Why Fascism? by Edward Conze and Ellen Wilkinson 1935

Chapter II: The Necessity of Planning

Out of the welter of modern politics, out of the economic storms of our period, one idea is crystallising in the minds of most intelligent people – that planning of some kind has become necessary. This is recognised as the main problem of our time. Not less is it being accepted that there must be some adjustment between production and consumption. Mr Ramsay MacDonald was speaking not as the former Socialist, but as the Premier of a preponderantly Conservative government when he said:

If the greater facility of mechanical invention means a greater volume of production, with a substantially less number of employed, we will have to face a very serious problem of permanent unemployment.

The interest in proposals for economic planning has been growing among non-Socialists since about 1931. Previous to that, the word ‘planning’ was hardly recognised in serious politics except as part of Socialist propaganda. The world economic crisis, and the admitted, if partial, success of the Russian Five-Year Plan, began to arouse interest in those who had previously stood firmly for ‘rugged individualism’. One of the earliest reports made to the outside world of the Five-Year Plan was by the personal representative of the Rockefellers. In England the Weekend Review, Sir Josiah Stamp and Sir Basil Blackett got discussion started in circles that were emphatically non-Socialist. Their PEP group began enquiries and research in which they had the help of some very eminent capitalist interests. Sir Oswald Mosley’s early ideas of a Corporate State were first elaborated when he was a member of the Labour Party, but have since won the attention and adhesion of members of the other parties. More important perhaps than any of these, because of the political power behind them, are the efforts of certain sections of the Conservative Party towards a reconstruction of capitalism on centrally-planned lines. The writings and speeches of Mr Harold Macmillan, Sir John de Vere Loder, Mr Robert Boothby and other young Conservative MPs, referred to sarcastically a very few years ago by older Tories as ‘the YMCA’ , are now receiving more respectful attention. Mr Walter Elliot, once one of the group and a Socialist in his youth, is now in a position to put some of their ideas into legislative and administrative practice.

The widespread interest in planning has had its effect on the Labour Party, which has published detailed reports on how, if given the power, it would re-plan on Socialist lines banking, transport, agriculture and the coal industry. The Socialist League, whose chairman will certainly occupy an important ministerial post in any Labour cabinet, has also issued detailed proposals for planned economy. An influential Labour economist, Mrs Barbara Wootton, has produced the case for planning in her book Plan or No Plan. Planning is in the air. Whatever government is in power in England in the immediate future, it is obvious that some proposals for some kind of planning will be put forward, and will, despite opposition from vested interests, be carried into effect.

The immediate political interest therefore is not between planning and no planning. No political party could now face the country and say that they proposed to leave economic forces to work themselves out as best they may. Even Sir Herbert Samuel, High Priest of Free Trade and Laissez-faire, has had to come into the swim and issue a programme in the mode. Planning there will be. The real issue that has to be fought out in England during the second third of the twentieth century is the aim of that planning, and in whose interest are the plans to be made. Will the plans be made by the more far-sighted capitalists, in the interest of the present owners of wealth, but removing those objectionable features of competition which are obviously threatening the whole capitalist system, or will the plans be made in the interest of the working population by their own representatives? In Russia the issue has been decided one way, in Italy the other. In Germany and America, as yet, the issue hangs in the balance. In England, the forces are only forming themselves for the fight.

Reformist Versus Socialist Policy: The Socialists were the first to advocate planning. For years they had been preaching the inevitable breakdown of a competitive system and the necessity for planning. Capitalism after the war has in fact broken down, not altogether through its weaknesses, but partly by its overwhelming success – in being able to produce so many goods. But unrestricted competition did not know what to do with the goods that it produced.

