Peculiarities of the British Economy, Lawrence & Wishart, £7.50 THERE IS a common view on the left about the causes of Britain's decline. The 'origins of the present crisis' (to use Perry Anderson's phrase) lie in the class compromise of the seventeenth century, in the fusion of landed aristocracy and the proto-bourgeoisie. This alliance set the scene for some of Britain's greatest triumphs -such as the Empire - but in the end, the weight of the dead came to impede the pro. gress of the living. An archaic superstructure clogged the cogs and wheels of the productive base and decline set in. The murky haze of English public life seeped into the lungs of the in. fant labour movement, which, unable to support itself and born before its ideology (Marx. ism), could only aspire to an adulthood of incor. poration into the status quo and developed a congenital inability to exercise hegemony. As time goes by the ruling class (abetted by the state) develop an addiction to financial speculation and international adventure while back at t' mill the rusting machinery turns more and more slowly and the proles 'phone in sick.
This picture has to go, say Fine and Harris. But what is to replace it? Rejecting any fatalistic picture of Britain's economic decline, they insist that there have been a number of key moments in recent British history - such as 1945 — when the state, the City and industrial capital could have intervened to reconstruct British capitalism on a rational basis. The reasons for this failure seem to have to do with the relations between these three elements, on the one hand, and their relation to the British labour movement, on the other.
The City has not 'starved idustry of funds' in any straightforward sense, rather the need for International, No. 3, March/April 1986
the City to compete as an international financal centre has led to it (through the Bank •if England) to insist on policies - such as the con vertibilty of sterling and the freedom to bor row and re-lend foreign currencies at will that have blocked the development of any coherent industrial policy by the state. These requirements of the City have remained stable while the focus of its attentions has shifted sharply from the Sterling Area to a more broadly international perspective.
The banks have lent to industry, although in dustry has often preferred to be self-financing. but the form of lending has been the overdraft secured by charges against a company's assets This has had the consequences that banks have chosen to play almost no role in the development of long-term strategic planning of in dustrial companies, in the knowledge that they can, if the worst came to the worst, simply trig ger bankruptcy and get their money back. In other West European countries the banks have played a quite different role. Through their len. ding to industry they have become forums for the development of a long-term industrial perspective — in Britain the City has refused to play such a role and has made it impossible for the state to do so.
The capacity of government to develop an industrial strategy has been further undermin ed, according to Fine and Harris, by the weight of both British and foreign multinational cor porations in the economy. The power of these corporations and their ability to shift produr tion from one country to another is identtied as a major source of government weakne.: Far from attempting any sort of fightbank British governments have tencied to adopt the multinationals own view of the world and have pursued polices that aid the internationalisaten of capital. The Alternative Econom ‹ Strategy is supposed to be the remedy for all this.
Much of the book is devoted the the relation
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hip bowiren the state and industry in specific ectors. Cold and nuclear power are singled at tot special attention here. The central argumen! > that the labour movement has repretendly fated li use its strengths to impose cherent mistrai strategy on the state and on specifi entor,. Groups of workers in par!: giar industric such as the miners with Plan freudi. have proved too isolated to do this, it is a last for the labour movement as a whole, with a writed trade union movement giving a Labour government the will to use the capitalet state machine.
So what, if anything, is wrong with all this? Tine and Harris seem to be looking for some outside agency state, City or labour movement i. impose a coherent and rational strategy Britain's myopic industrial ispitaliots. it seems to me that they hanker after some corporatist solution, perhaps on the mode of Austrian tripartism, although such an imputation would no doubt upset the authors. All this trom the supposedly 'hard left Morning sor wing et the Communist Party. The Alterrative fri:mic Strategy as envisaged by Fine ari Hare seems to have all the disadvantages assoriated with a full biooded socialist policy aki none e! the henefits. If the labour movement mere ever in a position to impose a 'ratonal dividist solution in the form of a coherent industrial strategy. its very strength would already have panicked the capitalists (of all sorts! into cabotage and flight.
A!!! !!. a no! to deny that there is much !!at :luate in We book! did get the feeling toughe is far irom being antithetical to the Arden Nan thesis, fine and Harris are (in the seeds of 5 Mill climbing the hill from the cher sue. it, i thick, possible to take on board modul then analysis while retaining an undersiandag of the cuitoral and political determindits en Britain's economic decline.
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Socialist Register JULIAN ATKINSON Editors: Miliband, Saville, Liebman and Panitch Socialist Register 1985/6: Social Democracy and After. Merlin Press £6.50. THIS DOUBLE issue of the