The Spirit 0f 1945 and where did it go?

Contribution of ideas to Ken Loache’s filmRalph Blake Financial Analyst former head of research & strategy Goldman Sachs International

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Industry subject to state control during the WWII

UK industry needed to meet:: basic needs of whole UK population Materially support the war effort task

Private industry had little capital and organisation after 30s depression

State planning and organisation need to fulfil the role Capital came from USA

The equivalent of £200 billion of today’s money lent by US government State control, regulation and borrowed finance was made in the

common good

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Nationalisation and the UK labour movement

Was a key policy of the Independent Labour Movement Success in transforming Soviet Union meant it had affinity with

some sections of working classOne of Labour’s key 45 demands

Industry in the service of the nation - Houses for the people Price controls on food & building materials NHS Cradle to grave welfare state War dividend

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1945 UK industry had to be state controlled & funded

At the end of the war apart from the USA & UK most of the world’s industrial capacity had been raised to the ground or dismantled

UK had to help meet the supply of manufactured goods to meet the world demand little private capital after 30s & war Private industry fragmented

Nationalisation provided subsidised: Materials, energy, transport and infrastructure

By 1952 the UK was producing 25.4% of the world’s manufactured goods

How did it fall to 2.9% by 2009?

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What was nationalised and what was reversed by Tories?

Coal Utilities Gas Steel Transport Only steel renationalised by Tories but nationalised again in 1967 to subsidise materials to

industry

Later wave of nationalisations to deal with crisis of 1970sRolls RoyceBritish LeylandBritish AerospaceBritish Shipbuilding

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The UK losses it’s lead as the world catches up

Rest of the world builds up it’s industry with more investment and lower wages

UK industry profitability falls from 16.5% in 1950 -54 to 9.7% in 1970 on lack of investment Economist coined the classic phrase “Profits first.

Investment later”

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The end of the boom

• a 30 year period of global expansion ends abruptly in 1974• Over production of goods

• Over accumulation of profits

• Falling rate of profits

• And mass over capacity

• Led by the car, shipbuilding and aerospace industries

• Labour tries to save failing industries by nationalisation

• But capitalism needs to reduce capacity and increase profits rates to compete with rest of world

• Enter Thatcher

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Thatcher’s solution

• privatise

• New owners will rationalise and return rate of profit

• The did the latter but not the former

• Rate of profit never competitive because of low investment and higher wage rates

• Manufacturing has flown East where there are higher rates of profit

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Can UK industry be rebuilt?

Not on the basis of competition on the world market But on the basis of meeting the common good

Cheap or free integrated public transport Socially affordable sustainable housing Cheap renewable energy

Any economy needs these to function they would use some of the potential of our some 5 million unemployed adults and

young Through a national investment bank instead of bank bail outs A fair redistributive tax system instead of austerity Take oil under public ownership and control Close tax avoidance

Generate demand in the economy to create jobs in the private sector

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Industry under common control & common planning

Unlike Soviet & 1945 model People’s industries would genuinely serve the

democratically decided needs of whole populationThe industries would be participative and run by the

people that work in them to meet the needs of the whole population

they would be protected from private competition

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