Stuart Holland: The Socialist Challenge (1975)

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Stuart Holland was an Oxford-educated economist, with degrees in history and economics, who on graduating worked with the economist Thomas Balogh and then in the cabinet office for Harold Wilson in 1964. After a research fellowship at Sussex University, he then in 1974 became advisor to Judith Hart, the Minister for International Development. In 1972 he had published a study of ‘The State as Entrepreneur’. This led to his involvement in developing the Labour Party’s economic strategy while Labour was in opposition, submitting a number of papers to the National Executive Committee and its sub-committees, with many of his ideas being incorporated into the Labour Programme 1973 and the manifesto for the February 1974 election. In 1979, Holland was elected as MP for Vauxhall in London. He stood down in 1989 to return to academia, moving to the European University Institute in Florence. Having taught at a range of universities and written numerous books and articles, Holland, now 79, is attached to the University of Coimbra in Portugal.

Holland challenged the mixed economy perspective presented by Anthony Crosland in his ‘Future of Socialism’ and subsequent works, which dominated Labour Party economic thinking until the early 1970’s. Holland was influenced by the French experience of economic planning and the Belgian socialist Prime Minister Paul Henri Spaak and President of the European Steel and Coal Community, and was involved in the development of Labour Party policy on the Common Market in the 1960’s and the development of the Treaty of Rome. He now focuses mainly on European and international economics. He has maintained an interest in international development, having served as shadow Minister between 1983 and 1987, under Kinnock’s leadership. He has written a book on Eritrea.

The Socialist Challenge, published in 1975, set out the theoretical basis and the programme that was to become known as the Alternative Economic Strategy. At the time the Labour Party NEC and the shadow cabinet were dominated by a left-wing group which included Tony Benn, Ian Mikardo, Eric Heffer, Judith Hart and Albert Booth. Tony Benn as Secretary of State for Industry tried to implement the strategy, but was moved to Energy Secretary where he had less influence. The story of the rise and fall of the new economic policy is told in John Medhurst’s That Option No Longer Exists, published in 2014.

“What is the socialist challenge? Essentially, it is the claim that we can transform the injustice inequality and inefficiency of modern capitalism. In Britain in the early 1970’s the Labour Party shaped a radical new strategy for the beginnings of such transformation. The programme for extended public ownership, strategic planning and workers’ democracy opened the feasibility of a genuine transition to socialism in a democratic society. For the first time since the immediate post-war period, the socialist challenge moved from theory to the politics of a mass party in government.

“The main dimensions of Labour’s socialist challenge include not only a penetration of the commanding heights of the modern capitalism in the meso-economic sector, but also a simultaneous transformation of the prevailing class structures which concentrate economic and social power in the hands of a largely self-perpetuating oligarchy. This can never be a complete or final process. There is no socialist utopia at the end of a specific programme for transformation.

“Socialism is the creation of a society in which it is easier to secure self-fulfilment through serving society than through the exclusive pursuit of self alone… It is a society in which people are both practical and idealists.

“Progress to socialism should be an ongoing process, but one in which the critical centres of capitalist power and class were transformed by a socialist government, backed by the trade unions. It is a key premise of this analysis that such transformation can be achieved trough democratic processes. Without such democratic change, transition to socialism could prove less a controlled transition in the public interest, an explosion of social resentment and political counter-reaction, challenging freedoms which are rightly held dear even in an economically unjust society. On the other hand, such democratic reforms must be effectively revolutionary in character. In other words, they must reverse the current dominance of capitalist modes of production and capitalist motivation into a dominance of democratically controlled socialism. They must transform capitalist society rather than try ineffectively to alleviate its implicit injustice.”

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