Andrew B. Wilson: Rolling Back the Socialist Tide





[Andrew B. Wilson, a former Business Week bureau chief in Dallas and London, is a writer living in St. Louis, Missouri. He is working on a book on the rise and fall of socialism in Britain between the Churchill and Thatcher eras.]

Talk about a swift reversal in fortune. Consider how quickly British Prime Minister Winston Churchill went from winning a war to losing the peace. On V-E Day -- May 8, 1945, the day after the surrender of Nazi Germany -- Churchill stood on a balcony overlooking London's Parliament Square and addressed a great, cheering sea of humanity. When he told the people, "This is your victory," they roared back: "No, it's yours!" A little less than two months later, the British people went to the polls...and voted him out of office.

Just like that, the British prime minister went from basking in the glow of public adulation to staring at election results that showed an overwhelming lack of support for his continued leadership.

For the record: Clement Attlee and the Labour Party won 48 percent of the popular vote, compared to 40 percent for Churchill and the Conservatives and 9 percent for the Liberals. That gave the Labour Party an almost two to one advantage over the Conservatives in the House of Commons (393 seats to 213). This was, and still is, the biggest onetime swing ever in a British general election, with Labour adding a grand total of 239 seats to the 154 that it held in the previous election. Many lifelong Tories voted Labour. So too did most of Britain's returning soldiers.

Almost all the pundits expected Churchill to coast to victory. So did Harry Truman, Joseph Stalin, and other world leaders. Stalin suspended all activities at the Potsdam Conference in July in the wake of the news and V. M. Molotov, his foreign secretary, was seen wandering around, muttering, "How could this be? How did we not know in advance?"

With characteristic humor, Churchill described what transpired in the 1945 election with these words:

On the night of 10 May 1940, at the outset of the mighty Battle of Britain, I acquired the chief power in the State, which henceforth I wielded in ever-growing measure for five years and three months of world war, at the end of which time, all our enemies having surrendered unconditionally or being about to do so, I was immediately dismissed by the British electorate from all further conduct in their affairs.

More than a stunning defeat for Churchill, however, this was an extraordinary victory for the Labour Party -- and then current progressive notions of change.

Labour had two key messages in the 1945 election. First, it promised to build an all-embracing, cradle-to-grave welfare state. And second, it campaigned on the idea that it would do a better job than the Conservatives not just in spreading wealth, but in raising it up out of the ashes of war...and putting the country on a path of uninterrupted growth.

Labour called for the outright nationalization of roughly 20 percent of British industry, including coal, steel, gas, and electric utilities, and all airline, rail, and bus services. It called for a high degree of central planning and control over the remaining 80 percent of industry under private ownership. And it promised to organize production more efficiently, to override "market failure," and to guarantee high wages and full employment.

But where was the evidence that a centrally planned socialist state could pull off such miracles?

Short answer: There was none.

To the contrary, if what had happened in communist Russia was any guide, socialism in its most extreme form -- with the total abolition of private property -- had been a complete disaster. Through the forced collectivization of agriculture, Stalin had caused millions of peasants to starve to death.

Even so, progressives in Britain and the United States refused to think ill of the murderous Stalin and hailed communist Russia as the coming of "a New Civilization." "All I know," the British socialist Beatrice Webb confided in her diary in 1932 as she and her husband, Sidney, were writing a voluminous and what purported to be a comprehensive study of conditions in Soviet Russia, "is that I wish Russian Communism to succeed." The playwright George Bernard Shaw, a close friend of the Webbs, flatly stated after a visit to Russia, "There was not, and could not be, a food shortage in the USSR." Walter Duranty, the New York Times's Pulitzer Prize-winning Moscow bureau chief, took that falsehood and raised it to a still more preposterous height, telling his American readers that Russian granaries "were overflowing with grain" and that the cows were "plump and contented."

CLOSER TO HOME, progressives on both sides of the Atlantic missed, or chose to ignore, another obvious discrepancy between their rhetoric and economic reality: while all the pump-priming and interventionist policies pursued by Herbert Hoover and Franklin Roosevelt in the United States had done nothing to arrest, let alone reverse, the deepest and most prolonged economic downturn in the nation's history, British governments that kept a tight lid on government spending, over these same years, quietly achieved far better results than the free-spending American presidents. Britain had an average annual growth rate of 4.5 percent from 1933 to 1936, and it easily exceeded pre-Depression levels of prosperity by the end of that period. Through the thirties Britain sustained much lower rates of unemployment than the U.S.

When I spoke with him recently, the eminent English historian Richard Overy discussed how the "failure of capitalism" became an article of faith among the intellectual elite in both Britain and the United States during the interwar years. He observed, "Intellectuals in the 1930s assumed that capitalism was economically inefficient and morally repulsive."

But Britain differed from the United States in one important regard during the thirties. While the U.S. swung to the left politically, Britain remained solidly conservative. Most middle-class people, and many working-class people as well, continued to regard socialism, and hence the Labour Party, with considerable suspicion.

This lent a definite piquancy to the 1945 election. With one brief exception (a Labour-led coalition government from 1929 to 1931), Labour's role had always been to agitate for change, and to critique power, not to wield it. It was like the barking dog that is forever chasing the bus. Then, to almost everyone's amazement, the Labour Party, after all those years of trying, did the impossible: It wound up catching the bus. Attlee, his colleagues, and their allies among the intellectual elite moved into the driver's seat -- with a big majority in Parliament and a clear mandate for change.

News of what had happened famously caused a lady diner at the Savoy to exclaim, "But this is terrible -- they've elected a Labour Government, and the country will never stand for that!" But this was a very real if unexpected change. The 1945 election cut a new channel for British politics and government-moving it far to the left for a generation to come.

The next change of comparable magnitude in British politics happened 34 years later, in 1979, when Margaret Thatcher came to power at the end of Britain's "winter of discontent." In mounting a counter-revolution against socialism, she rechanneled British politics and government a second time. She went well beyond any previous British prime minister, including Churchill, in affirming the principles of free enterprise and limited government...

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