Can Labour learn to love the market?
As state socialism advances on all fronts, what is Labour’s real electoral future?
Labour Foreign Secretary and NATO founder Ernest Bevin had the Labour Party as having been born out of the bowels of the Trades Union Congress. Yet for a party so institutionally bound to a collective mass movement, the shadows of personality loom large across its history. Tony Benn was prone to insist, without a hint of irony, that politics should be about “issues not personalities”, but markedly more often for the left than the right, individuals came to symbolise the issues.
For many decades, far more important than whether a policy was admired by Tony Blair or championed by Jeremy Corbyn was whether it had been endorsed by Nye Bevan, the founder of the NHS, and was approved by his disciples to sit within the cannon of “Bevanism”. Indeed both Blair and Corbyn were wont to seek to cloak themselves in the “Mantle of Nye”, a garment that Harold Wilson donned as emphatically as he lit his pipe when facing accusations of “selling out” Labour’s traditional values. Not for nothing did Wilson and his fellow Bevanite, Employment Secretary Barbara Castle, name their planned trade union reform plan of 1968 “In Place of Strife”, a deliberate echo of Bevan’s most celebrated tract “In Place of Fear”.
Woven into the fabric of the “Mantle of Nye” has been the motif of Bevan’s support for the merit of public over private ownership, reflecting his belief in the superior efficiency of a planned economy. In Bevan’s last major speech before his death from cancer in 1960, Labour’s then Deputy Leader told its 1959 conference that the challenge to Britain economically “is going to come from Russia… [and] from those nations who, however wrong they may be – and I think they are wrong in many fundamental respects – nevertheless are at long last being able to reap the material fruits of economic planning and of public ownership.” Appalled by the Soviet Union’s gulags, show trials, and mass murder, during the 1950s British politicians still nonetheless feared apparent Soviet efficiency and effectiveness, underpinned by five-year plans. They wanted, economically, to imitate it.
It was not just Bevan who took this view. The Conservatives embraced central planning and bureaucracy as much as Labour. And British administrators, having lost an actual empire, saw in the nationalised industries the potential for another.
Pre-1939, the Conservatives created the Central Electricity Generating Board and set up similar public corporations to run the BBC, the Tote, and Civil Aviation. During the Second World War, when the future Conservative Cabinet Minister Oliver Lyttelton was asked by Labour’s Herbert Morrison what he would do with the coal industry, Lyttelton replied: ‘nationalise it’.
When during 1951-64, the economy failed to reverse its decline, Harold Macmillan took a more-corporatist-than-thou approach vis-à-vis Labour. It was the failure of Conservative corporatism and statism that Harold Wilson decried in his New Britain speeches of 1963-64, and in his paean to the “white heat of the technological revolution”. It was only in later decades that Western politicians came to realise that the Soviet Union was not just inhumane but inefficient too: the Stakhanovite feats of tractor production in Magnitogorsk began to seem less of an economic lesson to emulate.
But by the 1970s genuinely deliberative thinking amidst Labour’s policy debates became less possible as the party became mired in bitter factional infighting.
Labour’s left, rallying around their icon Tony Benn, demanded an ambitious programme of nationalisation. ‘A naive dream… of an omni-competent, all seeing government, which can then act to inform, instruct, guide and persuade the hundred thousand different entrepreneurial components of private industry into one harmonious equivalent of the Russian Gosplan” was the verdict of Benn’s Cabinet colleague, Labour MP Harold Lever. At Labour’s 1973 conference, delegates later exposed as members of the Troskyist Militant Tendency demanded the nationalisation of ‘250 major monopolies together with the land, finance houses, insurance companies and building societies… and the re-nationalisation of all hived-off sections of public owned industries without compensation.’ Offering the important caveat that “We are not, never have been and never will be, a party of confiscation…”, Tony Benn, speaking in the same debate, opposed the demand for the nationalisation of “250 major monopolies”, not on its merits but because of its scale, declaring that it “confuses strategy with tactics…” and Labour was “not ready” for it.
It will surprise many Labour activists, but Nye Bevan was not among those who denied the importance of a thriving private sector
Anthony Crosland had sought to steer Labour away from a dogmatic commitment to public over private ownership in his 1956 volume The Future of Socialism. He did so by differentiating between ends and means and arguing essentially that the changing world and the “managerial revolution” away from owner-managed capitalism had made nationalisation no longer a priority. The “commanding heights of private privilege and social separatism”, argued Crosland, were “far more commanding than the steel or chemical industry.”
Before Frank Field became the Labour MP most admired by Margaret Thatcher that accolade fell to John P Mackintosh, a brilliant and perceptive Scottish Labour MP. Mackintosh pointed out the fundamental flaw in Crosland’s position: the absence of any rationale for the existence of a thriving private sector within the mixed economy it professed to advocate. Writing in the Scotsman newspaper in April 1978, a few weeks before his shockingly early death, aged only 48, Mackintosh attacked the “basic error” of Croslandism in “talking endlessly about the distribution of wealth, its taxation and use for this and that but very little about the creation of wealth… the central task of justifying and producing a thriving mixed economy remains.”
It will surprise many Labour activists, but Nye Bevan was not among those who denied the importance of a thriving private sector. It was Bevan who played a crucial role during 1949 in opposing demands from the “Keep Left Group” of Labour MPs for Labour’s next election manifesto to commit to nationalising shipbuilding, aircraft construction, machine tools, parts of the motor industry and the high street banks.
As early as 1949 Bevan had declared to the party conference: “…We are vitally concerned with that private sector… unless the private sector is efficient it will drag the economy down. Therefore we have given our attention to setting the private sector free… It is of no advantage at all to a Socialist that private enterprise should be languishing.” Justifying and producing a thriving private sector within a mixed economy remains one of the central challenges facing Labour’s new leader, especially now that it has been put under so much strain by the necessary lockdown to tackle Covid-19. To tackle that challenge it may be that Labour’s new leader will need to don once again the “Mantle of Nye.” “Nye Labour” should never mean a festishisation of the market. But Labour needs to recognise its merits and to embrace its place within progressive politics.
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