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From Labor Action, Vol. 5 No. 6, 10 February 1941, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
“The outstanding lesson revealed by the evolution of Britain’s war economy to date is that any attempt to achieve a compromise solution between a free economy and total ‘Wehrwirtschaft’ (war economy), particularly when faced by an enemy who has long since made the full transformation and is master of its technique, means not only skirting the very edge of disaster, but also foregoing the basic advantages of the old system without reaping the essential benefits of the new.
“This does not mean that there must be a slavish imitation of German practices, although much of what Britain has done has been necessarily in conformity with the same pattern, and even more of Marshal Goering’s machinery, with suitable minor alterations, could have been copied to advantage in the past 13 months.
“Thus this island must try, at least, to operate a total war economy ...”
So begins a 100-page confidential report by Joseph P. Kennedy, until lately, U.S. Ambassador to England, to President Roosevelt. The date – according to the Stalinoid newsletter, In Fact, which presents excerpts from the document in its January 13 issue – is October 10, 1940. These paragraphs gibe with the conclusions arrived at so far in this series:
The problem of the day facing the Tory-Labor government in England, therefore, is how to advance more rapidly towards totalitarian controls, towards what Kennedy calls “long term planning forced by State fiat to maximize this country’s industrial effort in accord with the principle of totalitarian Wehrwirtschaft”. This is now on the order of the day, and it is Bevin, most powerful figure in the Labor bureaucracy, whose job it is to find a solution. In the last few weeks, he has already embarked on the road, with the steps to conscript labor.
The Kennedy memorandum indicates the approach of this new turn:
“There is undoubtedly a wide and growing opinion that the labor market has still too much liberty to go its own way and that the time has come lo bring labor under further compulsion ... According to usually reliable sources, Mr. Bevin has felt that the workers were entitled to a 4 or 6 months period to be free to do what they wished with their new or extra war earnings. The time is now shortly approaching, however, when the difficult and unpalatable job of the Churchill-Labor government must be to tell the workers that there is no way of avoiding serious inflation except through the wage earners being prepared to cut expenditures and to consume less. With open wage controls ‘political poison’, this means in practice the adoption of some sort of direct levy on virtually all incomes or some form of compulsory deferred savings ... or a very much wider extension of rationing and supply prohibitions; possibly a combination of all of these methods.”
Recent events seem to bear out this analysis. On December 1, the government ordered the wholesale supply of a wide range of consumer goods reduced by 50%, and also put into effect drastic reductions in meat and milk rations, which were extended even further six weeks later. And on January 6 Churchill announced a new “Big Four brain trust” to be given complete control of production: the Tories Beaverbrook and Duncan, and the Laborites Bevin and Alexander. Bevin, continuing as Labor Minister, was also made top boss of this supreme production authority. There have been complaints in the Labor press that this new committee is armed with insufficient powers over private business, that it will be able to coordinate and control production little better than the previous inadequate machinery has been.
But the point of the reshuffle seems to be not the better control of business – the Tories are in firmer political control of the government today than at any time since last May – but rather of labor. It looks as though Bevin were being put into a position where he can, at last, really crack down on labor. His job will not be an easy one. As we have seen, the British working class is still strong. Yet the brute pressure of war economics under capitalism can no longer be safely resisted: the masses must be put on short rations. How that Bevin is making the attempt, we may expect a dramatic intensification of class struggle in England.
The Kennedy Memorandum exaggerates the “now or extra war earnings” the British workers have enjoyed up to now. Bevin & Co. have already done a good job in reducing working-class living standards – though, as Kennedy correctly emphasizes, nothing compared to the blitzkrieg they are now preparing. It is true that, as the liberal weeklies like to point out. over one hundred million pounds have been added to British wages since the war began, and it is also true that some of the bigger and stronger unions have been able to force wages to keep within sight of living costs. But the overall picture is different: according to British Labor Research, wages have gone up 10% since the war began, while the cost of living has risen at least 23%. (This seems to be a Conservative estimate; Commerce Reports for January 11 last states that food prices have gone up no less than 58% since the war began.)
