From International, Vol. 7 No. 1, January 1982, pp. 26–27.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Andrew Glyn & John Harrison
The British Economic Disaster
Pluto Press. 1980. £2.95
This book consists essentially of three intertwined parts: a description and analysis of the decline of British capitalism after the Second World War , first gradual and then more and more precipitate; an explanation of that decline and a critique of various cures proposed for it including the ‘Alternative Economic Strategy’ of the left Social Democrats; and a more general attempt to explain the new slump of the world capitalist economy, of which the ‘British economic disaster’ is, in the final analysis, part and parcel.
As we see it, the first part is excellent and generally unassailable. It furnishes splendid ammunition for the working class and Marxists in Britain in their struggle against the capitalist system and the current attempts to place the burden of the slump on the backs of the wage earners. The austerity offensive whose objective is to set the clock back a third of a century on the living standards and social services of the foiling masses represents a social disaster which would merit an indictment every bit as savage and revealing as the one Glyn and Harrison have developed of the economic one.
The second part is good but gives rise to objections which arc partially the result of the authors’ weakness on crisis theory in general. They examine several current explanations for the economic decline of British capitalism but discard them all too rapidly simply by showing up the inadequacy of each in turn as a ‘monocausal’ theory. Britain’s economic decline is certainly not due only to a consistently lower rate of profit than in Germany, Japan. France, or the USA in the period from 1948 to 1968. It is not due only to a generally higher rate of capital export from Britain than these other countries. It is not only due to a general conservatism of British industrialists – itself connected to the historically determined specific nature of British imperialism and the structure of British finance capital. It is not only due to British capitalism missing the boat with the Common Market in 1958. But to state that none of these is the sole cause – which is obviously correct – docs not mean that taken together they do not constitute the main causes, which we consider to be the case.
The alternative answer provided by Glyn and Harrison, admittedly in a rather hesitant way, that ’restrictive practices’ were stronger in Britain than among its main competitors, seems untenable. The degree of free competition in Japan, to take but one example, or in the key industries of the USA, was certainly no greater than in Britain. If anything, monopoly control over the Japanese economy and these US industries (steel, oil, automobiles, electrical machinery, aerospace, petrochemicals, etc.) was stronger and not weaker than in Britain – if only because the weight of foreign capital not under the control of indigenous finance capital was much smaller there than in Britain during the period 1948 to 1968, and therefore the degree of monopolistic (‘inter-imperalialist’) competition on the internal market was much smaller.
Glyn and Harrison’s critique of both monetarism and neo-Keynesianism is excellent. But the authors overshoot their goal when they criticise the struggle for the 35-hour week by saying that, in and of itself, it provides no cure for the crisis. Of course it does not – but nor does nationalisation. There is no final ‘cure’ for the crisis without overthrowing capitalism. And in order to achieve this, it is not sufficient to nationalise 250 companies (even under workers’ control and without compensation). You must also destroy the bourgeois state: take away the political and economic power of the bourgeoisie, and destroy the legal, constitutional. and economic basis of private property and the accumulation of capital. Otherwise, as the recent history of Portugal illustrates only too well, capitalism can remain very much alive despite the most massive nationalisations.
All this, however, is no argument whatsoever against raising the nationalisation of 250 companies as the key transitional slogan on the economic field. Similarly, it is no argument against raising the demand for a 35-hour week without loss of pay or speed-up as a key transitional slogan on the social terrain. Massive structural unemployment is a murderous scourge of the working class. To oppose it by all means available is the elementary duty of class-conscious workers. The 35-hour week is simply a concretisation of the demand of the Transitional Programme for a sliding scale of working hours: with unemployment at about 10 per cent, a real 10 per cent cut in the working week would amount to a redistribution of workload among all available wage labourers.
What would be the actual concrete effect should such a demand be realised through a big working-class struggle would depend on a number of factors. But it is as crucial to fight for this objective today as it was in Marx’s time – and with Marx’s enthusiastic support – to fight for a ten-hour day and then, between 1890 and 1918, for an eight-hour day.
The weakest part of Glyn and Harrison’s book is the theoretical one: their attempt to provide an explanation of the slump, the long wave with a stagnating tonality, which hit the international capitalist economy from the late sixties and early seventies. They reject the classical Marxist explanation of this slump based on the operation of the tendency of the rate of profit to decline. They substitute for this an explanation in which overaccumulation of capital combined with a scarcity of labour provoke a ‘profit squeeze’ through the explosion of real wages.
