DAVID LIPSEY
131
Labor Party has in its makeup an emotional commitment, based on
the fact that it was not just a party but also a "movement," a "new
Jerusalem." Secondly, the party had built in an element of institu–
tional tolerance. In theory, sovereignty lay in the hands of the par–
ty's conference, the local activists and trade union worthies who
meet annually at some seaside town. But in practice, the party's
MPs, the Parliamentary Labor Party, had managed to maintain a
considerable amount of autonomy from the conference. And, on the
whole, it was in the interests of the unions to sustain that autonomy,
since they could make their deals more easily-and necessarily–
with the Parliamentary Party.
Through the 1960s and 1970s, thus, a strange dialectic per–
sisted-between most outsiders, who thought that the incompatibili–
ties within the Labor Party meant that it must split, and most insid–
ers, who believed somehow that it never would.
The crisis of 1979 changed all that. With hindsight, it had been
building up through the period in office of the Wilson and Callaghan
governments. The Labor governments, like most Western intellectu–
als, were moving away from the Keynesian postwar consensus and
toward monetarism, curbs on public spending, and, most of all, lim–
iting the bargaining power of the trade unions as a means of dealing
with inflation. The Labor Party, however, became yet more con–
vinced of the ideas it had refused to drop at the time when their rele–
vance seemed least-a belief in fundamentalist socialist solutions to
the "development crisis of capitalism," and an impatience to see
them made real.
What made the split actual this time was that the unions
changed sides. In practice they had generally backed the pragma–
tists . But in the winter of 1979, Prime Minister Callaghan tried to
impose a five-percent wage ceiling, which meant a substantial fall in
union members' real incomes. Some union leaders could see the
economic logic of the proposal. But equally, all could see a contrary
organizational logic, one that threatened their very
raison d'etre.
An
incomes policy was to replace bargaining as the centerpiece of the
wage-fixing system; if so, why then would anyone want to be in a
trade union? The result was a series of damaging strikes, particu–
larly in the public sector. Of critical importance was the action of the
health and local government workers, culminating when Liverpool
workers actually refused to carry out burials.
