Nationalization or Socialism?

What is to be done?, Chapter X, of the SPGB pamphlet Nationalisation or Socialism? (1945.)

Throughout this pamphlet the point has been repeatedly stressed that the problem facing the capitalist class is that of the form under which their industry shall be controlled ; while for the working class the vital problem is that of ownership. Capitalism has evolved from small scale private, competitive, industry under the personal control of the proprietor, through the form of joint stock companies, to the present stage in which great combines, cartels and so on, with the elimination of competition within the group, more and more dominate the scene ; though rivalry between the combines and internationally between the different capitalist powers and groups of powers is as fierce as ever.


What is to be the next step? For the capitalists it is a problem of finding a method, either by nationalisation or more probably by public utility corporations or State regulated private-monopolies, by which capitalism itself shall be able to control those monstrous growths of its own creation - always of course with the idea of preserving capitalism and their own property and privileged position as an exploiting class.


This evolution of capitalism has revealed for all to see the fundamental error of the reformist parties which turned aside from the working class problem of ownership to busy themselves with the problem of control, only to find that capitalism had moved on and made their schemes obsolete. In earlier days the reformist parties thought that there was in progress a natural evolution towards the capitalist State completely taking over and operating one industry after another until it covered the whole field. The late J. Keir Hardie had this belief in an inevitable evolution to Socialism.


In his From Serfdom to Socialism (1907) he argued on these lines : -

'If the State can build battleships and make swords, why not also trading ships and ploughshares? Since the State conveys letters and parcels and telegrams, why not also coal and wool and grain? And if the State insists upon owning telegraph lines, why not also railway lines? And if the railways, why not the coal mines from whence the power is drawn which sets the engines in motion? . . . When the State enters upon business in any department there is no logical halting place short of complete State Socialism, and the further extension of its trading activities is purely a question of utility.' (p. 89).

Keir Hardie was wrong in using the term 'State Socialism' and in believing that there was an inevitability about this progress towards complete State industry, yet at least he did recognise that even if it happened it was not an end in itself, but could only be useful because it would, he thought, 'prepare the way for free Communism in which the rule, not merely the law of the State, but the rule of life will be : From each according to his ability, to each according to his needs.'


When, later on, it was discovered that capitalism was not following the lines Keir Hardie and his fellow members of the Labour Party anticipated, and they realised that State industries like the Post Office were not even particularly acceptable to working class voters who were influenced by capitalist propaganda against alleged red tape, bureaucracy, and inefficiency, the Labour Party quietly dropped its old propaganda for outright State acquisition of industry. In its place that Party began to advocate public utility corporations, and, as has been mentioned before, Mr. Herbert Morrison, who in 1923 denounced that form of organisation (as exemplified in the Port of London Authority) as a 'capitalistic soviet' was himself responsible for initiating the London Passenger Transport Board when he was Minister of Transport in the Labour Government, 1929-1931; and Labour Party spokesmen began to put forward the idea that these public utility corporations were the 'latest development in Socialist theory' (Mr. Lees Smith, Spectator, 26 December, 1931), and some of them were even prepared with Mr. Lees Smith to contemplate denationalising the telephones and telegraphs to the extent of handing them over to a public utility corporation.


Far from calling the L.P.T.B. a 'capitalist soviet', as he had called the model from which it was copied, Mr. Morrison declared in an article in the Evening Standard (15 November, 1933), that it was 'socialisation'. 'Socialism has come', he wrote.


Thus the Labour Party has changed its line and is walking in step with capitalist interests such as those whose spokesman is the Times. 'It is a sound principle that, whenever competition is ousted by monopoly, the monopoly must come under Government control - though certainly not under Government management - either through a public utility corporation or by other means appropriate to the differing circumstances of different businesses' (Times Editorial, 19 September, 1942).


Now the Labour Party's rejection of its own earlier views has gone a stage further and Mr. Morrison has, during the past year or two, elaborated the idea that there is not one solution but several solutions, which he described at Leeds on 3 April, 1943, as 'a practical mixture of genuine Socialism and genuine free enterprise' (Manchester Guardian, 5 April, 1943).


