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Workers Hammer No. 237

Winter 2016-2017

Steelworkers’ jobs on the chopping block

No illusions in capitalist bailouts!

Correction Appended

For much of the past year, the jobs of some 4000 steelworkers in Port Talbot have hung by a thread. These are among the 15,000 steel jobs, along with tens of thousands more in related industries, threatened with destruction when Tata announced in March 2016 that it was planning to liquidate its steel operation in Britain, having already slashed some 2000 jobs in Scunthorpe, Scotland and Port Talbot. Scunthorpe, with 4000 jobs remaining, has been kept open for now as the result of a buyout by a firm newly dubbed British Steel. The German giant ThyssenKrupp is negotiating with Tata over a merger with its European operations. As we go to press, Tata and the steelworkers union bureaucrats have come up with a deal to keep Port Talbot open by extracting sacrifices from the steelworkers that include slashing their pension scheme. The membership is due to vote on it in the new year.

Having complained of losing £1 million a day last March, seven months later the Tata steel operation was reportedly turning a profit. But it is not the concern of the proletariat to ensure the profitability of a particular capitalist, or to ensure the vital interests of capitalist Britain as a whole. Our concern lies in defending the vital interests of the proletariat — in this country and around the world — which is not at all the same thing.

The cuts and threatened closures in steel have provoked a frenzy of China-bashing (see “Chauvinist uproar over Chinese steel”, page 6). On 9 November, Unite joined yet another march in Brussels “to demand action against the dumping of cheap Chinese steel”. Rather than mobilise the workforce in the steel industry in a class-struggle fight to defend jobs, the trade union leaderships are relying on impotent appeals to the Conservative government of Theresa May to protect the British steel industry from foreign — especially Chinese — competition. This strategy of protectionism — which sees British union leaders campaigning for the government to save British steel, while German trade unions demand protection for German steel, etc — is poisonous to working-class consciousness. An example of where this can lead was seen in the reactionary strikes against foreign workers demanding “British jobs for British workers” on construction sites in 2009.

Steel production is international and to survive under capitalism it must be competitive in the world market. Instead of the leaders of European trade unions pleading with their own capitalist governments to take action against China, what is needed is international collaboration of the European steel unions in a co-ordinated struggle to defend jobs. As we wrote last year: “Protectionism provides a cover for rejecting the class struggle in favour of class collaboration and promotes vile anti-foreigner racism. To such wretched appeals to one’s ‘own’ government, Marxists counterpose a class-struggle fight by the trade unions against closures and for jobs for all, with no loss in pay. What’s needed is a perspective of international solidarity and struggle” (“Class war in the Labour Party”, Workers Hammer no 233, Winter 2015-2016). As we stress in our article (page 6) it is the duty of the proletariat to stand for the unconditional military defence of the Chinese deformed workers state.

Following Tata’s announcement last March, Unite union head Len McCluskey declared: “This is the time for the government to say categorically, without hesitation, that these assets will be taken into safe-keeping by the nation because without them our economy will not flourish.” Labour Party leader Jeremy Corbyn, having denounced China, stated that “as a country, we must do whatever it takes to save this strategically vital industry”. Shadow chancellor John McDonnell called for Tata’s steel operation to be nationalised at least until a new buyer was found. The Socialist Workers Party (SWP) chimed in, “Labour’s leaders are right to argue for nationalisation, but it shouldn’t be a temporary phase”, declaring: “Our answer to the steel crisis — nationalise to save jobs, not bosses’ profits” (Socialist Worker, 5 April 2016). According to the SWP, “It [nationalisation] counters the idea that the market should be left to its own devices. And it can point in the direction of a society run in the interests of ordinary people, not for the profits of a rich elite.” This is a recipe for Keynesian economic tinkering seasoned with a dash of populist rhetoric.

Such calls for nationalisations, outside the framework of a programme for the overturn of capitalist property relations, amount to nothing but bailout schemes for capitalist industry. Bailouts for the capitalist profit system are at the core of old Labour’s politics. This perspective is inherently nationalist, identifying the interests of British workers with those of the British steel bosses.

