Chapter 1 – British Capitalism’s Post-war Crisis

Contents

So explosive were class relations in the post-First World War period that Britain appeared, on a number of occasions, to be on the verge of a general strike before 1926; in 1919, 1921 and 1925 in the run-up to ‘Red Friday’ to name but three. The roots of this heightened class polarisation were to be found in the changed relationship of forces between the main competing capitalist-imperialist powers issuing from this great conflict. First born amongst the major industrial nations, British capitalism came under intense challenge from the new rising star, Germany, and, in the first decades of the twentieth century, from the United States. British capitalism, more than others, desired and planned for war against Germany and its allies. In this way, it could deliver a crushing blow to the ‘upstart’, thereby enhancing its dominant position in the capitalist firmament.

However, it had reckoned without the tremendous development of US capitalism, which stayed out of the First World War just so long as it took the European powers to exhaust themselves and only then did it intervene. This established a superior position for US imperialism to the detriment of British capitalism, which was reflected economically, militarily and diplomatically in the post-1918 situation. This was not immediately evident as British capitalism was still able to rely on the super-exploitation of its ‘empire’. On the other hand, a revolutionary wave swept over Europe in the wake of the Russian Revolution, exercising a huge impact in Britain. The revolutionary upheaval – for that is what it was – of the period from 1911 to 1914 re-emerged, expressing itself in the inrush of workers into the trade unions, which filled out from four million members in 1914 to more than eight million by 1920.

The year 1919 was a period of revolution throughout Europe and even in the US. In Britain this was expressed that year in the actions of the engineering, shipyard and other workers, united under the leadership of the Clyde Workers Committee and the shop stewards in the struggle to shorten the working week “which everyone sensed was no ordinary strike”.1 The British ruling class feared an uprising and troops were rushed to Glasgow after the ‘Battle of George Square’. Clydeside workers were asking for a 40-hour week and the Belfast workers, who also joined the movement, were asking for a 44-hour week! In January 1919 the miners were also prepared for battle, demanding a 30 per cent wage increase, a six-hour working day and nationalisation of the mines with a measure of workers’ control. This in turn led to a revival of the Triple Alliance, formed during the First World War in 1915 but which had been largely dormant since. The combination of miners, railwaymen and transport workers was a new departure for the British working class. However, inter-union rivalries and the fact that the crisis did not develop at the same time in all industries meant that the alliance did not really work at that stage. But David Lloyd George, the Liberal Prime Minister, who led a coalition government of Conservatives, coalition Liberals and even 15 ‘Coalition Labour’ members of Parliament, took fright particularly at the threat of a miners’ strike, supported by the railwaymen and transport workers.

Mining Industry

The one million British miners constituted fully ten per cent of the labour force at this stage and the coal industry was the ‘root and trunk’ of British capitalism. The state of this industry and the conditions of the workers in it reflected the parlous state of British capitalism as a whole. The mines were under effective government control during the war but were returned to the owners, a group of ‘hard-faced’ brutal employers. The miners, however, had the sympathy of the majority of the population who supported the raising of the minimum wage from 50 shillings (£2.50) to 60 shillings (£3) a week. Lloyd George was an adroit representative of the British ruling class and well-schooled in the tradition of British capitalist rulers of bending when faced with hostile social winds. It has to be remembered that these developments were taking place against the background of a stormy industrial situation which infected even the police who went on strike in London and Liverpool, with unfortunately, the victimisation of the strike leaders later in the year. Every day in 1919 saw an average of 100,000 workers out on strike. Moreover, Lloyd George had witnessed himself the revolutionary upheaval which had infected even British troops, some of whom marched on Whitehall in 1918. Therefore, faced with the threat of a miners’ strike, the government set up a ‘Coal Commission’ under the chairmanship of Sir John Sankey.

This was to be the first of many ‘coal inquiries’. This has a topical ring because whenever governments, particularly Blair’s New Labour government in Britain, are faced with a difficult question the tendency is invariably to set up a ‘commission’ to bide time and dissipate whatever anger has been generated on the issue. However, the miners were in no mood for a long drawn-out inquiry and pressed for the commission to report quickly. Sankey decided to take the report in two halves with recommendations on wages and hours coming first. It suggested increases to miners’ wages, instead of an eight-hour day, a seven-hour one, with a six-hour day to come. By dividing the recommendations, by postponing the second part of the report on the organisation of the mining industry and ownership, they presented the miners with a dilemma. The miners’ leaders, in good faith, called off their proposed strike action to await the second part of the report. When it came, a bare majority of its members was in favour of nationalisation of the mines, although there was unanimous approval for public ownership of coal.

