[page 15]
CAPITAL VERSUS THE REGIONS, Stuart Holland. Macmillans. pp328. £4.95. THE REGIONAL PROBLEM, Stuart Holland, Macmillans. pp179. £3.95.
If Tony Benn has a guru it must be Stuart Holland. Fconomic advisor to Wilson in the Sixties, Holland has since become the brains behind the alternative cconomic strategy" of the siege cconomy and import controls so beloved by Benn and the Broad Left. In these two new works, one of economic theory and the other polemical. Holland extends the alternative strategy to the problems besetting Furope's backward regions.
Holland's thesis is deceptively simple: the anarchy of capitalism inevitably creates rich and poor regions within a single country as capital drains from areas of low profitability in scarch of a higher rute of return eisewhere. The advent of the EEC with its free movement of capital will only make this regional imbalance worse.
All attempts to reverse this tendency through redirection of industry have failed because governments and conventional
Keynesian cconomics ignored the rise of multinational companies what Holland christens the "mese-economic sector". The multinationals are little tempted by government cash: their primary need is abundant labour. Block them from expanding their branch factories in the South East by refusing them planning permission. and they are just as likely to move out of the country as to the North Fast. Consequently, labour moves to the multinationals, not vice-versa.
Holland proposes to harness meso-oconomic power. This is achieved by (1) a huge extension of the public sector into profitable new markets rather than merely shoring up lame ducks, (2) using the threat of this direct cconomic competition with the multinationals to force them to invest in the regions. Holland draws heavily on Italian experience to prove his case. He cites the example of liat which refused to expand to the poor Merzogiorno region of southern Italy, preferring to rely on migrant labour coming north. IRL, the umbrella company which runs Italian nationalised industry. deliberately expanded into the medium-range car market in competition with Fiat. Flat moved south, according to Holland, to head off further governmentinspired competition.
For Holland, this expansion of state capitalism is the route to socialism. When the workers see that it is state capitalism that has brought jobs to the regions, they will revolt against the privately owned mesocconomic sector and demand to manage the multinationals themseives.
It is Holland's plans for harnessing mesocconomic power, and the political conclusions he draws from this, which cause ns to be sceptical. He remains trapped in the contradictions of trying to challenge the international capitalist conomy and the muitinationals from a purely national basis. Are the super new nationalised enterprises to compete in the already saturated world markets? IT Holland is merely talking about big state enterprises operating in the home market, then what has changed that will stop the multinationals pulling out if challenged? The multinationals might even resort to political subversion as ITT did in
Chile. This is especially true in the British context with greater penetration of the economy by multinationals than in Italy The futility of the attempts to defy the laws of the market by do-it-yourself capitalism is. in fact, borne out by the experience of Italian state capitalism. The big nationalised industrial complexes parachuted into the Mezzogiorno are kept going only by massive subsidy. IRI has been opposed to such investment but ordered to continue for political reasons. Few multinationals have gone south. Despite $4.4 billion in aid since the war, only 170.000 jobs have been created in the Mezzogiorno compared to a total loss of over 400,000 jobs in agriculture.
Holland is strangely silent on the current resurgence of regional nationalism. This is because he is a supra-nationalist. In chasing his will o' the wisp. Holland enters down the same road as Allende, He sees leftleaning govermments taking over the mesocconomic sector in alliance with sections of national capital which will act as satellites of the big state industries. He praises the Union of the Left in france, where the Communist Party is already talking about a popular front with the Gaullists against the US multinationals. The result could be a British Chile, with Tony Benn telling his base in the shop stewards movement to hold back the workers lest they frighten their "allies" in the CBI while a Left Labour government is brought to its knces by the CIA and the multinationals.
Here there is a positive lesson to learn from Italy. Holland's scenario leaves the working class in a passive role awaiting the crusading efforts of Lord Ryder's National Enterprise Board. Yet, it was not government pressure which forced fiat to move south. I was a three month long strike in the autumn of 1968 The engincering unions demanded frat expand into the Mezzogiorno. Such action, coordinated on a multinational basis, is what is required to bring the multinationals to leel. The Italian workers have a phrase for state capitalism in the regions. They call it building cathedrals in the desert. It is a fitting epitaph for Holland.
GEORGI: KEREVAN