The Gathering Storm

Chapter Thirty-Seven


IN 1989 all the signs pointed to the weakening of Thatcher and the falling apart of her government. This was revealed in the dramatic resignation of Lawson in October 1989. We commented:

Thatcher faces the deepest crisis in her decade of power. She can boast of being the most unpopular prime minister since polls began. Her Chancellor has resigned and even her favourite TV interviewer, Brian Walden, persists in asking awkward questions about his departure. (1)

The real reason for Lawson’s resignation was that he could see the consequences of his and Thatcher’s policies and the economic catastrophe which loomed. We had drawn attention to this well in advance of Lawson’s clash with Thatcher.

Lawson jumped ship because he understood that a recession was coming and probably also that Thatcher’s days were numbered. Later he commented that the poll tax had also been an important factor in his considerations for resigning. He had, he claimed, always been opposed to the poll tax but kept his own counsel despite the suffering it was inflicting on millions of working people in Britain. One thing was clear; the resignation of Lawson was greeted enthusiastically by workers who saw it as an opportunity to ditch the whole government.

However, the leadership of the Labour Party was incapable of understanding the approaching crisis of world capitalism and with it the shattering of the grip of Thatcher. In 1989 they turned even more decisively towards the right. Neil Kinnock in a meeting of the NEC brazenly declared:

It (capitalism) is the system we live in and we have got to make it work more efficiently, more fairly and more successfully in the world market place. That is what the policy review is about and we shall reject any sort of naive shopping-list socialism. (2)

The Labour Party conference in October 1989 gave its stamp to Kinnock’s ideas, which have been built on first by John Smith and now by Blair. The GMB actually submitted a resolution to conference which gave the national executive (NEC) the go-ahead to reduce the union block vote and to take even more decision making powers out of the conference’s hands. This was opposed by us – we were still then able to be represented at Labour Party conferences in significant numbers.

One incident showed how far removed was the rightward moving Labour Party conference from the mass of ordinary working people outside. Christine McVicar from Glasgow Shettleston Labour Party was seen by millions on TV news bulletins when she tore up her poll tax payment book at the conference rostrum. This was not just an individual gesture. She was moving a resolution calling for Labour to back the mass campaign of non-payment. She defiantly declared to the conference:

Without the Tolpuddle trade unionists and the Suffragettes breaking the law, we wouldn’t be here at this conference… I’m ripping up my poll tax book not as an individual but as part of a mass campaign of non-payment. (3)

She was met with cheers from the socialist elements in the conference, and by jeers from right-wing Labour MPs and others. At this conference Militant was still able to attract 200 delegates and visitors to its traditional public meeting where £1,723 was collected for the fighting fund. However, the right consolidated its hold in November with the removal of Hannah Sell from the national executive of the Labour Party.

LPYS smothered

This in effect marked the winding up of the Labour Party Young Socialists. The “youth” conference which took place in 1989 was a stage-managed and rigged conference under tight right-wing domination and control. 132 voting delegates and 46 non-voting delegates attended. 

The LPYS had regularly attracted over 2,000 young party members to their conference. The right’s plans nearly fell apart when it was discovered at the last moment that their favoured candidate, Hayley Sadler, was not even a Labour Party member! 

Through blatant manoeuvres Hannah Sell was replaced by Alan Parry from Knowsley South Labour Party. 

The themes of the conference were: You must pay the poll tax, taking part in the mass non-payment campaign is irresponsible; You cannot build direct links with youth in the townships of South Africa; and The market can offer a lot to young people. 

Future movements of the youth would be channelled outside of the Labour Party. This was the consequence of the sabotage of the LPYS by the spiteful right.

Militant reaches Twenty-Five

In October, the continued resilience and indeed strengthening of Militant resulted in the production of a special 47 minute video marking the first 25 years of Militant. This was a highly successful venture and has been used numerous times as source material by other film makers in documentaries and programmes about Militant.

1990 was the beginning not just of a new year but of a new decade. Buoyed up by the Reagan boom of the 1980s and reinforced by the collapse of the Stalinist regimes in Eastern Europe the spokesmen of capitalism trumpeted “the final triumph” of their system. The Independent declared that the new year stock exchange rallies denoted “confidence that – as a system – capitalism is a winner” (5). Six months earlier the organ of American finance capital, the Wall Street Journal, commenting on the competition between capitalism and the “communist” regimes of Eastern Europe, declared simply: “We’ve won”.