Glyn and Harrison’s critique of the law of the tendency of the rate of profit to decline – as a result of the continuing increase in the organic composition of capital and the impossibility, in the long run, of the rate of surplus value being sufficiently increased to catch up – is confused and weak.
While correctly criticising the confusion of physical (technical) relations and value relations, the authors themselves fall into this very trap by using as indices (p. 176) capital stock per worker or ‘value of capital per worker’, instead of comparing the value of capital stock operated upon by a worker with that workers’ wages. They tend to reduce constant capital to fixed capital, which assumes that raw material costs remained a fixed part of total production costs throughout the postwar period which is an impossible assumption (and one which would provide quite unwarranted support for the ideological attempt of the bourgeoisie to present the explosion of oil prices as an exogenous deus ex machina rather than seeing it for what it is: a logical part of a normal cyclical movement which we encounter again and again in the history of the capitalist economy). They tend also to equate variable capital with ’the wage bill’, thereby eliminating from their account the problem of the growth of unproductive wage labour in the capitalist economy – a phenomenon which is far from accidental.
For a long time now, we have addressed a challenge to all critiques, Marxist and non-Marxist alike, of the law of increasing organic composition of capital: please show us just one branch of production in which wage costs are a higher fraction of total production costs than they were 50 or 100 years ago. If you cannot, and I think you cannot. isn’t that sufficient proof that the long-term trend of technical progress under capitalism is labour saving from the point of view of value? And isn’t this what the law of increasing organic composition of capital is basically all about?
The substitute explanation of the slump which Glyn and Harrison offer is, moreover, even weaker than their critique of the law of the tendency of the rate or profit to fall. Granted, there is a substantial unevenness (disparity, dissimilarity) between international mobility of capital and international mobility of labour in bourgeois society on account of ‘social constraints (p. 11). We have repeatedly made the same point too. But you can not demonstrate, either empirically or theoretically, that suddenly the reserves of additional labour dried up in the second half of the 1960s.
The post-war period saw one of the largest, if not the largest, wave of international migration that capitalism has ever witnessed. Why should ‘social constraints’ have mysteriously stopped this wave at the level of a three million influx of wage earners into Britain, France and Germany (after a first influx of ten million in East German refugees) instead of, say, four million or five million? Reserve labour was still available on a massive scale in Greece, Turkey. North Africa, and even the Iberian peninsula and Southern Italy (not to mention the Indian subcontinent). Is there any evidence of a hall in immigration around 1965? And, as to political constraints, are we to believe that Enoch Powell turned the tide of world history single-handed? Is increasing xenophobia and racialism not the result rather than the cause of unemployment: did it not follow the turn of the economic tide rather than preceding it? And how do you explain that the ‘profit squeeze’ seems to continue up to this very day despite 30 million unemployed in the imperialist countries?
Undoubtedly, as has always been the case during the second phase of a long wave, the high level of employment in Western Europe and Japan strengthened the labour movement and made further increases in the rate of surplus value more and more difficult. But this was a contributory factor to, rather than the main cause of, the decline in the rate of profit. We should add that in the main imperialist country, the USA, residual unemployment at the height of each cycle actually increased from 3 per cent in 1953 to 4 per cent in 1956, 5 per cent in 1960, and 6 per cent in 1970.
A much more useful approach than that adopted by Glyn and Harrison is to analyse the specific nature of capital accumulation in each phase of a long wave, to see how normal and logical (both in terms of the ‘logic’ of capitalism and the ‘logic’ of Marxist theory) it is for ‘innovative’ investment to be replaced first by ‘vulgarising’, then by ‘rationalising’ investment: for monopolistic surplus profits (technological rents) first to appear then disappear: for the organic composition of capital first to slow down, then to reassert itself. We also see how there are limits to the rise of the rate of exploitation which slows down precisely when the rise in the organic composition of capital is stepped up: it is here that the level of employment and the strength of the labour movement obviously come into their own – but this is a far cry from the ‘profit squeeze’ thesis.
All this said. Glyn and Harrison have written a book which is extremely useful and stimulating. It shows that Marxism is once again being developed in a creative way, that parrots are out and critical thought is back with us. We shall come nearer and nearer to a rounded Marxist theory of crisis – which Marx unfortunately found no time to leave for us – the more debates there arc with serious Marxist economists like Andrew Glyn and John Harrison.
Last updated on 8 December 2020