Marxists oppose the privatisation of nationalised industry, which invariably includes attacks on the trade unions while slashing jobs and working conditions. We support the nationalisation of vital services like healthcare, rail and utilities. Socialists will also, in certain situations, call for the expropriation of one or several key branches of industry, while rejecting any compensation to the owners and always linking the demand to the need for the workers to seize power and expropriate the bourgeoisie as a class. This perspective is counterposed to capitalist bailouts, idealised as “common ownership”, that are beloved of Labourite “socialists”. To claim, as does the SWP, that nationalisation carried out by the bourgeois state — whether under Labour or Tories — will in itself save jobs, or, even more, that it can point in the direction of a socialist society, is a travesty taken straight out of the Labour Party’s (now defunct) Clause IV. That clause, promising “common ownership of the means of production, distribution and exchange”, was added to the party’s constitution in 1918 in order to con the many workers who were attracted to the Bolshevik Revolution in Russia.

In response to the threat to steelworkers’ jobs, the International Marxist Tendency (IMT) joined the chorus of those chastising the Labour leaders for having “fallen short of calling for genuine nationalisation”. The IMT’s Socialist Appeal (15 April 2016) argues:

“Instead of asking the government to take on all the risks whilst handing the capitalists all the benefits, Corbyn and the other leaders of the labour movement should be making the argument for nationalisation and democratic workers’ control and management of Britain’s steel industry….

“If such measures were taken and extended to the other major levers of the economy — such as the banks, infrastructure, construction and other major monopolies — then Britain’s steel production could be integrated into a general socialist plan of production to meet the needs of society, whilst also investing in training and technology to provide workers with new skills and lower the hours of the working week.”

What is notable about the IMT’s grand scheme for “a general socialist plan” is that “the government” that is expected to carry it out is a capitalist government (and at this point a Tory government!). Even should Corbyn stand at the head of a left Labour government, this would still be a capitalist government. As Karl Marx noted as far back as the Communist Manifesto in 1848, “The executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie.”

Before the bourgeoisie can be deprived of its property — the commanding heights of the economy, as the IMT likes to call it — it must be deprived of its power in the form of the police, the military and the prison system, ie the essential core of the state, which is committed to enforcing its rule. Only then, when the capitalist state has been smashed on the anvil of social revolution and the working class has created its own state power on the basis of workers councils, can the economy be collectivised. While the IMT can sometimes sound Marxist, it remains deeply loyal to the Labour Party. In the real world, the IMT’s hot air about achieving “socialist production” through bourgeois nationalisations is simply meant to prettify Labour’s actual record. If the last 70 years of British history, and especially of the steel industry, prove nothing else, it is that the old Labour programme of bailing out bankrupt industries is...bankrupt.

Clause IV “socialism” in practice

The growth and decline of the steel industry parallels the rise and decay of British industrial capitalism. Britain was the first industrial power, and also the first capitalist power to show signs of senility. In 1875 Britain produced 40 per cent of the world’s steel; today that figure stands at 0.7 per cent. The US was rapidly to outstrip Britain in the modernity of its plant and equipment, thanks in large part to Scottish-American capitalist Andrew Carnegie, who in the early 1870s imported the Bessemer steelmaking process invented in Britain. By the time of World War I, Britain lagged behind both the US and Germany (as well as Belgium) in per capita steel production. British industrial technique, already out of date by the end of the 19th century, staggered into the 20th scarcely changed since the time of the industrial revolution.

Rather than meet the competition from imperialist rivals by modernising its industry, the British bourgeoisie settled into a comfortable senescence, becoming increasingly reliant on the export of capital and on the dividends from investments, especially those extracted from its colonial empire. Writing in 1916, Bolshevik leader VI Lenin pointed to the parasitic character of the British capitalist class, seen in “the extraordinary growth of a class, or rather, of a stratum of rentiers, i.e., people who live by ‘clipping coupons’” and whose income “is five times greater than the income obtained from the foreign trade of the biggest ‘trading’ country in the world” (Imperialism, the Highest Stage of Capitalism).

The Labour Party of Clement Attlee took over the government benches in 1945 faced with a British capitalism which had been in a state of decline for decades and had emerged from World War II deeply indebted to the US and with its empire in the process of disintegration. Industries vital to the economy, such as the mines and railroads, were bankrupt and falling apart. In its election platform, Let Us Face the Future, Labour pledged to nationalise and reconstruct such industries. This was a commitment to bail out the very capitalists who had driven British industry into the ground.

