17 March 2020

2. Capitalism in Britain

Due to a combination of social, political, economic and other factors, Britain was the first country to be dominated by a real, fully mature, capitalism.

By the first half of the 19th century the mass of the population had already been expropriated from the land. Denied any possibility of an independent existence, to survive, they had to sell the only commodity they possessed – the ability to work. Herded into factories, mines and mills, they were subjected to ruthless exploitation. Aristocratic and mercantile wealth gained from piracy, colonial plunder and the trade in black slaves became capital used to suck the life energy from wage workers. Vast fortunes were amassed.

British capital was able to secure a hitherto unprecedented position in the world market. Britain truly was the workshop of the world. Inevitably, Britain was chased by rivals – most notably Germany and the United States. Britain was no longer the undisputed world hegemon. Still the most powerful capitalist state, but visibly suffering relative decline.

Increasingly Britain experienced difficulties in accumulating capital. To overcome that and delay working class revolution the ruling classes turned to the restriction of competition and a greatly expanded overseas empire. As part of this the export of commodities was eclipsed in importance by the export of capital itself. Finance capital came to dominance.

Britain carved out a gigantic empire that at its peak covered one-quarter of the earth’s land surface and included one-quarter of its population. There was additionally an unofficial empire of subordinate and dependent countries.

The empire was a source of cheap raw materials and army recruits. It was also a safe market that could be administratively closed to rivals. It spawned an overblown bureaucratic-military superstructure, staffed by the aristocratic products of Britain’s public schools. Furthermore the super-, or extra profits gained from robbing the colonies and returns from the export of capital provided the wherewithal needed to ameliorate class antagonisms at home.

Inexorably Britain’s rivals began to experience similar problems and seek out their own expansionist solutions. By the dawn of the 20th century the world was effectively divided. Inter-imperialist contradictions came to a bloody climax. In two devastating world wars tens of millions were butchered in the interests of capital. Barbarism took on capitalist form.

Britain saw off two challenges from Germany in 1914-18 and 1939-45. Despite that Britain lost out to the US. After Europe had exhausted itself, so strong was US imperialism that it had no need for a formal empire and could relatively peacefully go about the redivision of the whole capitalist world. The conditions for the post-World War II long boom were laid.

2.1 Social and political consequences of Britain’s imperialist development

From the second half of the 19th century onwards Britain’s industrial monopoly and then its empire enabled the governing elite to tame the spontaneous working class movement. Being able to bribe directly and indirectly a wide section of the working class, it could keep expectations within the parameters of the existing system. The revolutionary tradition of Chartism gave way to the reformist tradition of narrow trade unionism. Consolidation of a trade union bureaucracy – merchants in wage labour – only served to reinforce retrogression.

The revolutionary, communist, militant trend on occasion posed a threat to the stability of capitalism. Despite that, throughout the 20th century Labourism and the Labour Party dominated the workers’ movement. Labourism has often deployed socialistic rhetoric. It is, however, a thoroughly reactionary, pro-capitalist ideology. In war and peace, in government and opposition, the Labour leadership has loyally served the interests of British imperialism. What reform legislation it introduced was designed to dampen, not fire, the class struggle.

Britain managed decolonisation in the midst of an unprecedented boom. There was no crisis of empire. It was moreover able to achieve high rates of economic growth and put in place a social democratic settlement. In a negative and perverted way capitalism anticipated and carried out some of the measures of socialism – cheap housing allocated according to a points system, healthcare based on need, free comprehensive education, an ethos of equality, etc.

Because it was closely aligned to the new US hegemon, British capitalism was able to maintain its parasitic relationship with the rest of the world. Banking, insurance and the stock market were of far greater size and importance in Britain than in comparable countries. Integration into Europe was, however, undertaken from a position of weakness, not strength. Britain could not dominate Europe economically or politically. But it could act as a US Trojan horse to prevent deeper European unity.

When the post-World War II boom came to an end, Britain no longer enjoyed the option it had in the 1930s of cushioning itself through the system of empire preference. British capitalism had to renew the class struggle at home. A whole swathe of Britain’s industrial base was sacrificed so as to undermine trade union power.

To enforce the rollback of the social democratic settlement all manner of authoritarian measures were enacted – laws against trade union activity, laws limiting free speech, laws curbing demonstrations. Reversal of the social democratic settlement proves yet again that reforms workers gain under capitalism are liable to be lost, given new conditions.

Next section ->

<- Return to menu