Thatcher joined in: “The lesson of the 1980s is that socialism has failed.” Militant, on the contrary, contended that “notwithstanding this orgy of capitalist triumphalism, the decade now beginning will be one of the most convulsive periods in human history.” (6)

This was not blind faith. Marxism is the science of perspectives, rooted in a sober and objective analysis of society, which allows its adherents to trace out the rough outline of how events are likely to develop. The Marxists around Militant, basing themselves on Trotsky’s analysis, fully anticipated the revolt of the peoples of Eastern Europe which unfolded in late 1989. The perspective raised in the summer of 1989 in the Militant International Review was that: “East Germany could very well be the first to trigger upheavals throughout the Stalinist states.” (7)

Contrast this with one of the most perceptive writers, John Lloyd, in the Financial Times:

East Germany has no mass movement on the horizon… Czechoslovakia’s leadership cannot allow the questioning of the source of its legitimacy in the Soviet invasion of 1968… Hungary faces dissidents, but not yet a proletariat aroused. Bulgaria will introduce Soviet-style reforms, without yet Soviet-style chaos or fledgling democracy. Romania and Albania are clamped in iron. (8)

This was not written at the beginning of the 1980s but three months before the end of 1989! The revolt of the peoples of these states was inevitable. What was difficult to foretell was the exact form it would take and what its likely outcome would be.

At an international conference in the autumn of 1989, Militant also drew attention to the gathering war clouds in the Middle East. The Iraqi dictator, Saddam Hussain, had built up a powerful military regime but was also faced with colossal internal contradictions. This would not be the first time in history that a military dictatorship would seek an outlet externally in war. The most likely flashpoint for this, we estimated, was probably a military clash with Israel, the client state of imperialism. Instead of this, Saddam turned his attention towards Kuwait. Nevertheless we anticipated the broad outline of likely developments.

Perspectives for capitalism

The great majority of economic soothsayers looked forward to a continuation of the boom as the world entered 1990. Yet, despite “Reaganomics” and the superficial froth of Thatcherism, capitalism, as Marx had demonstrated more than a hundred years previously, was incapable of overcoming its inherent contradictions. The fundamental reason why crisis is inevitable is that the working class can never buy back the full product of their labour because their wages represent only a proportion of what they produce. That part of the product which goes to cover the workers’ own subsistence is called by Marx “the necessary product”. What the worker produces over and above this is the “surplus product”.

Capitalism maintains its momentum by ploughing back this surplus into production, into factories, raw materials, etc. But the capitalists’ profits come from the unpaid labour of the working class. When profits increase and are invested in new capital equipment, at a certain stage this must be used to produce more consumer goods. Yet workers once again do not receive enough wages to buy them back. This results in “overproduction”, that is recession or slump, which in the modern epoch is expressed through “excess capacity”.

One of the expressions of the parasitism of world capitalism is that “excess capacity” was a feature of all the advanced industrial countries even during the boom of the 1980s. Completely blind to the workings of their system the economic “experts” of the ruling class, such as the Financial Times, were almost euphoric at the beginning of the new decade: “The death of communism means that the whole of Europe will become the world’s powerhouse with a united Germany as its engine.”

Militant on the contrary pointed out:

There is no possibility of a ‘Marshall Plan’ for Eastern Europe which could help to sustain world capitalism for another two or three decades… more serious capitalist economists already look towards a recession. Most pray it will be a ‘soft landing’. But it cannot be excluded that a ‘hard landing’ – with serious effects on living standards and conditions for the mass of the working class – could develop early in this decade. It is unlikely we will immediately see a drastic crisis along the lines of 1929-33, more likely a slowing down in the rate of growth or a small recession. (9)

Thus it was Militant, proponents of “outdated” Marxism, which was able to correctly foresee the trends in world capitalism. Precise timing in predicting economic processes is difficult, if not impossible, but clearly at the beginning of 1990 we foresaw a world economic recession. It came much earlier than either we, or the few bourgeois economists who anticipated it, expected.

What was the effect of recent tumultuous events on the working class? we answered:

The effect of the events of Eastern Europe on the outlook and consciousness of the working class is two-sided. The illusions in capitalism of the Eastern European workers, and to some extent those in the USSR (could result)… in a return to capitalism in Poland and Hungary. In East Germany… there is now widespread support for ‘reunification’, even if this means a return to capitalism. (10)

But, we argued, the other side of this process was the example it would give to working people throughout the world of what mass movements are capable of. At the Berlin Wall at the turn of the year a banner was held aloft: “Listen world, the people are coming.” We commented:

The idea will be fermenting in the minds of workers of the West – if they, the workers of Prague, Bucharest and Berlin could bring down the tyrants there, perhaps we can topple our government of the rich here. (11)

We did not have to go very far into the new year to see this prognosis vindicated in Britain. The poll tax was the trigger which would alter the political landscape of Britain and establish a benchmark by which all future forms of struggle will be measured. Very few people outside outside our ranks held this opinion at the beginning of 1990.