The Attlee government proceeded to nationalise — by and large with broad acceptance by the capitalist class — the most inefficient and failing industries, which then continued to operate through heavy subsidies extracted from more productive sectors of the economy and, ultimately, from the pockets of the working class through low wages. The end result was the continued impoverishment of the British workers, whose standard of living over the years was to sink to one of the lowest in Western Europe. The Attlee government embodied the mindset described by right-wing historian Correlli Barnett in his scathing critique of how the British bourgeoisie ran an industrial economy into the ground: “If change must come, then let it be so gradual that no one would feel the pain” (The Verdict of Peace [2002]).

Notwithstanding illusory promises that the working people were finally on the road to the supposed Clause IV paradise of “parliamentary socialism”, Labour’s main priority was to repay its massive loans from the US, primarily by enforcing severe austerity and wage restraint on the working class, which was forced to endure continued rationing of foods, and a wage freeze in 1948. At the same time the Labour government sought to maintain the fiction that Britain remained a world power of the first rank. Under Attlee, Britain played the colonial overlord in the bloody partition of India in 1947. At home, investment in modernisation of industry, not to mention spending to improve life for the working class, ranked a distant second behind financing British imperialism’s military aims as a junior partner of the US, primarily in the anti-Soviet NATO alliance founded in 1949. The first victim of Attlee’s multi-billion-pound commitment to the US-led counterrevolutionary war in Korea launched in 1950 was the new National Health Service, which was forced to impose a charge on glasses and dentures in violation of the promise of healthcare free at the point of use.

In the six years of the Attlee governments, little was done to reverse Britain’s industrial decline. Not a single new steel plant was completed; the giant Port Talbot facility did not come on stream until 1952. And even that new mill, two years later, was operating at a level of productivity some 60 per cent of that of Chicago’s Inland steel works in the US. The short-lived nationalisation of iron and steel in 1951 was the last undertaken by the Attlee government. As a result of a massive rearmament programme in the leadup to World War II, the steel industry actually had a handful of relatively modern plants; there was much controversy in the Labour Party over whether it should be nationalised at all. Months after the nationalisation, Labour was replaced by a resurgent Conservative Party which immediately proceeded to denationalise most of the industry.

In his book, The 1945-1951 Labour Governments (1979), Robert Eatwell notes that the industries nationalised by Labour, some “semi-derelict”, “were more a liability than an asset”, continuing: “Iron and steel did not mean that Labour took charge of the commanding heights of the economy, nor even that it took over a truly profitable industry, for its pre-nationalisation profits stemmed from special circumstances.” Eatwell writes: “Labour’s gradualism left the major centres of private power largely untouched.”

The SWP and its left Labour mentors to the contrary, nationalising the least efficient capitalist operations points in the exact opposite direction to socialist expropriation. Socialist economic planning under the rule of the working class is based precisely on expropriating and developing the most advanced means of production. In his 1925 book Where Is Britain Going? Trotsky ridiculed the fantasies of gradual change spun by the Labour leaders in their efforts to deny the need for socialist revolution. Responding to a quip by Conservative prime minister Stanley Baldwin, an ardent anti-Communist and opponent of nationalisation, that even the revolutionary Trotsky was in favour of more efficient and productive industry in the case of the Soviet Union, Trotsky wrote:

“It is one thing to work in machine-shops, factories, shipyards, mines, that belong to capitalists; it is quite another thing to work in one’s own factories, mines, etc. That is a great distinction, Mr. Baldwin! And when the English workers have taken control of the mighty instruments of production created by them and their predecessors, they will make every effort to increase the productivity of labor.”

Leon Trotsky on Britain (1973)

Bourgeois nationalisation schemes have long been used by capitalist governments to pay off failing enterprises and to blunt working-class discontent. It was the TUC tops, responding to pressure from the membership of the trade unions, who insisted that Labour pledge itself to a programme of nationalisations before the 1945 election. But under capitalism, even nationalised industries remain subject to the laws of the market and the dictates of profitability. Nationalised concerns that aren’t competitive are either subjected to closures and job cuts or surrounded by a wall of protectionist tariffs and import controls, or both.

This became particularly evident when steel was renationalised in 1967 under the Harold Wilson Labour government, again with the aim of rationalising the industry and this time without serious opposition. The former owners were offered even more generous compensation than before, and ten per cent of the industry — notably including the highly profitable firms engaged in specialised finishing processes — was allowed to remain in private hands. Within a few years of its formation, the new British Steel Corporation (BSC), now under the Tory Heath government, adopted plans for concentrating production through the closure of numerous plants and the axing of more than 20,000 jobs. By 1979, a workforce of nearly 270,000 at the time BSC was formed had plunged to 156,000. And then Margaret Thatcher took her axe to the steelworkers.

