Cooking the Books: You Can’t Buck the Market But You Can Abolish It

‘THERE IS NO ALTERNATIVE TO CAPITALISM, COMRADE’, wrote Tory Lord Finkelstein addressing John McDonnell in the Times (14 October). A few weeks later the same paper carried a news item on an opinion poll conducted for a Tory think-tank, the Legatum Institute, headed ‘VERDICT ON CAPITALISM: UNFAIR AND CORRUPT’ (3rd November).

The two headlines are probably an accurate reflection of current popular opinion – that there is no alternative to capitalism even though it’s not up to much. McDonnell, though, probably does see an alternative to capitalism but a long way off, in the meantime wanting to reform capitalism so it’s not so harsh on workers, maybe in fact not so ‘unfair’ or ‘corrupt’.

But it was a statement by the Corbynista Labour MP Diane Abbott that Labour ‘have always been a Keynesian party’ that particularly annoyed Finkelstein.

Since it wasn’t until the 1930s that Keynes formulated his famous theory of how (supposedly) to control capitalism while the Labour Party had been founded thirty years previously, the ‘always’ in Abbott’s statement is wrong (though Keynes did in fact provide an academically respectable justification for the spending policies the Labour Party had always advocated).

But this wasn’t Finkelstein’s point:

‘Labour was founded as a socialist party, not a Keynesian one. Keynes developed his ideas about borrowing as a way of saving capitalism from itself. Socialists rejected the very idea. They wanted to replace capitalism altogether, not patch it up with macro-economic policy.’

Finkelstein does give here a quite good description of the socialist attitude to Keynes. The trouble is that it does not apply to the Labour Party. It was not founded as a socialist party, but merely as a trade union pressure group in parliament and did not even claim to be socialist until 1918 when a new constitution containing Clause Four was adopted.

Quite apart from this clause committing the Labour Party to nationalisation, or state capitalism, rather than socialism, this made no difference to its policy which could accurately be described as being to ‘patch up’ capitalism.

Later in his article Finkelstein admitted that in the 1930s ‘a hybrid emerged of planning, partial public ownership and Keynesianism’ as Labour policy. This in fact remained Labour’s ideology until the 1990s when Tony Blair persuaded the party to drop it as the price of getting back into office (always the leaders’ top priority). So, to that extent, Abbott was right and Finkelstein had conceded it. What Corbyn and McDonnell represent is not a return to Labour’s never-existing socialist origins, but merely to the hybrid described above. When tried, as under Wilson and Callaghan in the 1960s and 70s, it didn’t work and, here, Finkelstein scored a point in the subtitle of his article: ‘John McDonnell has ignored the lesson the late Lord Howe taught the Labour Party forty years ago – you can’t buck the market.’ That’s right, you can’t buck the market, at least not for long. In the end the economic forces of capitalism dictate what governments can and must do – put profits first – not governments controlling capitalism.

But ‘you can’t buck the market’ doesn’t mean that there is no alternative to capitalism. It means that the alternative has to involve the disappearance of ‘the  market’ and the replacement of production for sale on a market with a view to profit by production solely and directly to meet people’s needs, on the basis of the common ownership and democratic control of the means of production.