The end of World War Two left behind a world in upheaval. Demobilised troops and a war-weary population demanded a better future. Resistance movements in Europe published programmes demanding nationalisation. Workers’ strikes broke out across the capitalist West. Former colonies struggled for freedom. The Stalinist USSR emerged from the war strengthened and, despite being controlled by a dictatorial bureaucracy, provided a model for those looking to break with capitalism. Virtually no part of the world was untouched by a revolutionary mood.
It was against this backdrop that Labour won a landslide election victory in 1945. Workers were determined not to return to poverty, poor housing and health. Despite being posed as ‘the man who beat the Nazis’ – and saying Labour “would have to fall back on some form of a Gestapo” to impose socialism – Churchill was decisively booted out of office at the first opportunity.
The 1945 government, led by Clement Attlee, remains the most radical reforming Labour government ever. Unfortunately, that says as much about the competition for that title as it does for the Attlee government itself.
While the Labour Party at the time declared itself to be a ‘socialist party’ and had a working-class membership and base of support, its leaders were drawn mainly from the right of the party and were wedded to maintaining capitalism. Reforms by the Attlee government went as far as they did because of pressure and struggles from below.
Reforms
Nonetheless, the reforms were massive achievements for the working class and improved the lives of millions. Large sections of industry were nationalised, council housing was built, and the welfare state was constructed, with the NHS as its jewel in the crown.
However, the refusal of the Labour leaders to break with capitalism meant that the gains made were constrained by the demands of the profit system. Most of the reforms have now been taken back, a process that began even while the post-war Labour government was still in power.
Britain in 1945 was faced with a multitude of economic problems. Large swathes of housing and industry had been destroyed by bombing. The supply of goods from the US through their costly wartime ‘Lend-Lease’ policy came to an end. War had been expensive, driving a rise in the national debt from £760 million to £3.5 billion (the equivalent of £152 billion today). Great expense was poured into maintaining a crumbling empire, while the country was unable to compete with the US as a global power. The economy only recovered to pre-war levels in the 1950s.
Labour nationalised key sections of the economy, including coal, steel, the railways and the Bank of England. These measures were popular with the working class, who wanted to be able to get rid of greedy bosses and to direct the economy in their own interests.
The intense drive for profit in the private coal industry meant miners were exposed to extremely dangerous conditions. The hope was that public ownership would bring an end to such abuses.
Rescuing capitalism
Labour’s leadership, however, viewed these nationalisations differently. State intervention was needed to rescue important parts of the capitalist economy and help rebuild after the devastation of war. They were also pushed into carrying out reforms in order to try and prevent a movement for revolutionary change.
They ensured that reforms remained within certain limits. Nationalised industries were not controlled by workers but by the former heads of private firms. The public sector remained a minority of the economy and was dictated to by the needs of the privately-owned majority.
Had the largest parts of the economy been taken over and placed under the control of workers, production could have been democratically planned. All the wealth of society could have been used to improve people’s lives, without the capitalists taking their pound of flesh.
As it was, the economy was left at the mercy of capitalist profiteering, and shortages remained. The immediate post-war period was known as the ‘age of austerity’. Rationing continued (until 1954) and was even tightened; bread was rationed which hadn’t been the case during the war.
Hemmed in by its adherence to capitalism, the government was unable to afford what was needed to fulfil the popular desire for change. Income tax for workers stayed high to try and plug the gap.
The government borrowed $3.75 billion from the US and received a further $3.2 billion from their Marshall Aid programme (see ‘A new world order – global reconstruction after World War Two’ at socialistparty.org.uk), at the cost of removing trade barriers for American firms.
House building, while huge by today’s standards, was not fast enough to meet demand. There was a shortage of 1.5 million homes by 1951, and slum conditions still remained in major cities.
The idea of an NHS that was completely free at the point of use began to be eroded as early as 1951, just three years after its foundation. The introduction of charges for glasses and false teeth led to NHS founder Nye Bevan and other left-leaning ministers walking out of the government.
While the 1945 government made big domestic reforms, its foreign policy more clearly revealed its capitalist credentials. Despite its dwindling empire, Britain continued to pursue an imperialist agenda.
Forced to concede independence to India, it oversaw the bloody partition of the subcontinent. Troops were sent to crush movements in different parts of the world, including the communist-led resistance in Greece.
Britain became increasingly subordinate to US imperialism, joining the Korean War at its behest in 1950, and helping to found Nato. Labour began pursuing nuclear weapons almost as soon as it entered office, diverting enormous resources away from the fledgeling welfare state.
Labour was reelected in 1950 with a reduced majority but was forced to call another election the following year after the resignation of Bevan. It was defeated by Churchill’s Tories despite having won more votes. In fact, its 48.8% remains the highest share of the vote achieved by any party in Britain.
Because the reforms made by the Attlee government remained within a capitalist framework they have been susceptible to attack from the bosses and their representatives. Some were quickly reversed by the Conservatives, such as iron and steel privatisation in 1955. The NHS still exists but has been battered by successive cuts and privatisations.
While the 1945 government ultimately protected capitalism, it was forced to concede huge reforms by Labour’s working-class base, and by struggles in wider society. Today, Labour members don’t have the same degree of influence over the party’s leadership.
The undemocratic constitutional reforms made by Blair were not fundamentally changed under Corbyn. Keir Starmer is now taking Labour back to being an out-and-out capitalist party.
We need a new mass party that represents the working class. But it must learn from the past. Accepting the logic of capitalism restricts the scope of changes that can be made because profit for the bosses comes first.
The desire for change that workers expressed in the 1945 election could only have been realised in a complete and permanent way by socialist planning of the economy. Seventy-five years on, with capitalism deep in crisis, the Socialist Party’s socialist programme is needed more than ever.