The 1980 steel strike: 100 days of class war

Only months after her election, Thatcher presided over the sacking of British Leyland’s Longbridge car plant convenor Derek Robinson — the most prominent Communist trade unionist in the country — and the introduction of the Prior Bill, a draconian assault on trade union rights. Thatcher also provoked a strike by the steelworkers, thinking she had picked a soft target. The conservative steelworkers union, the Iron and Steel Trades Confederation (ISTC), today part of the Community union, was forced by its base to call a walkout. The ISTC bureaucracy under Bill Sirs formally restricted the strike to a wages dispute. But it was evident to all that this was a struggle to defend steel jobs and reverse Thatcher’s anti-union offensive. It was necessary that the rest of the trade union movement mobilise in solidarity with the ISTC.

We raised the call for a defensive general strike centred around limited demands in the interests of the whole of the working class and oppressed: to reverse the wave of redundancies throughout industry and for work-sharing on full pay; for a sliding scale of wages and pensions pegged to the cost of living; against cuts in social services and education; and to repulse the anti-union attacks. We called for elected strike committees and other organs responsible to the workers in order to take a general strike out of the hands of the TUC misleaders who would seek to sabotage such an action. In a Spartacist Britain supplement (15 February 1980), we wrote:

“This strike is a test for the entire working class. Defeat for the steel workers would mean a major setback for the whole class, and would pave the way for unprecedented legal shackles on trade union rights. But victory could turn the Prior Bill into a scrap of paper and provide a tremendous impetus to further class struggle.”

But the TUC tops managed to derail and subvert every attempt to spread the strike, while appealing for protectionist import controls to “save jobs”. After more than three months on the picket lines, the strikers were finally corralled back to work with the offer of a 16 per cent pay rise. But the extra money would be of little value to the many workers who were about to lose their jobs.

By 1981 the workforce at BSC was barely more than half what it had been before the strike. Her appetite whetted, Thatcher proceeded towards a direct confrontation with the miners union under Arthur Scargill in 1984 which proved to be a pivotal battle for the whole working class. The right-wing Labour and TUC tops were openly hostile to the miners strike; the “lefts” made eloquent vows of solidarity while disowning any effort at the base to spread the strike. Since that time, the union tops have cynically pointed to the defeat of the 1984-85 miners strike to promote their policy of defeatism. The result is a country littered with broken lives, zero-hours contracts, shoddy and decaying social services and massive indebtedness and impoverishment on one side and a fabulously wealthy handful of financiers on the other. Corporate Britain today devotes five times as much to paying dividends to shareholders as it does to paying contributions into its underfunded pension funds.

The state and revolution

Corbyn’s deserved popularity among working-class people is due to his clearly stated opposition to the ravages of the capitalist system. The solution offered by Corbyn and shadow chancellor John McDonnell is increased public spending and reindustrialisation of the country, which indeed are necessary. But to regenerate Britain’s infrastructure, to rebuild and vastly expand its manufacturing base and put the population back into productive work requires not parliamentary reform but a thoroughgoing proletarian socialist revolution to expropriate the bourgeoisie as a class.

Corbyn makes no claim to be a Marxist, unlike the SWP and the IMT. But for these pretenders, the very notion of a proletarian challenge to the bourgeois state is a nightmare; they seek rather to convince workers of the pipe-dream that the state can be transformed to serve the interests of working people and the oppressed. In regard to Tata today, SWP leader Charlie Kimber lectures the Tory government: “There was unlimited money for the banks when the crisis hit in 2008. Why not for steel?” (Socialist Worker, 30 March 2016). In case Kimber hasn’t noticed, the City of London is at the centre of the British capitalist economy; steel is not.

It is not the business of the working class to plead with the bourgeoisie to reorder its priorities. When the workers take power, they will reorganise the economy to plan production for the benefit of the population, not to amass profits for a handful of financiers and speculators. But before that can happen, the working class must defeat and shatter the bourgeois state power and replace the dictatorship of capital with the dictatorship of the proletariat.

Moreover, any capitalist bailout is carried out at the expense of the workers. A prime recent example is the bailout of the American car manufacturers a few years ago overseen by the Democratic Obama administration and facilitated by the pro-capitalist trade union bureaucracy. Today, many unionised car workers are making little more than McDonalds counter staff and benefits have been slashed. Likewise, Tata steel’s defined benefits pension fund — and the livelihoods of tens of thousands of retired workers — is clearly on the chopping block whatever deal gets worked out.

