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Labour must have no illusions about the great fight which will be waged against these groups [of capitalist interests]. They will resist fiercely because what is at stake is not so much their profits as their personal and social power, which takes two forms: power in society as a whole, and power over workers in industry. As long as the first form of power remains, all the efforts of the workers in the factories and through the trade unions to diminish the second form of power can only have limited success. The fight for workers’ rights in industry and for more effective workers’ representation, through such things as workers’ councils and production committees, is, of course, of very great importance and, as we shall show later, it has a vital part to play in the total struggle against the capitalists. But it can never be a substitute for the necessary political fight to destroy the power wielded over society as a whole by the great capitalist interest-groups.
These great groups—the banks and insurance companies, the iron and steel trades, the big trusts and combines like Imperial Chemicals, Unilever, Courtalds, General Electric, the oil and rubber companies, and so on—are today great independent societies which constitute a state (or a series of states) within the state, subject to their own internal laws and agreements and able, by their own decisions, to control the lives of millions of human beings. Their economic power is supported by the political power which they exercise through innumerable personal contacts in other branches of industry and commerce, in the Tory Party, in the Civil Service, in the higher ranks of the armed forces, the judiciary and the professions—in short, all that forms part of the complex which we call ‘the ruling classes’. Their power is, in fact, a class power and, as long as this class power remains unbroken, the ability of the leading capitalist groups to run things in their way—and, at worst, to sabotage—is enormous. This power exercised in a variety of subtle ways which no formal laws—no mere legislative decisions of a Labour government, for example—can break. It can only be broken by destroying not merely their political influence, but what is its real basis, their economic power in the great productive forces over which they exercise practically unchallenged control.
Michał Kalecki, “The Essentials of Democratic Planning” in which my favorite economist offers his advice to the UK’s Labour Party in 1942. Labour would indeed go on to win in the following election, but never did take Kalecki’s advice to maintain full employment policies in the face of resistance from the capitalist class.
I think the basic idea is sound. Basic Keynesian policies can be used to guarantee full employment, which erodes the class power of the capitalists, and puts more power in the hands of the working class. Thus, a more radical politics becomes possible. Of course, the capitalist class knows that guaranteed full employment would eventually destroy their class power, and put mobilizing politically against it ahead of their own profits. The big question is how to withstand this pressure. Labour in the 1950s and 60s always backed off full employment policies. Kalecki described this as the “political business cycle.” The same dynamic seems evident today.
In chapter 8 of The Constitution of Liberty, Friedrich Hayek defends the idea of some people inheriting vast sums of money for the good of society as a whole. You see, we proles can’t handle “the propagation of new ideas in politics, morals, and religion” ourselves. We need people “who can back their beliefs financially” to do that sort of thing. Of course, not all of the idle rich will take it upon themselves to instruct the lower orders:
