1974 proved to be a turning point not only for Britain, but also for world politics and the world economy. The world slump of that year was the biggest since 1929. The post war economic upswing, fuelled by the expansion of world trade, had dramatically come to an end in the first simultaneous world downturn since the Thirties. Industrial production in the advanced capitalist countries fell by a massive ten per cent between July 1974 and April 1975. In the first half of 1975 output was three-and-a-half per cent down on the previous year, and international trade was 13 per cent lower. The crisis indicated that the “Golden Age” of capitalist expansion was over. Capitalism would never again be able to attain the growth rates of the 25-year upswing.
This slump in turn ushered in a new period of political, social and industrial turmoil throughout the capitalist world. The ruling class was seized with a deep sense of foreboding for the future of their system. “For years the gold enthusiasts have been regarded as barbarians”, noted The Economist. “Now that it is fashionable to talk of the imminent collapse of civilisation, their day has come on Wall Street.”[1]
1974 was a year of revolution. Portugal was rocked by a revolutionary movement of workers, soldiers, sailors and peasants, which succeeded in sweeping away the hated dictatorship of Caetano. In Southern Africa, the events in Portugal resulted in profound revolutionary changes in Angola, Guinea Bissau and Mozambique. In Ethiopia the removal of emperor Haile Selassie ended up in the nationalisation of the economy. In Spain, the dying Franco regime was met with an explosion of opposition and mass strikes. The overthrow of the Greek Junta produced a pre-revolutionary crisis in the country.
This was the most disturbed period faced by capitalism since the inter-war years. The strategists of capital, terrified by the scale of revolutionary events, began to make serious preparations for civil war to defend themselves and their system. The movement in the direction of revolution produced its opposite in the form of counterrevolutionary plots and conspiracies, like the “Gladio Conspiracy” that came to light at the time. It revealed the existence of secret military plans for the instalment of military police dictatorships throughout Europe. The ramifications of this made themselves felt in Britain too.
After the miners’ strike had brought down the Heath government, the question of a military “solution” to the problems of capitalism was not only discussed in the smoke-filled clubs and boardrooms of big business, but was openly debated in the “quality” press. The Times carried a series of articles on contingency measures to deal with a possible general strike situation, drawing on experiences such as the Kapp putsch in Germany in 1920. However, this was not a very pleasant analogy. General Kapp had marched at the head of his army into Berlin but was met with a spontaneous general strike. Unable to find a single stenographer to take down his decrees he eventually marched ignominiously out of the capital, impotent in face of the power of the German workers.
Military exercises took place at Heathrow airport under the guise of “counter-terrorism”. Brian Crozier, the MI6 and CIA “alongsider”, gave regular talks to groups of army officers warning of the possibility of military intervention in British politics. On one occasion, he recalls an audience of officers were so enthusiastic about such a scenario, that they “rose as one man, cheering and clapping for fully five minutes.”[2]
The ruling class were preparing for a showdown with organised Labour. The Tory theoretician and MP Ian Gilmour wrote a theoretical justification for doing away with democracy if it ever posed a threat to the capitalist system. Gilmour was no right-wing crank or obscure figure, but a leading Tory who became a minister in the Thatcher government. In his well-known book, Inside Right, Gilmour showed admirable frankness when describing the real attitude of the ruling class to democratic rights and the rule of the majority:
Conservatives do not worship democracy. For them, majority rule is a device… Rational, economic, utilitarian man exists only in the imagination of some economists and philosophers. Similarly, majorities do not always see where their best interests lie and then act upon their understanding. For Conservatives, therefore, democracy is a means to an end not an end in itself. In Dr Hayek’s words, democracy ‘is not an ultimate or absolute value and must be judged by what it will achieve’. And if it is leading to an end that is undesirable or is inconsistent with itself, then there is a theoretical case for ending it…
‘Numbers in a state’, said Burke, ‘are always of consideration, but they are not the whole consideration.’ In practice, no alternative to majority rule exists, though it has to be used in conjunction with other devices. And in the Conservative Party, unlike the Labour Party, there is no extreme wing which hankers after the death of parliamentary democracy and the imposition of a dictatorship. If our free institutions are overthrown or totally perverted, the Left not the Right will be responsible. There is no danger of a right-wing coup. Only if the constitution had already been destroyed by the Left, might the Right react and the Left find itself overthrown in its turn by a counter-coup from the Right.[3]
Stripped of its rhetoric about the dangers of a so-called “left dictatorship”, these authoritarian views represented a dire warning to the trade union and Labour movement. It was clear that if capitalism was in any way threatened by a left Labour government, despite being elected through the ballot-box, it would be faced with a conspiracy and overthrow by reactionary forces, as happened in Chile in September 1973, when the socialist government of Allende was overthrown in a military coup led by General Pinochet, backed by British and US capitalism.
In the aftermath of this coup, 30,000 Chilean workers were murdered in cold blood. Now the US imperialists try to distance themselves from the Pinochet regime and the coup, but at the time Henry Kissinger, a leading member of the Nixon administration and a Nobel Peace Prize winner (!) declared: “I don’t see why we need to stand by and watch a country go communist because of the irresponsibility of its own people.” The CIA, with the authorisation of Dr Kissinger, spent eight million dollars between 1970 and 1973 to destabilise the Chilean economy, sending money to right-wing strikers to bring down the Allende government.[4] In Britain, The Times, echoing the real feelings of the ruling class, welcomed the Pinochet coup: “there is a limit to the ruin a country can be expected to tolerate… The circumstances were such that a reasonable military man could in good faith have thought it his constitutional duty to intervene.”[5]