Our task as Marxists is not to prop up the decadent end-product of British imperialist domination and aggrandisement. Our starting point is to defend and advance the historic interests of the proletariat which, in Britain and internationally, lie in the fight to sweep away the anarchic and obsolescent capitalist system and replace it with a planned, collectivised economy based on an international division of labour. The social power of the proletariat lies in its unique role in the process of production and in its ability to organise and struggle collectively. That fighting capacity will not be enhanced through appeals to the capitalist government of the day to act as a guardian of the jobs and living standards of the working people.

It is necessary to mobilise the power of the trade unions to defend every job against further atomisation, immiseration and lumpenisation of the proletariat. It is necessary to struggle for jobs for all by spreading the available work to all those who can work with wage rises to assure a decent standard of living for all working people. It is necessary to fight for a government programme to build — by unionised workers being paid union wages — the homes, schools and hospitals the poor and working people of this country desperately need. In cases where plants are shut down, it is necessary to demand state-financed and union-supervised job retraining schemes on full pay. In the course of fighting for such demands the unions will be revived and reinvigorated and the workers will see more clearly who their enemy is. As Trotsky pointed out in the Transitional Programme:

“Under the menace of its own disintegration, the proletariat cannot permit the transformation of an increasing section of the workers into chronically unemployed paupers, living off the slops of a crumbling society. The right to employment is the only serious right left to the worker in a society based upon exploitation....

“The question is not one of a ‘normal’ collision between opposing material interests. The question is one of guarding the proletariat from decay, demoralization and ruin. The question is one of life or death of the only creative and progressive class, and by that token of the future of mankind. If capitalism is incapable of satisfying the demands inevitably arising from the calamities generated by itself, then let it perish. ‘Realizability’ or ‘unrealizability’ is in the given instance a question of the relationship of forces, which can be decided only by the struggle. By means of this struggle, no matter what its immediate practical successes may be, the workers will best come to understand the necessity of liquidating capitalist slavery.”

British capitalism should have perished long ago. But it will not die a natural death. The rotting edifice of the profit system must be ripped down. The working class needs to be made conscious of its role as the gravedigger of this system of exploitation, oppression, misery and war and as the creator of a new, egalitarian society realised through utilising the full potential of modern science and industry. A leadership must be forged based not on subordinating the workers’ interests to what is “realisable” under capitalism but on the understanding that the exploiters and those whom they exploit have no interests in common. What is needed is a revolutionary, proletarian and internationalist party committed to scientific socialism — Marxism.


In our article “No illusions in capitalist bailouts!” in Workers Hammer no 237, Winter 2016-2017, we stated in regard to the Clement Attlee Labour government elected in 1945: “Notwithstanding illusory promises that the working people were finally on the road to the supposed Clause IV paradise of ‘parliamentary socialism’, Labour’s main priority was to repay its massive loans from the US, primarily by enforcing severe austerity and wage restraint on the working class, which was forced to endure continued rationing of foods, and a wage freeze in 1948.”

While the Labour government certainly enforced severe austerity on the working class, it was not the case that “Labour’s main priority was to repay its massive loans from the US”. The loans were to be repaid over fifty years and payments did not begin until 1950.

The article continued, stating the government’s priorities correctly: “At the same time the Labour government sought to maintain the fiction that Britain remained a world power of the first rank. Under Attlee, Britain played the colonial overlord in the bloody partition of India in 1947. At home, investment in modernisation of industry, not to mention spending to improve life for the working class, ranked a distant second behind financing British imperialism’s military aims as a junior partner of the US, primarily in the anti-Soviet NATO alliance.” (From WH 238, Spring 2017.)


Workers Hammer No. 237

WH 237

Winter 2016-2017


No Brexit reversal — Britain out!

Down with the EU — For a workers Europe!


Ireland: For free abortion on demand!


Quote of the issue

The Bolshevik revolutionary


Steelworkers' jobs on the chopping block

No illusions in capitalist bailouts!


Against black nationalist slanders of Marx and Engels


Defend China against imperialism, counterrevolution!

Chauvinist uproar over Chinese steel


Fidel Castro 1926-2016

Defend the gains of the Cuban Revolution!