Ordinary Britons have been victims of a fraud that began in the 1980s. Started before many of today’s voters were even born.
Thanks to tight control of the popular media by the very rich, a reversion to 19th century capitalism was sold as the only option.
Liberal critics speak vaguely of a Western failure after the Golden Quarter-Century, 1945 to 1970. But most stop short of admitting that the era’s grand success happened because most governments accepted socialist economics. Often did this even while being conservative or even reactionary on other matters: Japan is one very clear example.[1]
It was called the Mixed Economy. Such systems tolerated private ownership and inherited wealth: but at the time many denied that it was a variety of capitalism. They saw it as something radically new. But separate from social radicalism: some countries found it compatible with a hereditary monarchy, as with Scandinavia. And it was broadly a success.
Somehow the notion dropped out of political thinking in Britain. And we still suffer for the lack of clear understanding.
The Mixed Economy could be seen as the proper culmination of human society, or as a step towards something more socialist. These views were mostly compatible within the Labour Party, up until Blair. Who did briefly mention alternative ‘stakeholder’ ideas, but then abandoned this for a surrender to Thatcherite fantasies.
But for why this happened, we need to look back well before Blair began to matter. And recognise that Britain has been very much pulled along behind the USA, which has all along been the choice of the Labour Party mainstream.
But yes, I do want to limit freedom!
If you try to impose your own idea of a better way of life on other people, they are unlikely to see it as Liberation.
You see it as ‘setting them free’. They see it as imposing a different way of life on them. A violation of their freedom.
This undermined the USA’s New Deal in the 1970s. It had originally succeeded as a coalition of labour unions, blue-collar workers, racial and religious minorities (especially Jews, Catholics, and African Americans), liberal white Southerners, and intellectuals.[2] That’s how the Wiki puts it, and they say too little about how far its fall was caused by losing the Southern Democrats – upholders of White Racism who had dominated the former Confederate states ever since the Republicans in the north had abandoned the use of armed force to uphold the voting rights of African-Americans in those states.
In the 1960s and 1970s, the US Democrats made up for what the USA as a whole had failed to do properly in the 1860s and 1870s.
The failed effort to uphold African-American rights back then was known as Reconstruction. I’ve recently read a nice account of it in a biography of General James Longstreet.[3] A slave-owner who fought to the bitter end, he also accepted the new idea of African-Americans as equal citizens. He would let talented individuals command men classed as part of the White Race. And for as long as African-American men could vote, this could work democratically – but only with the Federal Army to enforce it. Ex-Confederate terrorism wasn’t just the notorious Klu Kluk Klan: Longstreet was a leader of Reconstruction in Louisianna, where the main terrorism was from the much more open White League.[4]
The USA’s 1870s Reconstruction failed, because liberals who were comfortably far away from it felt that using Federal armed authority was too much like tyranny. And were also persuaded that the Reconstruction governments were discreditably corrupt, though it seems they were no more corrupt than those before or after. Corruption has always been a nice slogan for the rich and the right-wing to persuade ordinary people to vote out governments that look after ordinary people rather than the rich.
Nothing like violent US racism happened in Britain, of course – but perhaps only because there were few non-whites in Britain until the 1950s. Britons overseas mostly got absorbed into the local White Racist culture, with dedicated Communists the main hold-out. And anti-Communist hero George Orwell was actually lukewarm. He several times sneered at Mahatma Gandhi, and his work for the BBC was a special service dedicated to winning over the population of India to the war effort. Gandhi and other Congress Party leaders were in jail, because they had validly rejected a demand to support the war in return for a promise they might get independence after the war, but not if the British government decided it would not be good for them.
Orwell’s Burmese Days is a good description of colonial racism. But every single Burmese individual who is depicted in any detail is unworthy of respect. The one decent non-white is from India, and a loyalist for the British Empire.
While overt racism has been kept down in Britain, in part due to a lot of work and some risk-taking by left-wingers, it lurks beneath the surface. This applied to the constituency I live in, Coventry North West.[5] Solidly Labour since 1974, it was very nearly lost in 2019, with a majority of just 208. This was probably caused by replacing a white male with Taiwo Owatemi. The lady was born in Britain, and worked as a pharmacist at an NHS cancer unit, but clearly a lot of the regular Labour voters found her unacceptable.
Freedom as a Finite Resource
Liberalism has always been based on state authority. Loud protests about limits on liberty tend to be very specific, aimed at keeping the state away from areas where the elite don’t want to be regulated.
Liberals and the entire centre-right falsify history, not admitting that many of our current freedoms are things that previous generations of liberals or centre-rightists either neglected or actively opposed.
Or said they favoured, but cited LIBERTY as a reason not to use methods that might actually enforce something they said they favoured.
