Tamara Deutscher, Zuzana Bluh-zing and Ken Coates, Political Prisoners in Czechoslovakia and the USSR, Spokesman, 1974; John-Paul Sartre and Vladimir Dedijer, War Crimes in Vietnam, Spokesman, 1969.

8. The LCC has now started a regular broadsheet – Labour Activist. According to its objects, the organisation is supposed to “harness the power of our movement to bring fresh impetus and commitment to the fight for Labour’s basic objectives.”

9. Michael Meacher is MP for Oldham West and a former Trade minister. He wrote a key piece in New Statesman, 4th January 1974, entitled The Coming Class Struggle setting out the tasks needed to alleviate the “poverty trap.”

10. C.A.R. Crosland, The Future of Socialism, London 1956. Stuart Holland, by writing The Socialist Challenge (Quartet 1975), is clearly trying to supplant Crosland’s major critique with one of his own (on which see Colin Sparks’ article, The Reformist Challenge, IS 1:97).

11. Cambridge Political Economy Group (Michael Ellman, Bob Rowthorne, Ron Smith, Frank Wilkinson), Britain’s Economic Crisis, Spokesman, 1974, p. 6.

12. Actually Benn, Cripps and Morrell, A Ten Year Industrial Strategy For Britain, IWC, 1975, p. 5.

13. Bill Warren and Mike Prior, Advanced Capitalism Backward Socialism, Spokesman, 1975, p. 6.

14. Holland, op. cit., p. 77.

15. Benn, Cripps and Morrell, op. cit., p. 3.

16. Cambridge Political Economy Group, op. cit., p. 6.

17. Michael Barratt Brown, After Imperialism, Heinemann, 1963, p. 455. He has since updated some of his original inquiry by the publication of his Essays on Imperialism, Spokesman, 1972. But the moorings of his argument remain the same.

18. Ibid., p. 454.

19. Four articles form the basis of this polemic: Imperialism and Capitalist Industrialisation by Bill Warren and The Primary Commodity Boom by Angus Hone in New Left Review 81, 1973, and (countering this position) Current Myths of Development by A. Emanuel and Industry and the Third World by P. McMichael, J. Petras and R. Rhodes, New Left Review 85, 1974.

20. Barratt Brown, op. cit., p. 479.

21. See Michael Barratt Brown, Europe: Time to Leave – How To Go, Spokesman, 1974, p. 14. Geoff Hodgson, of the ILP, defends import controls on the basis of Ricardo’s Theory of Comparative Advantage. From this we can only infer that the purpose is to maintain British capital within the world division of trade.

22. Holland, op. cit., p. 77.

23. See the economic planning section of Labour’s Programme 1976.

24. This aspect is interestingly developed in Paul Foot’s review article of Herbert Morrison – Portrait of an Appalling Man, IS 66 (old series).

25. See Michael Barratt Brown and Stuart Holland, Public Ownership and Democracy, IWC, 1973.

26. Benn, Cripps and Morrell, op. cit., p. 6.

27. See economic planning sections of Labour’s programmes 1973, 1976 and 1979.

28. Brian Sedgemore, op. cit., pp. 12–17 and p. 46 (emphasis mine).

29. Holland, op. cit., p. 217. It was primarily Mikardo, in the early seventies, who was responsible for ramrodding these proposals through the committees of Transport House.

30. Warren and Prior, op. cit., p. 9.

31. Brian Sedgemore, op. cit., pp. 38–41.

32. The transcripts of Benn’s speech are published in pamphlet form by Spokesman, 1976. Spokesman has also re-published H.N. Brailford’s excellent volume The Levellers. Benn, more recently, has written the foreword to Dudley Edwards pamphlet The Soldiers’ Revolt, Spokesman, 1978.

33. Tony Benn, Industrial Democracy, IWC, 1975.

34. Audrey Wise, speech given at the IWC conference in Sheffield, April 1978. (Transcripts in IWC pamphlet no. 64, 1978).

35. Hain and Hebditch, op. cit., pp. 15.

36. Benn, Cripps and Morrell, op. cit., pp. 3–4.

37. Tony Benn, op. cit., p. 7.

38. K. Marx, Capital, Moscow 1961, vol. 1, p. 592

39. K. Marx, Capital, Moscow 1963, vol. 3, p. 429.

40. K. Marx, Critique of the Gotha Programme, Selected Works, Moscow 1963, vol. 2, pp. 30–31.

41. K. Marx, Grundrisse, Penguin, 1973, p. 414.

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