NATIONALISATION. It’s the Labour policy the Tories have always hated. And it’s back in the news. Newly elected Labour leader Jeremy Corbyn has made it a cornerstone of his new package of leftwing policies. In a popular move he has called for the renationalisation of the railways. He wants to take gas, water and electricity back into public hands. And in one of his boldest appeals, he wants to create a National Education Service, extending the achievement of the 1945 Labour government that set up the NHS.
With the British steel industry facing destruction by market forces and the Tories sitting on their hands, Jeremy Corbyn has rightly suggested nationalisation as a possible solution.
Socialists believe that nationalisation of the top companies and key industries is crucial if we are to replace the market and introduce a democratically planned economy.
We oppose compensation payments to the former owners who have already made millions by exploiting public assets for private gain.
Old style nationalised industries got a bad reputation; they were run by bureaucrats and did not meet the needs of ordinary users.
Socialist policy, by contrast, says nationalised industries should be run their workers. Management boards should be elected from the workplace with representatives from ordinary consumers and users. Only then can they really serve the people.
From 1918 to 1995, Clause IV of the Labour Party’s constitution committed the Party to nationalisation, calling for “the common ownership of the means of production, distribution and exchange”.
Despite those famous words Labour never actually tried to take over the commanding heights of the economy – the most profitable sectors of industry and finance – let alone create a planned economy in place of a capitalist system.
When Labour nationalised the mines, and when the Tories nationalised Rolls-Royce, it was mainly to stop them collapsing or to fund modernisation that private owners wouldn’t pay for. Labour leaders like Clement Attlee and Harold Wilson never viewed nationalisation as a step towards socialism. All the former owners were compensated with government bonds, drawing a generous income for decades after.
These industries and services remained locked into the capitalist system, producing blind for a market. The system of management – and often the managers – remained exactly the same. So these enterprises remained capitalist, but they were now the property of a capitalist state, not individual capitalists.
Nevertheless, for socialists even this limited form of nationalisation was a step forward. The government was now responsible for jobs and wages, which meant these companies were answerable to political pressures in parliament or through the ballot box, not just the private whim of the shareholders.
This made the struggle over jobs, wages and services more obviously political, drawing workers into the debate about how to fund the services and what they were really for. The capitalists hated nationalisation for just these reasons.
Labour should oppose all privatisation. At the same time we should fight for workers’ control of all state-owned enterprises. The workers should be allowed to inspect their books, find out what the money’s really being spent on and challenge management decisions and priorities.
As for compensation, apart from it being unfair in principle to give privateers even more public money, there is another crucial objection. It would be incredibly expensive.
There is no way that the entire economy could be nationalised with compensation at market values. The big four retailers, Tesco, Asda, Sainsbury and Morrison’s, control 72 per cent of all grocery sales between them. Unilever has a turnover of £41.8 billion. Barclays, HSBC and Lloyds have a combined market value of about £200 billion.
The socialist objective is to create a democratically planned economy. From that perspective the idea of buying out the tiny handful of individual capitalists who own today’s economy is unjust and unnecessary. It also happens to be impossible.
One objection we sometimes hear is that nationalisation of big companies would harm workers’ pensions. This is because our pension funds own shares in big businesses whose value would go down if they were taken over by the state. Or so the story goes.
In fact the giant pension funds are themselves an ideal target for nationalisation. The well-paid elite of professional fund managers play the markets with our money as if they owned our pensions. So why not nationalise and combine the funds. That way the state could guarantee the value of all our pensions, wiping out the fear that accompanies the retirement plans of millions.
Some say that the sheer size of the industrial, retail and banking monopolies, each with their own complex hi-tech planning, makes taking them into social ownership too difficult. But in fact wholesale nationalisation will be a far simpler task than it was 50 or 100 years ago. This is because the dog eat dog competition endemic to capitalism has created fewer and fewer monopolies. They might be bigger but there are fewer of them and they already possess the data, systems, logistics and planning needed to organise production and distribution on a vast scale. They just need to be in the right hands.
The great socialist thinker Karl Marx noticed this trend nearly 150 years ago. In his masterwork Capital he said “Centralisation of the means of production and socialisation of labour at last reach a point where they become incompatible with their capitalist integument [outer shell]. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.”
The trend under capitalism points the way to the socialist future. It is for the labour movement to make it happen.
When the Tories and the bosses blame market forces for disasters like the collapse of the steel industry, Labour does not need to accept their rotten logic. Nationalisation of all firms or industries declaring redundancies or closures, under workers’ control and with no compensation, is a realistic and progressive alternative. Above all, a network of nationalised industries could be integrated into an overarching economic plan, producing for need not greed. By nationalising the banks we could create a national investment bank under the direct democratic control of the working class majority. Investment could be directed to create useful, sustainable jobs for all.
Even with a huge majority, a Labour government would meet powerful resistance from the unelected parts of the British state.
So to create a planned economy the next Labour government will need to break with the capitalists altogether and form a workers’ government. It will take a revolution to “expropriate the expropriators”.