Here was the opportunity for the Socialist parties that had preached planning. And in fact power was either put in their hands, as in Germany, or so near to their grasp that they had only to stretch out their hands as in Italy and Austria to take it. In Britain they were so near power that their opponents quaked to see what a Labour government would do with them in the new situation. In fact, none of these parties in none of these countries showed themselves equal to taking over the situation and putting their ideas into operation. The reason was not that they had not capable men among their leaders. Each of these parties had some of the ablest men in their respective countries in the leadership. But they failed because they had never thought of planning in terms of an immediate situation, where their opponents would be so disorganised that the Socialists would actually have the power to get on with the job, with immense public opinion behind them – if they really showed they were able to do it. Though the Labour Party had not a majority in the House of Commons, they had considerable sentiment behind them. To have put forward concrete plans and resigned on them if need be would have enormously increased their strategic position. Then it was revealed, even to the astonishment of the leaders themselves, that they were not in fact Socialists. That they did not want the existing system to crumble, simply because they had built their whole movement on getting as much out of that system as possible for the manual workers they mainly represented. When the Social-Democratic Party in Leipzig in 1931 said, ‘We are the physicians of ailing capitalism’, they were stating what was really their fundamental connection.

Where the Socialist parties were in a position to start the replacement of capitalism by a planned economy, what they actually did was to take responsibility for the form of capitalism that was then existing, try to get it on its feet again, and make it more efficient, in order to get a bigger share in it for the workers.

That was the policy of the Social-Democratic Party in Germany in 1919 and again in the crisis of 1929. The same desire led them to put their whole weight behind the policy of rationalisation carried through in Germany with particular ruthlessness. The Socialists who had preached the inevitability of capitalist breakdown showed themselves terrified of their words coming true.

In Britain this policy of reform has been the policy of the British trade-union and later the labour movement for the last 50 years. It has had great successes. The measure of that success can only be appreciated by a comparison of the conditions of the working class in 1934 and 1854. But to the bewilderment of the older of the Socialist leaders that policy has become suddenly out-of-date. Not all their personal prestige and undoubted integrity can get the mass of the people interested in it any more.

Not only in Britain, but all over Europe the reformist labour movements have been forced on to the defensive, where they have not actually been broken to pieces.

The Drain From the Colonial Areas: None of the reformist parties would admit that the benefits which they obtained from a grudging capitalism had to be paid for by someone. That they were not paid by the mass of the employers as a whole is proved by the steadily increasing share of the national income which the richer classes enjoy. In England, Belgium and Holland, the classic homes of the reformist labour parties, the improvement in the workers’ standard of life has largely been paid for by the drain from the colonies, and by the tribute, in the form of interest on investments, that has been steadily pouring into these countries from abroad. In postwar Germany and Austria, the better standards of the workers have been paid for largely out of the pockets of the middle classes, as we have shown in detail. The reformist parties in these countries have therefore driven the middle classes into antagonism, and at a critical moment they have taken their revenge.

Subject peoples of the Empire areas cannot take their revenge in the same way, but the lessening of the drain caused by resistance in the colonies and the reduction in profits owing to the fall in prices of colonial products is being reflected in the drive against these higher standards of working-class life, and hence is reducing the amounts that the reformist leaders can get out of capitalism for their members. As this source of supply lessens, there is a tendency for both the organised workers and employers to make up the difference from the middle classes. In Britain the considerably increased allowances which the Labour government made to the unemployed in the period 1929-31, of which about 44 million was raised by direct taxation, incensed the middle and upper classes so that they took their full revenge in 1931. They did not act so drastically as the middle classes of Vienna, who were furious at being taxed to pay for the improved workers’ houses. But their revenge was not the less complete as far as the Labour government was concerned. There was no comparable middle-class opposition to the equivalent process by which the £29,000,000 paid under the De-Rating Act direct to the employers engaged in production was raised mainly by a tax on petrol, probably because the middle classes felt that their ultimate interests were safer in the hands of those who themselves had some property to defend, an illusion that the middle classes in Germany have had good reason to doubt.

The reformist policy has everywhere driven the Socialist and labour parties on to the defensive. Is it possible that in England the Labour Party can become the bulwark against Fascism? To some extent the question is one of age and generations. The generation which now leads the Labour Party and the Trade Unions Congress has gained the main demands of its youth – universal franchise, independent parliamentary party, freedom of the trade union from government interference (though the Trades Dispute Act was a step back, a warning that those who had ‘given’ could also take away), improved social services, the recognition of the right, if not to work, at least to some modicum of maintenance. It is psychologically impossible for this generation to turn away completely from this line of policy and understand, let alone formulate, the new aims which are the centre of interest for the new generation, and regarded by them as a matter of course.

