Speaking Volumes: British Capitalism, Workers and the Profits Squeeze

Martin Holmes on Andre Glyn and Bob Sutcliffe's British Capitalism, Workers and the Profits Squeeze .

The early 1970s was an intellectually exhilarating time to be an undergraduate student of politics and economics. Between 1972 and 1975, from my vantage point of University College, Oxford, textbook certainties and conventional economic orthodoxies crumbled before my eyes as inflation jumped from 8 per cent to per cent, unemployment doubled, the lights went out as the 1973-74 miners' strike precipitated Ted Heath's downfall, and earnest debates raged as to whether parliamentary democracy would survive. Inconvenient though it was to write two weekly essays by candlelight, it was cathartic, dramatic and revelatory; I felt that a momentous social experiment was being performed in the laboratory of British politics at which I had a privileged observer status.

Textbook explanations were so ludicrously outdated that I developed a mistrust of textbooks that has remained with me ever since. In their place I devoured the alternative explanations of both free market neo-liberalism and New Left Marxism. By the time the lights went out literally and metaphorically on Heath's government I had convinced myself that the intellectual battle had been won by Friedman and Hayek.

But one New Left analysis fascinated, absorbed and bugged me. British Capitalism, Workers and the Profits Squeeze, written by Andre Glyn and Bob Sutcliffe was published in 1972 and immediately became a cult classic. A Penguin Special at just 55p I read it in one sitting on a wet afternoon in December 1973. The authors proclaimed that the profits squeeze would not only lead to reduced working-class living standards as wages were cut but would also imperil the survival of capitalism. "Without profits to finance dividends and reinvestment capitalism cannot survive. So which will be sacrificed - the system itself or the prosperity of the 90 per cent of the population?" Furthermore, the authors argued "the only way working-class living standards can now be protected is through a successful revolutionary struggle . . . working-class leaders must adopt a new attitude to wage demands: they must realise that wage claims are becoming political weapons in a battle in which the existence of capitalism is at stake." The remedy? For Glyn and Sutcliffe ". . . abolishing the private ownership of capital and redistributing income in a socialist system could almost immediately provide a decent standard of life for everyone."

Intellectually I was wholly unconvinced; but the book's impact was in how it brilliantly predicted the crisis of 1973-74. In political terms it seemed amazingly prescient. What if the striking miners were to move from a quest for wages to a political strike? Who could stop the miners doing what they wanted anyway? Wasn't that the lesson of the 1972 strike now being confirmed in the winter of 1974? Was the talk of the ungovernability of Britain a prelude to the societal disintegration on which a Marxist revolution would thrive? Were the retired colonels in the Home Counties busily organising paramilitary volunteers the last line of resistance to an historical inevitability? Would the external oil price shock (I remember obtaining petrol ration coupons for my Austin 1300) lead to an economic meltdown followed by political revolution?

In short were Glyn and Sutcliffe right all along? Although unpersuaded by their Marxist ideology, I could not so easily dismiss the political implications of their thesis. Free market economic liberalism might be an intellectual choice but what chance did it have of implementation in the unfolding drama of the February 1974 election? When I later learned that Cabinet minister John Davies told his family at Christmas 1973 that it could be the last time they would gather together I was not surprised.

Twenty-one years later I am still convinced that Glyn and Sutcliffe's Marxist analysis was wrong. But British Capitalism, Workers and the Profits Squeeze didn't half make me think as I observed history in the making. It still does, which is why I recommend it to my students as a classic of its genre, even if the revolutionary leader turned out to be a grocer's daughter from Grantham.

Martin Holmes is a lecturer in politics at St Hugh's College, Oxford.