I call it Dogmatic Individualism. We are told that individual choices must always be respected. And while some individuals do honestly live by those principles, everyone who actually has to run anything or be responsible for anything will dodge round the dogma. Pretend that what they do is something other than an imposition on someone else of your idea of how they should be living.
Frank Sinatra could have sung it:
“I did it my way, you’ll do it my way.”
Liberalism is not in fact a creed of liberty. It is a creed that gives the rich the freedom to ignore their social responsibilities. And does endorse the idea of talented individuals rising from all sorts of backgrounds, which was mostly rejected by older human societies. Something that Western colonialism did genuinely impose on the wider world: it is foolish to pretend that it was just about economic exploitation and a desire for power. The real history is of a mix of many different motivations.
Liberalism favours individual fights rather than a state that takes responsibility. Marx was quite right to see it as the rise of people who had grown rich from commerce. And right to see that it abandoned the notions of overall social responsibility, which the traditional land-owning elite had mostly respected.
Marx was wrong not to see that there was real merit in insistence on individual liberties. What Lenin and Stalin did on the basis of his writings can be justified in terms of necessary limits on liberty. The methods that everyone given the task of governing actually apply, whatever they claim to be doing.
And I’m confident that we’d be living in a much worse world, had Lenin and Stalin not acted so.
Liberal capitalism maimed itself with the First World War. Both Leninism and Fascism were reactions to this failure of what had been celebrated as Christian Civilisation. I find it interesting that both the Nazi swastika and the Soviet hammer-and-sickle have an odd similarity to the traditional Christian cross. Two rivals replacement symbols for possible New Civilisations.
Liberal capitalist failure was confirmed by the Great Slump of the 1930s. The US New Deal borrowed a great deal from Fascist Italy, which pioneered the Mixed Economy but had needed dictatorship to impose it. Roosevelt was able to bring Congress with him, though only because he let industrialists make gigantic profits and tolerated the White Racism of Southern Democrats. And his program also came close to being killed by the US Supreme Court. It was saved only because it became clear that the US might be dragged into a new World War. The elite have always been in favour of massive spending for warfare: they know that their actual power depends on being seen to possess military might.
The Cold War allowed a lot of this spending to continue. And its recent resumption is in my view heavily based on a discovery that the ‘peace dividend’ expected in the 1990s was nonsense. Less state spending damaged the economy, and an attempt to use human space exploration as an alternative was never very popular.
World War Two had been basically a victory for the USA and Soviet Union. France had been conquered, and most of its overseas empire chose to be loyal to a government that supported Hitler as victor. The British Empire was hugely damaged by both the Germans and Japanese: its immediate survival needed the USA. But the USA would probably not have been willing to accept the cost in money or young US lives that would have been needed to conquer Nazi Germany. It is a mostly-forgotten fact that more than half of the losses suffered by the German Army happened on the Eastern Front, where the Soviet Union paid the entire cost in young lives.[6]
Memories of actual history were allowed to fade. The Soviet Union got reclassified as a failure rather than a limited success. Not celebrated as partial success that changed the Western vision of what normal politics was.
The fact that the Soviet Union had the first satellite, the first human in space, and the first woman in space made them celebrated as The Future: or at least a future just as good as the US alternative. This is just as significant as their later failure, which would also have counted for less if their automatic probes to bring back rocks from the moon had done this ahead of the USA landing men there.
Soviet success up until the 1960s made permanent changes in social values, with racial and sexual equality upheld in principle, though imperfectly in practice.[7] With class privilege no longer respectable, though it continues.
There was also a shift in economic values – tax-and-spend was the Western alternative to the Soviet system, which was flourishing until it took a wrong turn in the 1960s and 1970s. And it was this shift in economic doctrine that Reagan and Thatcher were able to reverse. Helped by people who’d been radical youths in the 1960s, and took a different view when they started paying taxes.
People who had flourished with cheap or free education decided that the next generation were not worthy of it.
There were also in Britain an increasing number of people who live in a way that Britons define as middle class. It became more like the USA, where lorry drivers are among those who see themselves as having achieved middle class status. Many more own cars, own their own house, go on foreign holidays etc. Thatcher and followers were popular for a reason: right to buy, credit cards for the many etc.
They didn’t create a nice society. Even the promise of home ownership has failed, with inflated prices excluding today’s young people. But there was a shift, and socialists will not succeed until they recognise it.
Failures in the 1970s
Britain suffers, because we failed to move to a new stage of economic socialism in the 1970s. It seemed possible and even likely at the time. The ideas of Workers Control and Incomes Policy were favoured, with several runs of Incomes Policy actually tried.