The ‘Labour’ representatives such as Sidney Webb and R.H. Tawney proposed joint control on a co-ordinating committee, while Sankey – a judge in the King’s Bench Division of the law courts but distinctly sympathetic to the miner’s aspirations – recommended management by district councils with only a minority of members appointed by the workers. The three miners’ representatives on the commission opposed giving any compensation to the owners of the land on which the collieries stood, while approving it in the case of colliery concerns themselves, whereas the three Labour representatives were in favour of compensation for all property taken over by the state! Marxists are not in principle opposed to compensation for the takeover of industries by the state but only on the basis of ‘proven need’. Full compensation to the ex-owners of industries that they have invariably ruined only cripples the industries when coming into the state sector. This was the experience of industries nationalised by the Labour government of 1945 to 1951, where lavish over-compensation was paid to the ex-owners and the boards of management were invariably made up of those, in the main, hostile to public ownership. This was, however, the music of the future in 1919. Lloyd George used the divisions over the ownership of the mines to kick the second part of the Sankey Commission report into the long grass. Capitalism, in general, is not prepared, unless forced to by active mass pressure, to take over even bankrupt inefficient industries as the example of the railways in Britain under the Blair government demonstrates. Today, there is an overwhelming majority of the population in favour of renationalisation of the railways, given its catastrophic safety record, the massive hike in fares and the plundering of its assets by the privateers. Blair has instructed his transport ministers that they can take whatever measures of state aid that are required for the railways “as long as you don’t call it renationalisation”.2 And there are sound reasons from a capitalist point of view why he adopts this position. Once one industry is taken over the planning that would follow this, even of a partial ‘state capitalist’ character, would provide a platform, a springboard, for workers in other industries, particularly those which were in danger of collapsing, to demand similar steps be applied in their industries.

This was particularly the case in 1919 and later. The coal industry only expressed in the most acute form the crisis afflicting British capitalism as a whole. It is true that the post-war boom of British industry provided jobs, with relatively low unemployment until perhaps the middle of 1920. Then deflation set in with a drop in prices, industrial retrenchment and the rise in unemployment. At the same time the miners were demanding higher wages to compensate for the rise in the cost of living during the war with the ratio of wages to output and the cost of living lower than they were in 1914. In 1920, the highs of industrial militancy intersected with a powerful demonstration of the raised political consciousness of the British working class with revolutionary implications. This was reflected in the setting up of Councils of Action to prevent British imperialism’s intervention in support of the Polish capitalists in the conflict against the Russian workers’ state. Such was the pressure that, incredible as it sounds today, the Parliamentary Committee of the TUC, the National Executive Committee of the Labour Party and the Parliamentary Labour Party joined together and warned the Lloyd George government that “the whole industrial power of the organised workers will be used to defeat this war”.3

Black Friday

The Trades Union Congress together with the Labour Party held a special conference on 9 August 1920 which called for its whole industrial power to be used in the event of war against Russia. It called for the formation of councils of action. The National Council of Action held a meeting on 13 August attended by 1,044 delegates from trades unions, local Labour parties and trades councils. This was backed up by the actions of the immortal London dockers who blacked a ship, the ‘Jolly George’, which was intended to be used to ship weapons to Poland. This generated a tremendous fever within the working class, which frightened the right-wing summits of the Labour and trade union movement in Britain more than it did the capitalists. And this was not the last time that we would see such a reaction once a movement began to develop from below. The government retreated and the Councils of Action were put into cold storage. Nevertheless, a powerful example had been imprinted into the minds of the British working class, particularly of its leading and guiding layers, that would come into play both before and during the 1926 General Strike.

