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The Labour Party and the Planned Economy, 1931-1951

The Labour Party and the Planned Economy, 1931-1951

Richard Toye
Volume: 32
Copyright Date: 2003
Pages: 280
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  • Book Info
    The Labour Party and the Planned Economy, 1931-1951
    Book Description:

    In the general election of 1931, the Labour Party campaigned on the slogan `Plan or Perish'. The party's pledge to create a planned socialist economy was a novelty, and marked the rejection of the gradualist, evolutionary socialism to which Labour had adhered under the leadership of Ramsay MacDonald. Although heavily defeated in that election, Labour stuck to its commitment. The Attlee government came to power in 1945 determined to plan comprehensively. Yet, the aspiration to create a fully planned economy was not met. This book explores the origins and evolution of the promise, in order to explain why it was not fulfilled. RICHARD TOYE lectures in history at Homerton College, Cambridge.

    eISBN: 978-1-84615-100-2
    Subjects: History, Political Science

Table of Contents

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  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-viii)
  3. Acknowledgements
    (pp. ix-x)
    Richard Toye
  4. Abbreviations
    (pp. xi-xii)
  5. Introduction
    (pp. 1-8)

    The British Labour Party ended the twentieth century as it began it, at its formation in 1900 – as a non-socialist party, albeit with many socialists among it numbers. Between 1918 and 1995, however, Labour was formally committed to the common ownership of the means of production. Yet whether, during this period, Labour was at any point a truly socialist party has been the subject of intense dispute and, indeed, remains a matter of current political significance. Within this debate, the record of Clement Attlee’s 1945–51 government – the Labour government which had, perhaps, the most to show for its time...

  6. 1 Planning: Birth of an Idea
    (pp. 9-33)

    In the nineteenth century socialists wanted to abolish rule by private economic interest, but the idea of the planned economy to replace capitalism was born only in the twentieth. The birth of the concept of planning was thus a seminal event, both for economic theory and perhaps still more importantly for socialism. Attempts to devise and implement schemes for the central direction of nations’ economic lives in supersession of private enterprise marked a step away from mere utopianism; and, somewhat paradoxically, such planning was also a major departure from marxian anti-utopianism, which saw attempts to describe the future socialist order...

  7. 2 Plan or Perish: 1931 and its Impact
    (pp. 34-64)

    In February 1931, Lloyd George wrote to the Labour cabinet minister George Lansbury that he was ‘genuinely perplexed and disappointed by the stickiness of some of your colleagues. They are always finding reasons for not doing things. They are too easily scared by obstacles and interests.’ He also prophesied that unless ministers showed, like Lansbury, some faith and courage, ‘your party and ours will be landed in an overwhelming catastrophe’.¹ It was this ‘stickiness’ of MacDonald, Snowden and others that, from 1930 onwards, brought forth increasingly vocal calls for planning as an antidote to complacency and economic stagnation; these came...

  8. 3 Practical Economics? 1932–1939
    (pp. 65-86)

    By the close of 1932, the idea of the planned economy to replace capitalism was firmly established as the defining principle of the Labour Party’s socialist policy. As a consequence of the events of 1931, and bolstered by the seeming success of the Soviet model, planning was, within the Labour movement, the almost universally accepted antidote to both the incrementalism of the MacDonald years and ‘the cult of impotence’ supposedly preached by the National government in the face of the slump.¹ Moreover, as the decade drew on, the case for planning was strengthened by developments abroad. Labour politicians argued, as...

  9. 4 The Economic Consequences of the War
    (pp. 87-113)

    The outbreak of war in September 1939 created mixed feelings of moral relief and terrified apprehension. An end had come at last to the National government’s policy of appeasing Germany, so recently hugely popular with the public, but now widely seen as a miserable sequence of betrayals. But the horrors of the great war seemed, if anything, likely to be exceeded, given the ‘progress’ of military technology. Stanley Baldwin’s famous phrase, ‘the bomber will always get through’, continued to resonate. A typical view from within the Labour Party was recorded by Barbara Betts (later Castle) in her memoirs: ‘We were...

  10. 5 Shall the Spell be Broken?
    (pp. 114-138)

    Labour’s entry into Winston Churchill’s coalition government in May 1940 not only facilitated a crucial strengthening of the war effort, but played a key part in transforming the party’s own future political fortunes. Since September 1939 the party had been in an uncomfortable position. Prior to the onset of military disaster, Chamberlain remained as personally popular as ever, whereas there were doubts about Attlee’s leadership even from within the Parliamentary Labour Party. Moreover, direct attacks on the government could lead to charges of disloyalty in war time; yet equally, ‘patriotic’ measures such as the electoral truce led to accusations of...

  11. 6 Planning for Reconstruction
    (pp. 139-155)

    At the end of September 1939, the young James Callaghan, at that time the assistant secretary of the Inland Revenue staff federation, wrote that ‘Socialists must be ready to take advantage of the war and the immediate post-war situation’.¹ A few days later, he jotted down his own personal aspirations, calling for colonial freedom, an end to the system of imperial preference, and for fundamental social and economic change at home: ‘Britain to cease enduring two millions unemployed; the Bank of England to be controlled and a National Investment Bank to be established; coal-mining, cotton, woollen and agriculture industries to...

  12. 7 International Planning: External Economic Policy in the 1940s
    (pp. 156-184)

    In December 1945 the new Labour government accepted an American loan on terms which one cabinet minister, Emanuel Shinwell, declared would make socialist planning in Britain impossible, a view some historians have endorsed.¹ According to this theory, Labour’s manifest failure to construct a planned economy after the war was a consequence of accepting the commitments to international economic liberalisation which the Americans demanded as the conditions of the much-needed loan. By this argument, making these commitments (which included membership of the newly formed International Monetary Fund (IMF) and World Bank, early sterling convertibility and participation in an international system of...

  13. 8 Bricks Without Straw: Unplanned Socialism, 1945–1947
    (pp. 185-207)

    During the Attlee government’s first eighteen months in office, before the 1947 fuel crisis appeared to make a mockery of its claims of foresight and efficiency, the word ‘planning’ was still a great political trump card for Labour. On the one hand, economic circumstances were such that the need for a fair measure of government involvement in resource allocation during the transition from war to peace was pretty much undeniable. On the other, the Conservative opposition was conveniently split between those who favoured pure free enterprise and put all government failures down to planning, and the ‘me too-ers’ who argued...

  14. 9 Planning, Priorities and Politics, 1947–1951
    (pp. 208-235)

    ‘What is national planning but an insistence that human beings shall make ethical choices on a national scale?’ asked Aneurin Bevan at the 1949 Labour Party conference. He continued: ‘Planning means that you ask yourself the question: which comes first? What is the most important? . . . The language of priorities is the religion of Socialism.’¹ This was a subtle, oblique and persuasive defence of the government’s programme of cuts in investment and social services, of which Bevan’s own housing programme had been a notable victim. Chiefly associated not with Bevan, but with the famously ascetic figure of Cripps,...

  15. Conclusion
    (pp. 236-242)

    When the Labour Party left office in 1951, it was still committed to economic planning, and indeed claimed to have undertaken such planning when in government. Nevertheless, the party’s thought about the nature and scope of the planned economy was radically different from the planning policies and programmes which had been consequent upon its far heavier defeat twenty years earlier. The virtues of nationalisation as a planning tool were in doubt; the notion of consumer sovereignty was no longer a complete anathema; the need for a constructive policy for private industry was increasingly recognised; and global demand management via the...

  16. Bibliography
    (pp. 243-258)
  17. Index
    (pp. 259-268)
  18. Back Matter
    (pp. 269-269)