The standard line of argument against these new aims when put forward perhaps crudely by the young men is: ‘You have not been in the movement long enough to know how considerable are the successes our policy has won. Your demands will only endanger the solid foundations we have built. The difficulties are only temporary. We have had bad times before. Stick to the policy which has proven successes to its credit.’ But a movement on the defensive, whose chief aim is to defend its former successes, must be beaten. Only a bold attack towards new goals can give a tactical equality equivalent to that which the Fascists have been able to secure in Italy and Germany.

What the younger generation is beginning to see, and what the older leaders will never admit, is that reformism and Socialism are incompatible, that it is not in fact possible to get Socialism bit by bit, so that there comes a time when capitalism is imperceptibly merged into Socialism. The philosophy of ‘the inevitability of gradualness’ has now been denounced even by its ancient but highly intelligent High Priestess, Mrs Beatrice Webb. A compromise between capitalism and Socialism is impossible. In times of economic peace that incompatibility can be glossed over by using Socialist words to cover non-Socialist actions, an art in which Mr Ramsay MacDonald showed himself an adept, but this adroitness will not stand the acid test of crisis.

If any political policy can ever have been tested fully in action, this reformist policy has been tested to the full in Europe, and there is now nothing so dead in nature as the once imposing Social-Democratic Parties of Italy and Germany. In Britain the answer to this line of reasoning is that the Labour Party has not had a majority in the House of Commons, that its loyalty to its creed can only be judged when it has had the legislative power to put that creed into practice. But is it entirely an accident that each Labour government so far has been a minority government or that the Social-Democrats in Germany could never get that 51 per cent again (after they had given away their real majority in 1918)? Reformism stands for cooperation between capitalists and workers in the economic sphere. It is sane and well-tried trade-union policy to leave the employer to manage his own business and to work with him, provided that in return he gives the workers a reasonable wage and decent conditions of work. One of the present writers is a trade-union official who has carried out the official policy of her union in this sense as a matter of course during her whole official career. But no Socialist party can achieve the power to carry out a Socialist policy with its inevitable corollary, the eviction of the present capitalists from control, without complete freedom from collaboration with the capitalist parties in parliament.

The speeches of even the radical Mr Lloyd George made that very clear on the 1929-31 parliament. But the Labour Party’s power, political and otherwise, is based on the trade unions who are committed to this cooperation with capitalism. The political sphere is always a reflection of the economic sphere. The legislative assembly in any country can only be the register of economic strength outside it. As soon as the Social-Democrats had actually the power in their hands, they were driven inevitably – not as the Communists argue, by sheer wickedness of heart – but by the implications of their own creed, to cooperation with Stinnes and the German industrialists. No party can do differently in parliament from what it is doing in the factories. A reformist without a capitalist is a man with one leg who can only hop.

Not the hard economic reality, but its political expression is veiled in England by the famous British tolerance – which makes it possible for a right and left wing to exist in the same party and work on friendly personal terms. A left-wing non-Communist group has to make itself a very thorough nuisance before it is driven out of the Labour Party. Mr Maxton took himself and his associates out, to the great and sincere regret of Mr Henderson, who remarked to one of the present writers that it was as absurd to imagine that a party could do without a Left wing as that a bird could fly without one. Refugees from Fascism are bewildered by the lack of bitterness in the arguments between the Right-wing leaders of British Labour, and the non-Communist Left.

The Left is not merely allowed, but positively encouraged, to carry on propaganda for pure and undiluted Socialism. As Mr Shepherd, the present chief organiser of the Labour Party, remarked in the course of a speech to the party parliamentary candidates and agents at the Annual Conference of 1933, it was desirable to have front-line speakers who had to watch their words in the statement of policy, but it was equally desirable to have a second line ‘who would preach Socialism’.

But the pleasant personal relations that exist in Britain, not only between different wings of the same parties, but equally naturally among the leadership of the different parties, cannot veil the issue when the time for action comes, when the challenge is actually thrown down. The existence of the Labour Party is in itself a challenge to the capitalist control of industry. In a time of crisis, it may be as unwilling as were its colleagues in Germany to force the challenge to an issue, but the decision may be taken by the other side. The existence of a Fascist party in any strength at all will force that, as it has forced it elsewhere in Europe. If, as responsible Labour leaders have said, ‘Socialism in our time in Britain is sheer romanticism’, then Fascism will, in our lifetime, become a reality.