But, taken aback at the determination and audacity of the working class, and no doubt encouraged by the contrasting conservatism of the trade union and labour leaders, the government went on the offensive and introduced the Emergency Powers Act (EPA), which for the first time in British peacetime history gave the government sweeping powers over industrial disputes in order to maintain ‘essential services’. They were encouraged in this by the prevarication within the Triple Alliance. J.H. Thomas, ‘Jimmy’ to his bourgeois friends, General Secretary of the National Union of Railwaymen, played a perfidious role as a brake on the workers’ movement. This was a role he was to play again and again up to and during the 1926 General Strike. He had demanded that the Triple Alliance be vested with final authority to settle the miners’ dispute, when the time for negotiations arrived. With sure class instinct the miners refused – if only they had maintained this position during the General Strike when they wrongly ceded control to the General Council of the TUC – and came out on strike themselves. A few days later the railwaymen, notwithstanding Thomas’s dithering, also came out on strike.

But by early 1921 the industrial slump had firmly set in which severely affected the coal industry. The government chose this time to hand control of the mines back to the mineowners. With the one million unemployed used as a whip against the miners, this was the moment that the owners decided to introduce savage wage reductions. The resistance of the miners led to a huge lock-out, which was answered with the miners once more calling for the Triple Alliance to act. The TUC and Labour Party condemned the government and the owners’ actions and were compelled to support the miners. The approach of the government this time, however, was entirely different to 1919 as they in effect prepared for civil war against the working class.

When Trotsky warned later, in 1925, particularly in his marvellous book Where is Britain Going? of civil war and the possibility of a general strike, this was dismissed as “Moscow phantasmagoria”. Yet, according to a well-known historian: “In 1921 the military preparations to combat the strike were plain for all to see. A State of Emergency was declared, reservists were called to the colours, machine guns were posted at pitheads, and troops in battle order were sent to many working class areas.” He compares the government’s reaction to the 1921 display of militancy to its attitude in 1926 which he maintains was “positively pacific”.4 This was not true, as we will see; if there is any difference between 1921 and 1926 it did not lie in military preparations which were evident in both situations, but in the expectation, if not the certainty, that by 1926 they could rely on right-wing trade union leaders to betray and the quiescence of the trade union and Labour Left.

Any doubts on the role of the trade union leaders were washed away by their action or lack of it in 1921. The leaders of the Triple Alliance sat in continuous session at the railwaymen’s headquarters. The key position of Miners’ Federation of Great Britain secretary was held by Frank Hodges. Formerly a militant, he moved to the right until at the time of his death in 1947 he left an ‘estate’ worth more than £100,000, which would make him a millionaire in today’s terms. The night before the strike was to begin, he suggested that a temporary settlement could be established on the basis of wages settled on a district basis. This was totally at variance to the miners’ executive’s insistence that there must be a national agreement. The executive immediately disowned him but that was used as an excuse by the other union leaders, particularly Thomas, to call off any action in support of the miners. This event marked the end of what workers bitterly called the ‘Cripple Alliance’. This became fixed in the consciousness of the British working class, as the infamous ‘Black Friday’, which saw the miners betrayed. They struggled on for about three months until they were forced back to work by starvation and exhaustion with wages slashed and agreements torn up.

What followed was a mild ‘festival of reaction’ in industry. Wage reductions were enforced on whole groups of workers: shipyard workers, builders, seamen. Cotton operatives were locked out. By the end of the year six million workers had imposed on them average wage cuts of six shillings a week. Also engineering workers were locked out. This was aimed at crushing the newly-formed Amalgamated Engineering Union (AEU). Membership of the unions dropped by nearly three million. At the same time unemployment began to rise and social services were slashed so that the unemployed in particular were plunged into misery.

The causes of the collapse of the Triple Alliance and the defeat of the working class at this stage were political: the unwillingness of the trade union leaders to mobilise the full power of the organised working class in particular in support of the miners. In turn, this was ultimately founded in a lack of understanding of the gravity of the underlying crisis of capitalism as well as the craven pro-capitalist position of some like Jimmy Thomas, described as “one of the best waltzers in London” in a capitalist paper. He lived on the Astor estate and often “shared Lord Derby’s box on Grand National Day”.5 But the collapse of the Triple Alliance was perceived in some quarters, even amongst the Left, and particularly the young Communist Party, as demonstrating a weakness, organisational in character in the main, at the top. This was to lead to the adoption of the mistaken slogans of firstly “More power” and later “All power” to the General Council of the TUC. This was to take on flesh through the campaign of the Communist Party for the replacement of the Triple Alliance with a more authoritative General Council of the TUC.

