Contradictions
But not only has the British economy not revived, it has fallen even further behind its main rivals. One reason is that the contradiction between devaluing and sustaining capital values has been particularly sharp in Britain.
Savage bouts of deflation in the early 1980s and now have devalued much of industrial capital, yet the wild debt creation of the mid-'80s boom' inflated the Central to the failure has been the lack of attention to the socialisation of production which is an essential part of The most successful capitalist economies have had a high de gree or cooraination between tims, or ganised by the state in Japan and by the banks in Germany.
The state supports production and tres to secure an appropriate labour force for capital. This socialisation is not simply opposed to free markets: it helps make marl kets work.
Socialisation of production has been neglected in Britain because of the traditions of capital - its lack of attention to the domestic economy, its individualism and belief in free markets.
so brush austenty nas placed par ing of state industrial intervention, on privatisation, on imposing market discipline on firms and workers and freeing This has successfully devalued both capital and labour. but it nas naa severe penalties for capitalist profitability.
Innovativesectors of industry and ser vices have lacked support and coordination. Meanwhile, government policy has feather-bedded low-risk activities like property development and the privatised utilities.
It has encouraged low productivity, cost-cutting production which creates little surplus value. Neglect of infrastructure like transport, training and housing have damaged the supply of labour power, and resulted in skille and professional workers being able to increase their wages relatively fast in the So even the Tories' cost-cutting hasn't worked. You can't just proclaim free markets: you have to ensure the production which creates them.
Lacking an industrial strategy which could direct their spending, the Tories have been susceptible to interest group and farmers, softness towards cartels, and continuation of the mortgage tax relief are irrational from the point of view of capital as a whole.
The Tories have failed to develop any active collaboration between capital and labour, as in Germany, which would help socialisation to be planned within the workplace and outside.
The 'get rich quick' attitude encouraged by the "Tories - the mideighties consumer boom, bingo, the maintenance of dividend pay ments by British companies during the present recession - cuts across for ter strategy and sacrifice for domestic producaon.
Balancing capital mobility with capital. They are dependent on each other, but also opposed.
But this contradiction has always had especially negative results in Britain. British traditions have caused a neglect of socialisation: austerity governments since 1975 have deepened, rather than corrected, this bias.
No answers British capital is still inclined to look overseas for its solutions. But this provides no answers, even for the most internationalised sections of capital.
A weak domestic economy produces a weak pound. British bank shares performed worse in the 1980s than John Major represents a very tentative recognition by the bourgeoisie of these problems, now rubbed in by the recession. The appointment of Heseltine as Industry Minister heralds an attempt to think about industrial strategy.
But the Tories are not about to embark on a strong modernising project. Capiclass has been sufficiently defeated. sacrifices from most sections of capital Both capital and the working class would have to be convinced that long term sacrifices were acceptable in order to achieve an even longer term benefit.
But British culture is compretery averse to this approach. And world stagses particularly averse to sacrifice.
The modernisation hoped for by Tory wets and social democrats is blocked by powerful class forces - or the fear of unleashing them.
Strategically, British capital is paralysed No. 24 June 27, 1992
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