Russell Haggar

Site Owner

Labour and Its Ideology 1945- 1979

 

Click here and here for articles on the Leadership of the Labour Party and the links

Core Principles of Socialism: Positive attitudes to human nature; critical analysis of capitalism; class inequality and poverty, equality, justice, liberty, community, cooperation, internationalism, collectivism public ownership

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Variants of Socialism: Marxism, Anarchist Socialism, Democratic Socialism, Social Democracy, New Labour?

Revolutionary Socialism and Evolutionary Socialism

Fundamentalist Socialism and Revisionism

Democratic Socialism and Social Democracy

Old Labour and New Labour

Similarities and differences between Socialism and other ideologies

1945-51 Labour in Power

The Labour Manifesto for the 1945 General election stated that “The Labour Party is a Socialist party and proud of it." In practice, however, numerous theoretical problems are involved in the definition of socialism and although the Labour Party has always contained socialists both in the Parliamentary Labour party and the extra-parliamentary party, it has been convincingly argued, despite the above pronouncement of the 1945 manifesto that the Labour party is described more accurately as a social democratic party where social democracy implies support for a relatively strong, interventionist and reformist state dedicated to the improvement of the life chances of disadvantaged groups but operating in a mixed economy which is, however , dominated by the capitalist private sector.

Labour's social democracy has actually undergone considerable changes in the period since 1945 and it is important to outline the different approaches to social democracy espoused by different Labour leaders. Especially important here are the ideas which underpinned the political programmes of the 1945-51 Labour governments, the revisionist theories of Tony Crosland, the "modernising socialism" of Harold Wilson, and the gradual development of the New Labour project especially under the leadership of Tony Blair. Such approaches received considerable support primarily from the Right and Centre of the Labour Party  but have  also been criticised from the left of the  Labour Party and from the far left as being insufficiently socialist.

 Those on the left of the Labour Party have sometimes preferred to call themselves Democratic Socialists rather than Social Democrats in order to signal their support for more radical Socialist measures and many theorists argue that this is an important distinction although we must note that once the Social Democratic Party was formed many more Labour Party supporters felt the need to define themselves as “Democratic Socialists” in order to distinguish themselves from the renegades in the SDP and that some theorists consider the boundaries Social Democracy and Democratic Socialism are rather blurred.

In practice, Labour governments of 1945-1950 and 1950-1951 are associated with important programmes of social and economic reform.

• Major industries such as Coal, Gas, Electricity, the Railways and Iron and Steel were taken into public ownership or nationalized as was the Bank of England.
• The scope of the Welfare State was significantly expanded in an attempt to deal with the problems of ill-health, bad housing, unemployment, inadequate educational provision and poverty. Labour policies were based primarily upon proposals in the Beveridge Report.
• More progressive income taxation combined with more generous social security payments were designed to increase income equality to some extent.
• Keynesian methods of aggregate demand management were used in a relatively successful attempt to maintain near full employment and steady economic growth which was to improve average living standards and help to finance the expanded Welfare State. [A little further explanation is required here]
• Greater attempts were made to involve both trade union and business leaders in government decision making process as a means of improving decision making processes.

Judgments vary as to the effectiveness of the social democratic strategies of the 1945-51 Labour governments. It has been  argued ,for example, that especially given the difficulties involved in post -war reconstruction that the Attlee governments succeeded in significantly changing the balance of economic power between the private capitalist sector and the state via its nationalisation programme  and  succeeded  also in radically improving the situations of disadvantaged individuals via its use of Keynesian economic policies to secure full employment and its greater expenditures on health, housing , education and social security. Among the critics some would claim that despite some set-backs between 1945 and 1951 social democratic strategies could nevertheless bring further advances in the future while others, often writing from a Marxist perspective point to what they see as the inevitable weaknesses of social democratic strategies which inevitably inhibit progress toward socialism

[Similar but different disputes surround the records of the Wilson administrations of 1964-66, 1966-70 1974-1974, 1974-1976 and the Callaghan administration of 1976-1979 . Even their supporters would probably have to admit that the records of these administrations were disappointing but in each case  serious economic problems restricted their freedom of manouevre such that it is claimed that , in the circumstances and with hindsight these administrations did as well as could be expected with some achievements to their credit[see later for details]. On the other hand critics have variously argued that serious strategic mistakes were made which inhibited the implementation of social democratic policies or that the failures of these administrations provide yet more evidence of the fundamental non-viability of the social democratic strategy. And what of Tony Blair and the Third Way? ]

In The Labour Party and the Struggle for Socialism [1975] David Coates, writing from a Marxist perspective, provides a critical assessment of the Attlee administrations of 1945-1951.His criticisms rest upon the following points.