“All Power to the General Council”

The General Council was perceived as the general staff of the labour movement for the coming war against the bosses and their government. It was summed up in the slogan “All Power to the General Council”, which in 1926 meant vesting authority in the hands of right-wing trade union leaders and Left leaders who are here shown to be politically unreliable. This was to prove disastrous during the General Strike itself. While it is necessary sometimes for socialists and Marxists to fight for a strengthening of the official organisations of the trade unions, to seek to centralise struggles (national negotiations, etc.), at the same time this must always be counter-balanced by democratic control and the building of structures such as the shop stewards movement, which can more accurately reflect the ordinary members. This can act as a check on the leaders at the top, no matter how radical their credentials may be. For socialists and Marxists, whether or not the official structures should be strengthened is dependent on the concrete circumstances at each stage.

That is particularly the case in the heightened class polarisation evident in the period leading up to and during the General Strike itself, as it is today. The capitalists and their government have an array of weapons to ensnare, corrupt and, if necessary, to use to crush the working class and destroy its basic class organisations, the trade unions. To counter this, a militant, accountable and politically aware leadership must be built. This is why the Socialist Party and class conscious workers fight today for trade union officials to live on no more than the average wage of skilled workers and to be subject to regular election and recall. This should be combined with the building of powerful workplace representation and a shop stewards’ movement.

The workers’ councils (soviets) – witnessed in the Russian and other revolutions – are undoubtedly the most representative form of organisation of working class people seen in history. They first appeared in Russia in the 1905 revolution in St Petersburg and were inspired by the example of the committees established by the Paris Commune of 1871. It was the means of immediately gathering together a scattered mass of hundreds of thousands of people, previously having no organisational means of expression which had been denied to them under the tsarist autocracy. The left and working-class parties which existed at the time had a few hundred members with thousands who supported their ideas. These parties fought and argued against each other’s’ ideas. This made the need for a “non-party organisation absolutely essential… [which] had to be based on the broadest representation”.6

Since only industry linked the working class together, who organisationally were inexperienced, the representation to the soviet was adapted to the factories and plants. One delegate was elected for every 500 workers and was subject to recall, to be held accountable, by those electing them. Small industrial undertakings combined into groups for election purposes. The new trade unions which had been created sent delegates as well. However, the rules were not strictly kept to and in some cases delegates represented less than 500. This was a kind of ‘parliament’ of the workers, but much more democratic and representative than the tsarist duma (parliament) which met alongside it and competed for power with it.

Yet no organisational form in and of itself, separated from politics, can accurately express the views of the working class, particularly in a rapidly changing situation which characterises general strikes and revolutions. There were soviets in Russia controlled by those who were not prepared to break landlordism and capitalism, the Mensheviks and Social Revolutionaries.

This did not prevent the Bolsheviks under Lenin and Trotsky from raising the slogan “All Power to the Soviets”. This practically meant putting the class conciliators into power – the Social Revolutionaries and Mensheviks initially had a majority in the soviets – in order to show to the workers and peasants of Russia in action the limitations of their programme and their unwillingness to struggle to overthrow capitalism and landlordism. However, if they had left it there, the mere repetition of this agitational slogan would have been completely inadequate, would not have prepared the working class and poor peasants for the 1917 October revolution. They combined this call with criticism of the other parties – Mensheviks and Social Revolutionaries – at each stage and posed what the alternatives were. Moreover, the Bolsheviks worked to build up their support by going below, into the factories and workers’ districts to convince workers of their ideas.

In 1926, the model of Russia, the example of the revolution and ‘soviet power’, was a powerful factor amongst the working class and CP members. Therefore, superficial comparison between the General Council of the TUC and ‘soviet power’ could exist. Workers wanted to strengthen their organisations against the bosses. But when the right-wing trade union leaders were the ultimate defence of the bosses’ system, the slogan “All Power to the TUC” could become a trap for the working class. Even the mistaken slogan of ‘All Power’ would not have been so harmful in 1926 if the leaders, both left-wing as well as right-wing, were subject to searching criticism by the C P. This, unfortunately, was not the case, as we shall see.