So strong were the tides that the Tories under Edward Heath offered a grand partnership to the Trade Unions. He did this after earlier trying something rather like Thatcherism, and finding it defeated by Trade Unions. Defeated in a series of conflicts that most socialists have foolishly allowed to slip out of historic memory. Far more on the left know about the coalminers’ defeat under Arthur Scargill than their earlier run of successes under Joe Gormley.
In the event, Heath lost the 1974 election. The Tories discarded his attempt to work with Organised Labour and elected Thatcher as leader. But something rather similar was implemented in the Republic of Ireland. The main Irish parties are not specifically socialist, but Mixed Economy ideas never lost favour. And it worked: the economy caught up with Britain. Anyone over forty who lived there or visited should remember how Southern Ireland was once visibly poorer, and now is doing very nicely.
How, then, did British socialists managed to snatch a defeat out of the jaws of victory?
The hopes for future socialism were crushed between Labour Right and Far Left. There were some major supporters – Labour leader Barbara Castle and Trade Union leader Jack Jones were notable. Tony Benn was good on Workers Control, but failed to see the merits of Incomes Policy.
It could have happened, but did not. The Labour leadership was never properly won over. Pushed from two different directions, the potential champions of a new stage of socialism were defeated.
The Labour Right – very different from right-wing Labour members in the post-Blair era – wanted to carry on with the comfortable consensus that was formed after 1945. But the Labour Right was weakened by the failed attempt to make a third electable party with the Social Democrats. And with their suicidal decision to merge with the corrupt old Liberal Party, which ended up swallowing them and discarding their Mixed-Economy ideas.
The Hard Left and Far Left had got into the habit of labelling the existing Mixed Economy as capitalist. This was not standard at the time, but they had the greater weight of influential and articulate thinkers. The huge advances made by Moderate Socialists after the Second World War were sneered at, and allowed to slip out of historic memory.
Trotskyism played a significant role. The bald facts are that Trotskyism achieved nothing positive when it set itself up as an alternative to Mainstream Leninism in the 1920s. But it was particularly good at spreading the myth that World Revolution should have been easy, and failed only because of Stalinist wickedness. Various people tried acting on it in the 1960s and 1970s, and got themselves killed without achieving much, though it is worth adding that Che Guevara never repudiated Stalin’s memory.[8] And Mao, continuing Stalin’s mission, was able to inspire a partly-successful movement in Nepal, as well as movements in Peru and South Arabia that at one time looked likely to shape a new future there.
Mao himself said that a successful revolution can never be a nice or a mild process. But far too many socialists believed comfortable untruths about their own past.
The big trouble with lying is that it isn’t true. People forget which bits of the story were falsehoods, or dare not publicise how false they are. Something that the Neo-Liberals also suffer from, having told far more lies than the left.
Between them, the rival left-wing thinkers convinced much of the public that the West’s successful economies were basically capitalist. And were then astonished when part of the electorate was won over by Thatcher blaming the very real ills of the time on deviations from capitalism.
They won the election showing a long queue of unemployed and with the slogan Labour Isn’t Working. And then created vastly more unemployment, but somehow got away with it.
The ‘grand strategy’ of the Hard Left and Far Left was to keep the existing Mixed Economy unhealthy, in the hope that it would collapse and instantly transform into Real Socialism. This was never realistic, and of course it caused great losses for socialism. A loss of belief among more moderate left-wing political parties that economic socialism was the answer. Tony Blair threw out Clause Four, while Bill Clinton moved away from the tax-and-spend policies of the New Deal.
Neo-liberal policies were sold as the key to fast growth after the real crises of the 1970s. But the various promises were never met.
‘Tax cutting’ was always a false promise, if it was even made honestly. Likewise the promise of a smaller state, and the promise of greater personal liberty.
All that happened is that the rich pay less tax, and are less regulated. A privileged 1%, an elite whose starting point is a little above the mere possession of several million dollars. A global network of millions of multi-millionaires. A vast network of adventurous rich people: and actual billionaires are just a mixed bag of individuals with no views particularly different from the rest of the elite.
This has happened at the expense of maybe 90% of the society, with a middling 9% breaking even in the changed world. Both the 90% of ordinary citizens and the ‘next nine’ below the true elite had done well under the Mixed Economy. They should have continued to flourish if the system had been reformed and repaired rather than denounced and attacked.
Adventurous rich people do sometimes have merits and useful achievements. A Mixed Economy assumes that they continue to exist, and may even be favoured. But they could have done just as much good without being given an unfairly enlarged slice of the wealth. Without the unearned extras they have been getting since the 1980s.
A rich minority gained for themselves the amazingly fast growth in wealth that was being delivered at the time by Japan, Italy, West Germany, and to a smaller degree by France. Also the Asian Tigers. And since then by China and the Republic of India, both of which stick with some version of the Mixed Economy. And all of those delivered it to the society as a whole. Only the Neo-Liberals benefited no one except the rich.