Nor is this all. The Tories have been careful to keep in their hands the financial conduct of the war, which means that the drawing up of the war budgets – which determine which class shall bear what part of the burden – was passed from the hands of the Tory. Simon, to the Tory, Wood. And Wood, protected as he is by governmental colleagues from the Labor Party, has piled taxes on the workers and the “little man” as Simon never dared to do. (One of the obvious uses of the Labor section of the present government is to get the masses to swallow the economic privations the war increasingly imposes on them.) It is true that income taxes in the high brackets now go up to 85% and that the 100% excess profits tax has driven net earnings of 337 big British companies down 21% from the last peace year (National City Bank Bulletin, Dec. 1940). And Chancellor of the Exchequer, Wood may be granted the point he made in presenting the third war budget last July: “If he confiscated every salary in the country over $8,000 a year, he said all he would get would be $280,000,000 or enough to keep the war going not quite nine days. That, he said, is his position, so it is mainly the little man who is on the spot tonight.” (Though nine days is something ...)
But there are more ways than one to skin a cat – if you want to skin it, that is. Hugh Dalton, foremost Labor Party economist, indicated one when last winter he declared baldly in parliament that the “very rich” should be taxed two pounds for every pound of their income – the extra pound lo be collected by a capital levy. “Six per cent of the population of this country.” he said then, “hold 80% of the property, and less than 2% hold 40% of the property. This is an injustice which our soldiers, sailors and airmen certainly are not fighting to maintain.” But that was before Mr. Dalton entered the government himself as Minister of Economic Warfare. Since that happy date, nothing more has been heard from him or his Labor colleagues as to a capital levy.
Nor has anything been heard from them as to the sales tax on consumers’ goods which Chancellor Wood put through last fall (also something that the Chamberlain government had never dared to do). The N.Y. Times of July 8 noted that at a meeting of the National Council of Labor, the rank and file overruled Greenwood and Morrison and insisted that the Council go on record against a sales tax. When the Churchill-Labor cabinet nevertheless tried to drive the tax through parliament, strong opposition from Labor Party members killed it – temporarily. Two months later the tax went into effect – one more indication, by the way, of the in creasing specific weight of the Tories in the present government.
The total revenue expected from the new sales tax is some $400,000,000 a year. This will run the war for less than two. weeks, at present rates of expenditure. But the tax is important less for revenue than as a means of cutting down on consumption (and thus production) of consumers’ goods. The most direct method is rationing or outright prohibition, and this is being resorted to more and. more. In a society like that of England today, this means – no matter how Bevin & Co. try to smooth over matters – a sharpening of class antagonisms. Consider, for example, the meat situation.
A few weeks’ ago the Tory Minister of Food, Lord Woolton, announced a cut in the meat ration from 47¢ worth of meat per person per week to 30¢, and two days later a further cut to 23¢ (which at war price’s means just, one pound of beef or two of mutton). “There are excellent reasons for this decision,” said Lord Woolton reassuringly, “among them the diversion of shipping to Libya. Would you rather have a little less meat ... or would you rather have Bardia?” (Another slice of Bardia, please ...) But there was more to it than Bardia. The N.Y. Times of Jan. 11 reported: “The London Trades Council went on record today protesting against the ‘scandal’ in the muddled meat supplies of Britain. They were concerned specifically with price reduction and equal distribution through the removal from power of those linked with combines and the food trust.” For Lord Woolton, as is the general practice in the Tory-Labor regime, has set up “to keep food prices at a reasonable level” a committee composed of “food manufacturers, wholesalers and retailers.”
Nor was this all. Rationing hit the working class much harder – to say the least – than it did the wealthy. The latter could buy unrationed luxury foods like chicken (at 65¢ a pound). Or they could gorge themselves without limit at expensive restaurants. The London Daily Mirror, popular tabloid, sent out a reporter with a well-filled wallet. Excerpts from his story:
Within five days I have eaten at least seven times my weekly meat ration, five times my butter ration ... Not content with this debauch, I have swallowed saddle of hare in wine sauce, lobster Thermidor, caviar, Hungarian pork goulash, quails in aspic and goose livers. In addition I have eaten two dozen oysters and a considerable quantity of fish, ranging from smoked salmon via tuna, sardines and anchovies to an enormous Dover sole. This mountain of food was obtained without the loss of a single food coupon ... I have watched the great as they dine – Morrison, Beaverbrook, Duff Cooper and Eden among them.
After this exposé and the London Trade Council protest, Lord Woolton promised to cut down food supplies to restaurants and to forbid the serving of more than one “basic dish” (fish, meat, poultry, cheese, eggs) at any single meal. But restaurant diners still don’t have to present food coupons (as housewives buying at stores do). It is an interesting footnote on this “war for democracy” that in German restaurants food has been strictly rationed since the beginning of the war.
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