• Although Labour did have a significant programme of nationalisation its rationale and scope were such that it would not reduce significantly the power of the capitalist class or the economic inequalities endemic in the capitalist system. Although the coal, gas......industries were nationalised Coates argues that Labour's aim in so doing was not to transform capitalist power structures but merely to try to ensure that these industries would become more efficient and productive than had been the case in the inter-war period .Neither did the nationalisation of the Bank of England imply that Labour was seeking to significantly reduce the powers of finance capital.

• The nationalisation programme left approximately 80% of the productive capacity of the economy in private hands and, if anything, strengthened the power of the capitalist class especially because very good financial compensation was paid to the owners of the industries to be nationalised. Furthermore

• Many Labour supporters and workers in the newly nationalised industries had hoped that nationalisation would involve a significant increase in the degree of workers control of these industries but the Labour Party leadership [in keeping with their Fabian- inspired beliefs in the importance of expert knowledge used for the common good] wished to ensure that it would be the newly appointed Boards of Directors and managers who would retain control, and indeed the directors and managers appointed to run the nationalised industries were often the self-same people who had run the industries prior to nationalisation. Even if this was not the case, they were mostly recruited from private sector companies although a minority of trade unionists were also recruited to the boards of the nationalised industries but it would not be difficult to recruit trade unionists who were no great supporters of workers' control. It followed that the nationalized industries would be run on basically capitalist lines and the absence of workers' control was said by Coates to be a key factor which undermined support for nationalisation especially among the workers actually employed in these industries.

• It may be agreed that Labour’s Welfare State reforms did significantly improve social conditions for the poorer sections of society but once again critics both from Democratic Socialist and Marxist positions have argued that the success of these measures must not be overstated. Thus despite these social policies
  1. the distribution of income and wealth is still unequal;
  2. poverty, measured relatively is widespread;
  3. class and ethnic differences in educational achievement show that inequalities of education opportunity remain;
  4. even though female students have in several respects overtaken their male counterparts, females are still at a relative disadvantage in some subject areas where career prospects are especially good;
  5. health and housing inequalities remain;
  6. welfare state systems in operation may reflect the interests of health service professionals such as doctors, nurses, teachers and social workers more than the interests of the people they are supposed to serve;
  7. these systems may be excessively centrally rather than locally controlled and may provide little chance for clients of the systems to participate in decisions about how the systems are actually run;
  8. major errors have been made, for example in housing policy where slum clearance was followed by the building of high rise flats which actually created more problems than they solved;
  9. not enough money has been spent on social policy in any case partly because slow economic growth related to the onset of stagflation[ simultaneous inflation and unemployment] appeared to undermine the whole social democratic approach to social policy;
  10. It is recognised that social policy plays important social control functions which have often been overlooked in more optimistic accounts of social policy.

In relation to the above 10 points whereas democratic socialists continue to hope that radical and effective social policy reforms are possible within the framework of a  reformed capitalist mixed economy most Marxist theorists certainly would not agree with this !

• Anthony Crosland and The Future of Socialism [1956]: Revisionism in the Labour Party.

The policies of the 1945-51 Labour Governments attracted criticism from the Right Wing and the Left Wing of the Labour Party and the Right Wing criticisms are associated most notably with the Revisionist theoretical analysis provided by Anthony Crosland in “The Future of Socialism” [1956] and with the leadership of the Labour Party by Hugh Gaitskell between 1955 and 1963. You will note important similarities between Bernstein’s and Crosland’s variants of revisionism but there are also some important differences.[Bernstein’s revisionism is considered elsewhere]

The main elements of Crosland’s revisionism included the following:

1. By the mid C20th capitalism had changed in ways not predicted by Marx such that his analysis of C19th capitalism had become irrelevant to the analysis of capitalism in the mid C20th.
2. The nature of the capitalist class had changed as a result of the managerial revolution [or the divorce of ownership from control] such that large capitalist firms were increasingly controlled by specialist managers whose objectives included the job security and satisfaction of their workers and the public image of their company as well as its profitability.
3. The recent history of capitalism indicated that it could provide for significant improvements in working class living standards rather than the immiseration or pauperisation of the working class as predicted by Marx. Indeed according to Crosland poverty had been virtually abolished in the UK by the 1950s.
4. Capitalist class structures had become more complex and the growth of the middle classes undermined the Marxist theory of class polarisation which suggested an increasing economic and social gap between the Bourgeoisie and the Proletariat.
5. Points 2, 3 and 4 meant that there was therefore no reason for inevitable conflict between managers and workers equivalent to the class conflict which may well have existed in the C19th.
6. Whereas Marx had claimed that states in capitalist societies inevitably governed in the interests of the dominant economic capitalist class Crosland argued in accordance with the theory of democratic pluralism that states in modern capitalist societies were neutral and that elected Labour governments would be able to use the powers of the state to regulate capitalism as appropriate [e.g. by anti-monopoly legislation and welfare reform] in order to improve the economic and social \conditions of disadvantaged citizens.
7. The experience of the 1945-51 Labour Governments indicated that capitalist firms and industries were in general more flexible, dynamic, efficient and better able to respond to changes in consumer demand than were the recently nationalized industries which Crosland saw as comparatively inflexible, bureaucratic, wasteful and inefficient.
8. Crosland believed therefore that Socialism was to be achieved not by increased public ownership but by the government’s promotion of capitalist efficiency and social responsibility which in turn would increase economic growth and provide the resources which would enable socialist governments to increase equality.
9. Nationalisation was at best a means to an end and according to Crosland an ineffective means to an end whereas the end or goal or ultimate objective of Socialism was Equality, not Public Ownership. But what did Crosland actually mean by Equality?

 Labour in Office 1964 -70

Hugh Gaitskell died unexpectedly in 1963 and was replaced as Labour Leader by Harold Wilson and Labour narrowly won the General Election of 1964. Wilson also could be described as a revisionist but whereas Gaitskell had wished to remove Clause 4 of Labour’s constitution [the nationalisation clause] Wilson wished only to disregard it in the interest of party unity. Wilson aimed to present a modern technocratic image and argued that it would be possible to modernize UK society via the increased use of science, technology and economic planning. The dynamism\ of the private sector would be increased; the rate of economic growth would be increased; and economic equality would be increased via the redistribution of the increased growth of output disproportionately to the poor. There would also be some redistribution of income to the poor via the taxation and social security system

Here we can see clearly the key strategy of Social democracy: not increased nationalization but a more dynamic capitalist economy generating faster economic growth and gradually generating greater equality. Unfortunately, however, the rate of growth of the UK economy was slower than that of most of our European competitors from the 1950s onwards and this continued in 1964-1970 which undermined Wilson’s overall strategy for redistribution through economic growth. Labour won another General Election in 1966 but was defeated in 1970

The Labour Party 1970-1979

In the early 1970s while Harold Wilson and other Centre -Right Labour leaders continued to support the politics of moderate Keynesian social democracy, the Labour Party at its grass -roots activist level was moving significantly to the left with groups such as the Campaign for Labour party democracy pressuring  for constitutional reform   designed to enhance the scope for left wing policy making and major trade unions increasingly sympathetic to more interventionist, egalitarian economic and social policies. Consequently the power of the Trade Union votes at the Annual Conference helped to ensure that Labour fought the 1974 General Elections on radical manifestos containing, for example, highly redistributive taxation policies and planning agreements with private industry.

In practice, however, the limited enthusiasm for radical initiatives of  the subsequently elected Labour governments of 1974-1979 combined with their deflationary policies to ensure that radical manifesto policies were not fully implemented and instead Labour relied on a Social Contract with the Trade unions  which initially promised economic and social reforms in exchange for wage restraint  but led ultimately to increasingly tight pay policies which restricted the living standards of many of their supporters in an attempt to reduce the rate of inflation which was quite successful. Harold Wilson resigned as Leader in 1976 and was replaced by James Callaghan who continued with essentially Wilsonite policies. However opposition to Labour's incomes policy culminated eventually in the so-called Winter of Discontent which was a major factor contributing to Labour's General Election defeat of 1979.

Click here  For more information on the Labour Party in the Wilson and Callaghan Years (The Labour Party 1945-1997)

Click here  for the Guardian’s Obituary of Lord Dennis Healey

The Labour Party 1979- 2008

More recent information on Labour Party ideology and policy can be found on this site by clicking here which takes you to a document entitled Social Democracy and New Labour.