THE Marxist economist Michael Kidron, who died last week at the age of 72, made an enormous contribution to the Socialist Workers Party's development during the early years of our tradition in the 1950s and 1960s. Born in Cape Town in 1930, Mike emigrated after the Second World War to Palestine, where he became an anti-Zionist socialist. He moved to Britain in the mid-1950s.
Alongside his sister Chanie Rosenberg and her husband Tony Cliff, Mike played a key role in building the Socialist Review Group, a tiny circle of revolutionary socialists from which the SWP eventually developed. He was the founding editor of International Socialism, set up in 1960 and still the party's theoretical journal.
During the 1950s and 1960s anyone who wanted to continue the revolutionary socialist tradition faced two fundamental problems. The first was the identification of socialism with the Stalinist tyrannies in the Soviet Union and Eastern Europe.
Cliff laid the political basis of our tendency when, in the late 1940s, he developed the theory of state capitalism. He showed that Stalinist Russia was a state capitalist society based, just like its Western counterparts, on exploitation and oppression.
Revolutionary socialist politics could therefore only be built effectively on the basis of the slogan 'Neither Washington nor Moscow but International Socialism'.
But this left a second problem. Between 1948 and 1973 Western capitalism enjoyed the longest and most powerful economic boom in the history of the system. Many on the left reacted by effectively abandoning the Marxist tradition and accepting that capitalism could overcome its economic contradictions.
Others, particularly in the Trotskyist movement, simply denied reality. They would claim that capitalism was on the verge of collapse while in countries like Britain living standards were rising and unemployment had virtually disappeared. Mike Kidron solved this conundrum by developing the theory of the permanent arms economy in a series of brilliant articles later turned into two books, Western Capitalism Since the War (1968) and Capitalism and Theory (1974).
Marx had argued that capitalism was liable to an inbuilt tendency for the rate of profit to fall that underlies the chronic crises running through its history. But Mike showed that this tendency could be offset if investment could be diverted to the production of waste - of goods that made no contribution to further production.
The arms industry is a classic case of such waste production. Weapons are of no economic use but simply serve to kill and destroy. The Cold War that developed between East and West in the late 1940s led to levels of arms spending in the two rival blocs that were unprecedented by peacetime standards.
The effect, Mike argued, was to prevent the fall in the rate of profit that Marx had predicted and thereby to stabilise the system. But he also stressed that the boom wouldn't last. Within the Western bloc competition between the hitherto dominant US and the rapidly growing economies of Japan and continental Europe intensified in the 1960s.
Mike predicted that US capitalism would be forced to cut back military spending to increase investment in the civilian industries facing competition from Japanese and European imports. This would undermine the stabilising role of the arms economy, and bring down the rate of profit.
This is exactly what happened in the late 1960s and early 1970s. Growing international economic competition produced a collapse of profitability that ushered in the long period of crisis from which global capitalism has yet to emerge.
Sadly, Mike drifted away from the SWP during the 1970s. Even so, as a young activist, I was electrified whenever I heard him speak. He had the very rare ability to present things in a new and illuminating way.
Personally Mike combined intellectual brilliance with tremendous charm and wit. He also hated jargon. I can still remember him running a blue pencil through a draft passage that I was particularly proud of in one of my first books and telling me, kindly but firmly, 'That's just swank.'
I shall always be grateful to Mike for giving me my first chance as an author while he and his first wife, Nina, ran the left wing publishers Pluto Press. His time at Pluto will probably be best remembered for the hugely influential The State of the World Atlas, which he co-edited with Ronald Segal.
Mike never stopped hating capitalism. A few months ago he returned to the theme of the immense wastefulness of the system in an International Socialism article. To me it felt as if he was coming home.