Ramsay MacDonald: Why was Labour’s first PM later branded a traitor to cause?

He served nine months for his first term as head of a minority government in 1924. His second term lasted longer, from 1929-31, but ended in disaster when financial disaster overwhelmed it amid the Great Depression.

However, he served a third term for four years as head of the so-called National Government, a coalition of all major parties intended to meet the crisis and the slump of the 1930s. In fact it was dominated by the Conservatives, who steadily undermined MacDonald until by 1935 could do little but resign.

He died within months. His reputation mainly survived as a traitor to his original socialist cause. He was largely forgotten after his own time, and his role as the man who introduced Labour to government became overlooked.

MacDonald was born in 1866 in a “but-and-ben” at Lossiemouth.

He was the illegitimate son of Anne Ramsay, a farm servant, and John MacDonald, a Highlander from the Black Isle, who worked as a ploughman on the same farm.

For most of his life, he was known as James Ramsay MacDonald. His upbringing proved to be a sound one for the career he would follow.

With hindsight we can see that MacDonald’s first job as party leader was to create and cement the Labour alliance, then to establish it as the main anti-Conservative Party in the British state, but it was a long job.

By 1906, Labour had gained access to Westminster, and it then steadily extended its independence from the Liberals, too. Coalitions broke up the remaining fragments of the Victorian party system, offering the scope for strategic experiments, and in this way, Labour formed a minority government in 1924 under MacDonald as prime minister.

Defeated at the next General Election, he this time showed Labour could form a steady opposition and returned to office in 1929. The victory proved to be the nemesis of him and his party, however, ending with the formation of the coalition National Government under MacDonald as prime minister leading a Conservative majority.

On the left he was remembered only for his alleged perfidy in 1931. On the right he was barely remembered at all. Although he remained a bogeyman for Labour leftists until well into the 1970s, the next 25 years brought a change of perspective. Labour historians discovered that he had contributed more to the formation and growth of the early Labour Party than a later generation had realised.

At a lunch in the House of Commons in October 1966, commemorating the centenary of MacDonald’s birth, Harold Wilson, the first leader of the Labour Party too young to have played an active part in politics when the National Government was formed, paid him a warm and compassionate tribute.

In 1977, the political historian David Marquand published the first biography of MacDonald based on the politician’s voluminous private papers. The book was self-consciously revisionist in aim and perspective. It stressed MacDonald’s ideological consistency, his political skill and his pivotal role in the growth of the Labour Party and the politics of inter-war Britain.

He was depicted as “a decent and likeable man who, for most of his term of office, led his party with conspicuous skill”. The true moral of his career was not that he had betrayed his convictions, but that he had been too slow to jettison hoary assumptions in the face of changing realities.

There was an irony in that judgment not yet apparent when it first came to light. The revisionism of the 1970s soon needed revising in turn. Implicit in the judgment that MacDonald should have been quicker to jettison his cherished assumptions was another one, equally bound by its own times, that he would have been better to take the advice of John Maynard Keynes in 1931, rather from the Bank of England and the wisdom of pre-Keynesian orthodoxy.

MacDonald obeyed it for what seemed the best reasons to him and simply could not know a revolution in economics was about to overthrow it. A new orthodoxy proved durable and indeed lasted till a second revolution in the 1970s, yet in the end could not overcome the collapse of Keynesianism either.

In the harsher world of the 1980s and 1990s, it was no longer obvious Keynes had been right in 1931 and the bankers wrong. Pre-Keynesian orthodoxy had come in from the cold. Politicians and voters had learned over again that crises of confidence feed on themselves.

MONEY can collapse and public credit may be exhausted. A plummeting currency will be even more painful than deflationary spending cuts. Governments trying to defy the foreign exchange markets are apt to get their fingers burned.

Against that background MacDonald’s response in 1931 increasingly seemed not just honourable and consistent, but right.

The 1980s and 1990s taught more complex lessons as well.

The fluid and schismatic politics of MacDonald’s day could now also be compared with a split in the Labour Party in 1981, the formation of the Social Democratic Party, later the Liberal Democrats, the accompanying upsurge in third-party voting, Neil Kinnock’s revisionism as Labour leader, the emergence of Tony Blair’s New Labour party and the ideological overlap among the anti-Conservative forces.

The stable loyalties and ideological commitments of the post-war period were as much a thing of the past as the Keynesian economics of the same time.

In this climate, MacDonald’s willingness to defy the dictates of party loyalty seemed less a proof of perfidy than a portent of things to come.

On a deeper level, Labour and social democratic parties in every country had learned, often painfully, that the constraints of global capitalism had become much tighter than in the post-war period, and that the scope for reforming improvement had narrowed correspondingly.

These discoveries threw new light, not just on MacDonald’s actions in the supreme crisis of his career but on the cautious and non-sectarian progressivism he had preached since his 20s.

Here, too, he was no longer an honourable but misguided prisoner of outworn orthodoxy, He was the unacknowledged precursor of the Blairs, the Schroders and the Clintons of the 1990s and 2000s.