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CHAPTER 4
selective and reserved for the ‘commanding heights’ of the economy, or industries that are thought to be ‘natural monopolies’. The 1945–51 Attlee Labour government, for instance, nationalized the major utilities – electricity, gas, coal, steel, the railways and so on – but left most of UK industry in private hands. z z Economic management , seeing the need for capitalism to be regulated in order to deliver sustainable growth. After 1945, most social democratic parties were converted to Keynesianism (see p. 40) as a device for controlling the economy and delivering full employment. z z The welfare state, viewing it as the principal means of reforming or humanizing capitalism. Its attraction is that it acts as a redistributive mechanism that helps to promote social equality and eradicate poverty. Capitalism no longer needs to be abolished, only modified through the establishment of reformed or welfare capitalism. An attempt to give theoretical substance to these developments, and in effect update Bernstein, was made by Anthony Crosland (1918–77) in The Future of Socialism (1956). He subscribed to managerialism , in believing that modern capitalism bore little resemblance to the nineteenth-century model that Marx had had in mind. Crosland suggested that a new class of managers, experts and technocrats had supplanted the old capitalist class and come to dominate all advanced industrial societies, both capitalist and communist. The ownership of wealth had therefore become divorced from its control. Whereas shareholders, who own businesses, were principally concerned with profit, salaried managers, whomake day-to-day business decisions, have a broader range of goals, including maintaining industrial harmony and upholding the public image of the company. Such developments implied that Marxism had become irrelevant: if capitalism could no longer be viewed as a system of class exploitation, the fundamentalist goals of nationalization and planning were simply outdated. Crosland thus recast socialism in terms of politics of social justice, rather than the politics of ownership. Wealth need not be owned in common, because it could be redistributed through a welfare state that is financed by progressive taxation. However, Crosland recognized that economic growth plays a crucial role in the achievement of socialism. A growing economy is essential to generate the tax revenues needed to finance more generous social expenditure, and the prosperous will only be prepared to finance the needy if their own living standards are underwritten by economic growth. The crisis of social democracy During the early post-1945 period, Keynesian social democracy – or traditional social democracy – appeared to have triumphed. Its strength was that it harnessed the dynamism of the market without succumbing to the levels of inequality and instability that Marx believed would doom capitalism. Nevertheless, Keynesian social democracy was based on an (arguably) inherently unstable compromise. On the one hand, there
was a pragmatic acceptance of the market as the only reliable means of generating wealth. This reluctant conversion to the market meant that social democrats accepted that there was no viable socialist alternative to the market, meaning that the socialist project was reborn as an attempt to reform, not replace, capitalism. On the other hand, the socialist ethic survived in the form of a commitment to social justice. This, in turn, was linked to a weak notion of equality: distributive equality, the idea
Managerialism: The theory that a governing class of managers, technocrats and state officials – those who possess technical and administrative skills – dominates both capitalist and communist societies.
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