The issue that reformism avoids is the ownership and control of production. It stands for a ‘share-out’ conception of Socialism – the desire to get as much as possible for the proletariat. Hence the significant part played by various schemes of currency reform which aim only at the better distribution of the capitalist product. But the issue forced by our Machine Age goes deeper than that. It goes down to the basic units of production.

Corporate Industry in Britain: If British industry is to be reconstructed on corporate lines, inevitably reformism will adapt itself to its new course. It will be convinced that this new reconstruction and centralisation of capitalism leads to higher efficiency, and therefore the possibility of higher wages. The reformists will therefore back it, and explain it as a new form of gradual approach to Socialism. The process began with the Mond – Turner conversations in 1928, when Sir Alfred Mond, perhaps the most far-sighted industrialist of his time, began the education of the trade-union leaders in the new policy. The process was interrupted not by any effective opposition from the trade-union side, but because Sir Alfred Mond’s own colleagues were not in sufficient difficulties to feel any necessity to carry the trade-union leaders with them. The economic slump provided them with the big stick of feared unemployment and the employers did not feel that it mattered much what the trade unions thought.

The British trade unions did not fall for rationalisation like the German trade unionists. In fact they fought some bitter strikes against it, and were so far successful that the newer industries were either removed to, or begun in, areas where the older trade unions were not able to enforce the traditional lines of demarcation between one craft and another. In older industries, such as cotton and steel, which could not be moved, rationalisation has either been hindered, or in certain cases, practically abandoned. But the more advanced reformists such as Mr Herbert Morrison and Mr Ernest Bevin, the leader of the transport workers, have moved with the times. They see the necessity of improved organisation. The Labour Party Centrists, of whom Mr Morrison may be cited as one of the most able, see the progressive character of the efforts of capitalist planning. Dr Addison, the Labour Minister of Agriculture, in fact, laid down the lines which, with necessary variations, the Conservative Minister of Agriculture, Mr Elliot, has followed. They want to claim a share in this planning for ‘the community’. Modern trade-union leaders, like Mr Bevin, and the shrewd and able Mr Citrine, would prefer to see the traditional trade unions being built into the new system of reorganised capitalism, having the right to defend the workers, and to claim for them a proportion of the higher profits, rather than any such type of organisation as the British Fascist theoreticians are advocating. This is the orthodox policy of the ‘lesser evil’. It commands the approval of the ordinary sensible man... and it holds good so long as capitalism can maintain its system intact, even going to the extent of Elliot Fascism. But this policy makes no provision for the time when the contradictions of capitalism, this eternal problem of finding consumption to meet its production, brings it to the stage when even the Elliot ‘Fascism’ (like the Brüning ‘Socialism’), can no longer be maintained.

This is the point at which the testing of the labour movement, its ability to take over and run production on the lines which it has laid down in speeches and pamphlets, will come. Certain sections of the labour intelligentsia show a distinct impatience with the perversity of capitalism in not keeping its system going on traditional lines until they had made up their minds and agreed among themselves as to just how they proposed to take it over.

The more responsible men, in control of the labour movement, are very concerned to help those intelligent capitalists, who stand for planning, to crush the stupid and inert capitalists, the type who say, ‘this system will last my lifetime and it’s very good for me while it lasts’. The London Passenger Transport Board is one of the first-fruits of this collaboration between the intelligent capitalists in the Conservative Party and the Labour Party. Curiously enough it has been hailed as an act of socialisation. The Times lectured Mr Morrison for being so indiscreet as to jeopardise his Bill by calling it a Socialist measure. It is in fact an act leading to the greater centralisation of capitalism with state assistance to suppress inconvenient, small or recalcitrant capitalist interests. That the creation of big monopoly trusts is the first essential step towards Socialism has been argued for many years. It is, of course, technically easier to socialise the big trust than scattered small concerns, but it is now seen to be politically much more difficult, since the power of the big capitalistic units to resist Socialist demands is enormous. One has only to think of the fight put up by the Prudential Insurance Company against proposals for the nationalisation of insurance to realise that.

