New Left Review I/66, March-April 1971

Andrew Glyn and Bob Sutcliffe

The Critical Condition of British Capital

Crisis is a word like wolf: it has been cried too often. But for British capitalism it looks as if this time the wolf is really at the door. A number of facts about the recent evolution of the British economy are well known enough—the rise in unemployment at the same time as an unprecedently high rate of price inflation and money wage increase. What is not so well realized, and especially by the left, is the extent to which these trends are eating into the profits of capital. In this article we present and analyse some startling facts about the recent decline in the rate of profit on capital and the share of profits in the national income. From 1964 to 1969 there was a huge increase in the share of the national income taken by the working class. It is a qualitatively new situation which cannot be explained as the result of a cyclical change. 1970 saw a continuation of the trend during a moment of exceptional political weakness on the part of capitalism. Placed in their historical context and related to changes elsewhere in the capitalist world, the economic events in Britain in the last few years seem particularly dramatic. An evaluation of the possibilities open to British capital and the contradictions which it faces shows that while economic measures and structural changes could bring some relief to capital they are unlikely to offer more than a partial way out. This has decisive political implications for the next few years: the advances made in the fight for higher wages mean that wages cannot remain in the centre of the class struggle. Capital’s necessary counter-attack demands that the struggle assumes a more political character.

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