Twenty years ago Mr Strachey wrote The Theory and Practice of Socialism which was for many in the revolutionary 1930s a signpost to the future. His latest work, Contemporary Capitalism, is for the revisionist 1950s a guide to the present. In the intervening two decades Mr Strachey has moved from the extreme Left to left of centre . . .
His main thesis is that capitalism in the highly developed countries – the United States, Britain and Germany – has reached a new and distinct stage of development.
In each of these countries, the economy has become dominated by a handful of economic giants such as Dupont, General Motors, ICI, Unilever, IG Farben: he quotes Prof Galbraith of Harvard to the effect that
This atrophy of competition Mr Strachey sees as the most important characteristic of what he terms last-stage capitalism.
In the course of a marvellously compressed survey of economic theory from Ricardo to Keynes, Mr Strachey pays close attention to Marx
Mr Strachey claims to discern in Capital the germ of Keynes’s crisis theory as well as his conclusions as to the rate of interest. He slyly hastens to add, however, that
Mr Strachey has little difficulty in showing that, contrary to what Marx expected, the standard of living in the advanced capitalist countries has risen considerably over the last hundred years. (This is not so evident in the case of undeveloped areas.) The surprising thing, though, that emerges from his analysis of the statistical evidence is that this improvement in the living standards of the masses has not been due to any radical redistribution of income.
The raising of living standards has been made possible by the tremendous increase in labour productivity. It has been effected by the pressure of the organised workers, politically and through their trade unions. Paradoxically,
For the future, Mr Strachey believes, either democracy's influence grows to a point where it steadily replaces capitalism by socialism, or is itself destroyed.
This article appears in the print edition of the Irish Times