But if the new public utility corporations are seriously put forward as measures of socialisation, then it is really difficult to see the difference between them and any other capitalist monopoly in essentials. Neither the government nor the workers have any influence on management. The capitalist ownership of the means of production has not been seriously affected. Profit must still be made in order to compensate the old owners. The total capital of the owning class is not diminished. It is simply reinvested. The LPTB is no doubt a good and progressive amalgamation bringing greater efficiency – though the disadvantages of a monopoly not supervised by the decisive influence of the consumer are already visible. There is a tendency to use old buses. The attempt to raise fares is likely to be shortly successful. The conditions offered to the workers are not remarkably better. But Mr Morrison, on the other hand, points out that in 90 years’ time, London passenger transport will be in the hands of the community. This is not the Socialism which inspires resistance to the urgent demands of Fascism for ‘action’. At the best these public utility corporations can only lead to state capitalism. In 1908 public influence was extended over the Port of London, but no one would now claim that as a measure tending towards Socialism. At least it would be difficult to persuade the dockers who fought Lord Devonport that this was the case. We are not suggesting that state capitalism may not be an improvement on anarchic capitalism – though it is at least debatable. We are only concerned to emphasise the fact that it does not and cannot do anything towards solving the difficulty which is driving the world to its present misery – the maladjustment of production and consumption.

The Socialism of Mr Morrison presumes a society in which everyone is governed by the best intentions, or, at least, where they are guided by intelligent self-interest. Socialism will be introduced bit by bit. Through parliament, one industry after another will be transformed into public utility corporations, compensating the capitalists, leaving some of their number in control, but unifying them, and making the industry more efficient. High profits will have to be made for many years in order to pay dividends for compensation. In this way it is hoped that the capitalist will be driven out of one sphere of industry after another, until at last Socialism will come.

There are, then, two possibilities. Either this happens with the consent of the capitalists – not, perhaps, all of them – but with a sufficient number of progressive ones agreeing to make possible the coercion of the more reactionary, or it has to be carried through in the teeth of capitalist resistance.

If, with the consent of the capitalist class, this would be true ‘national’ Socialism, a benevolent Corporate State with the more enlightened capitalists in real control, a capitalist-plus-trade-union Fascism instead of a terroristic Hitler – Mosley Fascism. And this is obviously the best result that can be obtained under these suppositions, under the Morrison – Citrine policies. For suppose the second alternative, that the capitalists, fearing their class may be strangled, however gradually, put up a resistance, as it is obvious they would in fact do, even if only the curtailment of some of their present privileges and power was at stake. The very persistence of democratic forms, on which the labour movement so strongly insists, does not allow of any steadiness of this pressure. A Conservative government would follow and undo all of what had been done, of which they did not approve.

But suppose, in spite of the object lessons of 1929 and 1931 to the contrary, that the Conservatives of that day were unable to get back to power on a panic election – suppose that the Labour majority held. Can anyone seriously claim that the resources of those who own and control the means of production are thereby exhausted? In spite of all the traditional respect for parliamentary decisions, it is obvious that the power to sabotage economically a government of which they disapproved remains with them. As has been proved to the hilt even by the moderates, Brüning and Roosevelt, the government is helpless if it does not then confiscate.

The Centrists argue that ‘they will confiscate if there is a clear case of sabotage’. As we have shown elsewhere, at a time of economic instability that is the most difficult thing to prove. It is a further illusion to imagine that the capitalists will only resort to sabotage if their profits have become nil. Obviously they will not wait until there is a real breakdown. If they foresee any danger whatever in the Centrist type of Socialism they will lament the impossibility of continuing in business, and close their works.

Nearly every big industrial town in Britain has had some experience of this in a mild form at times of hard-contested elections, when nothing more was at stake than the influencing of some particular result. Is it to be expected that such would not happen on a far more serious scale, if the capitalist class felt that their existence was at stake? The mass basis, which is the source of the Labour Party’s power, would then be simply cut from under their feet. In what other ways can a reformist policy possibly end?