Clinton was already a member of the rich minority that did well. And Tony Blair managed to join it, without doing anything improper within the framework of accepted politics. This included huge lecture fees for talks given to rich people who were doing very nicely out of what he and Clinton were doing. All legal, but proper?
Failed Socialism?
What happened was not a general failure of socialism. Non-economic socialism made vast advances in this same period. Such changes fitted more easily with 1960s ideas of personal liberty, combined with traditional socialist commitment to equality and universalism. So we saw vast advances in reducing racism and sexual inequality. Much more tolerance of most forms of non-standard sex, but also a recognition that under-age sex was normally exploitation and usually damaging for the under-age.
None of this non-economic socialism was exclusively socialist. But it would be fair to say that 90% of the work was done by socialists. That 90% of the obstruction or hostility was from the non-socialists: the liberal centre and the much larger and stronger center-right.
This is nowadays covered up or evaded. And it is true that Britain’s Tories chose the first two female Prime Ministers, and the first non-white Prime Minister. But that has a lot to do with there being nowhere much else for offended voters to go. Labour constituencies commonly find a loss of votes when a white male candidate gets succeeded by someone who is female or non-white or both. Quotas have been insisted on, just because this is a known factor. I mentioned a case earlier, and I doubt it is the only one.
The center-right also play up racist and anti-immigrant feelings. It is left to socialists to try to spread harmony and tolerance.
Good feelings are important. But so is cash to push good policies. So are legal rules that can force acceptance. And this is what the hysteric fear of the state and of taxes has helped undermine.
What is the Mixed Economy?
‘Mixed Economy’ has several meanings. But so has socialism. So has capitalism. So has freedom. So has democracy.
Saying Mixed Economy does emphasise the reality and past success of what we are calling for. And reassures those who don’t want a mad dash off into untested ideas.
Nor do we get much coherence when we speak of Socialism versus Capitalism. I once tried putting it thus:
“The New Right view of 20th century history might run as follows:
- “Capitalism, expanding from its original base in Britain, was liberating humanity up until 1914, when it suffered from an inexplicable outbreak of Trench Warfare.
- “It bounced back, but then a fairly normal economic slump at the end of the 1920s caused unjustified panic and capitalism was in the 1930s replaced by capitalism.
- “After World War Two, in excessive admiration for the Soviet Union after it had merely saved the West from Nazism, there were still more drastic change and capitalism was replaced by capitalism.
- “But in the 1980s, Thatcher and Reagan rescued us by replacing capitalism with capitalism. Of course there is still much more that needs to be done to replace capitalism with capitalism in the West.
- “China, while owing all of its successes to capitalism, faces all sorts of disasters unless it urgently replaces capitalism with capitalism.
“They don’t put it like that, obviously. But the label ‘capitalist’ is stuck onto almost all of the various political-economic systems that the West has had in the 20th century. It is also applied to the post-Mao system in China, which has actually been changing continuously and has always been massively dominated by central, regional and local government.
“All successes are credited to capitalism, but at the same time each of the actually-existing systems is condemned for deviating from the ideal capitalism devised by Adam Smith in The Wealth of Nations. And they slide different bits of history from ‘capitalism’ to ‘socialism’ and back again for different parts of the story.” (https://labouraffairsmagazine.com/m-articles-by-topic/m99-topic-menus-from-long-revolution-website/48-economics/replacing-capitalism-by-capitalism-the-new-rights-muddled-ideas/.)
It should be clear that the shift back to 19th century capitalism was a bad idea. A failure, except for a selfish minority of multi-millionaires.
We should insist on a return to Mixed Economy values economically, combined with socialist social policies.
Copyright ©Gwydion M. Williams
[1] https://labouraffairsmagazine.com/problems-magazine-past-issues/the-mixed-economy-won-the-cold-war/
[2] https://en.wikipedia.org/wiki/New_Deal_coalition
[3] Varon, Elizabeth (2023). Longstreet: The Confederate General Who Defied the South.
[4] https://en.wikipedia.org/wiki/White_League
[5] https://en.wikipedia.org/wiki/Coventry_North_West_(UK_Parliament_constituency)
[6] https://www.quora.com/q/mrgwydionmwilliams/Nazi-Germany-Was-Defeated-in-Russia
[7] https://labouraffairsmagazine.com/m-articles-by-topic/m99-topic-menus-from-long-revolution-website/998-from-labour-affairs/the-french-revolution-and-its-unstable-politics/against-globalisation/the-left-redefined-the-normal/
[8] https://labouraffairsmagazine.com/the-soviet-past/why-che-guavara-approved-of-stalin/
Labour Affairs 