The slogan “All Power to the General Council”, advanced by the young and politically immature Communist Party, particularly leading up to the General Strike, could in no way be compared to the slogan of “All Power to the Soviets”. The trade unions, by their very nature, were much narrower and sectionalised, as the events since 1918 had demonstrated, than would be the case in developed Councils of Action or soviets. While objectively the situation began to acquire many of the features of a revolutionary or pre-revolutionary situation in the lead-up to the General Strike, it had not yet matured into the kind of situation seen in Russia between February and October 1917. Then the floodgates of revolution, mass participation of the working class took place and soviets were created. Nevertheless, the tendency to form Councils of Action, evinced in 1920 in particular, and the formation of factory committees would have been a better starting point for the agitation, propaganda and approach of the CP rather than the misconceived “All Power to the General Council” slogan.

This is in no way a concession to the misconceived crude sectarian ‘rank-and-filism’ favoured by some Left organisations in the recent past in Britain. This took the form of counterposing rank-and-file organisations to the official union structures, boycotting elections to official positions, which if Left trade unionists had accepted, would have amounted to political abstentionism in the trade unions, thereby ceding control to the right wing. This is in a trade union movement where the official apparatus and leadership retains considerable authority amongst the membership! The trade union movement in Britain, the oldest in the world, traces its origins back to before the French revolution. These organisations acted as a mighty lever to raise the working class in Britain out of the muck and filth of capitalism to provide, at least, adequate if still deficient living standards for working class people.

Moscow and the Communist Party

The essence of a correct trade union policy for socialists and Marxists is to struggle at the base, particularly through the branches, in the workplaces and shop stewards organisations of the trade unions, and also to strive to win influence in the official structures of the trade unions. This was the case in the early 1920s and subsequently as it is today. But the mistake that was made by the young CP was to place too much faith in the Left union leaders. They did not sufficiently criticise and organise against not just the right but also the left-wing leaders of the trade unions in preparation for the mighty movement that loomed. This was not generally the case when the Communist Party had just been formed. It criticised, for instance, in a somewhat crude fashion, the Triple Alliance in 1920 because it was “in the main run by reformist leaders. A Triple Alliance strike means a general strike, and a general strike means probably a revolution… Remember that reformists will shrink back at the last moment.” 7 This was superior to the position which the CP adopted later between 1924 and 1927, but it was not a fully worked-out analysis or programme for the stormy events to come.

However, they were not entirely to blame for this. As we shall see, by the time of the General Strike the young militants of the Communist Party, who represented in the main the flower of the British working class at that stage, were misled by the mistaken policies of the Communist International (Comintern), then under the direction of Stalin, Bukharin and, earlier, even Zinoviev (before he joined Trotsky in the Left Opposition). Impatient at the slow development of the young C P, they exerted pressure which led to the formation of the Anglo-Russian Trade Union Committee. This was a bloc between the Russian trade unions and the General Council of the TUC, and particularly with its left wing. Only mild criticism was made of the leading Lefts, which did not adequately prepare the working class for the inevitable retreats that these lefts made during and after the General Strike. For Marxists, impatience, an attempt to skip over and artificially develop a small force into a larger one, can be a source of opportunism. In place of a friendly but firm and systematic criticism of the inadequacies of the Left, the Communist Party leaders were pressurised into an unprincipled bloc. This led to muted criticism of the Left, even when they gave more than adequate warnings in the run-up to the General Strike of their opportunism and adaptation to the Right within the General Council and the Labour Party.

The political rationale for this, both from Moscow and from the leaders of the CP was the need for a united front between the genuine revolutionary Marxist forces gathered around the Communist Party and other political trends, particularly of the Left. The united front was then a vital weapon in the hands of Marxists as it is today, in seeking to maximise the strength of, and unify the working class in the struggle against the bosses and their system. But it is not a panacea, a substitute for correct policies. It requires from its practitioners skill, an understanding of how and when to form such a bloc, and crucially, how to break it if the leaders at the top fail to prosecute the struggle to the end. A failure to adhere to this approach by the leaders of the Comintern and the young CP was to have fatal consequences in the great battle to come.