One group of monopolies', he said, 'are the so-called "natural" monopolies like gas, electricity and (in effect) transport, which are also, like coal, common service industries and, like it, are ripe - or over-ripe - for public ownership and management. Another group consists of fully fledged trusts, of most of which the same thing might be said.'


Then he referred to the 'great assortment of cartels, price rings, federations, price-fixing combines, and so forth.' These, he said, are not necessarily 'in an appropriate state for full public ownership in the early post-war period' ; and for them Mr. Morrison proposed that they be subjected to 'stimulating public control'.


Under the guidance of State officers these monopolies 'can be made true servants of the public need, true factors in an expanding prosperity.'


The keynote of the speech was Mr. Morrison's statement that 'neither the slogan of all-round nationalisation nor the slogan of all-round decontrol . . . are, as such, the slightest use to the country'; and he mentioned in the course of his remarks that 'a case can be made for private enterprise in appropriate fields.'


A later speech by Mr. Morrison was summarised as follows in a Times Editorial: - 'It is Mr. Morrison's contention that the great combinations controlling key economic positions must be controlled by the State, if only because they will otherwise themselves be in a position to control the whole life of the community. But he recognises that there are wide areas of enterprise which will fall outside this control - notably the small manufacturer and still more the small retail distributor' (Times, 1 November, 1943).


Again, on 4 March, 1944, Mr. Morrison, in a speech at Mexborough, said : -

'For some time to come we shall in Britain be working out a form of partnership between the State and large-scale industry. We shall be experimenting with the different types and degrees of State power over industry, varying all the way from full public ownership and operation to a limited degree of control of prices and practices exercised from outside. How this experiment will work out, how far the factor of private initiative may prove itself able to survive and may justify itself in terms of the public interest, I would not like to say' (Times, 6 March, 1944).

How far some of the Labour leaders have departed from their earlier attitude may be seen by comparing Mr. Morrisons' present acceptance of monopoly with the Labour Party's vociferous opposition to monopoly after the last world war. A typical declaration was made by Mr. J.R. Clynes, then a prominent Trade Union and Labour Party leader, that it was better to have a large number of small capitalists than a small number of large ones. (Preface to a pamphlet, The Failure of Karl Marx.)


On the other hand, while the Labour Party in 1918 feared that the 'Monopolist Trusts . . . may presently become as ruthless in their extortion as the worst American examples' (Labour and the New Social Order, 1918, p. 18), and in 1922 criticised the National Government for having done nothing 'to prevent the harmful results of the accumulation of capital and control of prices and production by groups of private capitalists' (Labour Speakers' Handbook, 1922, p. 36), the minority members of the Committee on Trusts, 1919, including Mr. R. Bevin and Sidney Webb, stated that they did not wish to prevent the formation of combinations and associations because of the greater efficiency they ensure. Instead they urged that dangerous monopolies should be handed over by the Government to the Co-operative Movement or Local authorities, or placed under State control but not necessarily State management.


Yet another straw in the wind is a speech by Mr. Shinwell, Labour M.P., in the House of Commons on 5 May, 1944. He said :-

If anybody expects me to make a plea for the nationalisation of shipping at the end of the war they will be disappointed. Not even to satisfy ideologists on my own side am I going to do that. You can nationalise the railways and do much to co-ordinate rail and road transport, but when it comes to shipping I want to see a scheme properly worked out and practicable before I attach my signature to it . . . you could take over liner services and makes them into a publicly-owned system through a public utility corporation . . . I do not want anything in the nature of a bureaucracy in the shipping industry or even the beneficial assistance of civil servants, admirable as they are in their own sphere. Nor should the large capitalists have it all their own way' (House of Commons Report, 5 May, 1944, col. 1645).

He also remarked that the Ministry of War Transport 'are the last people in the world who should be allowed to operate the shipping industry.'


In contrast to this the Labour Party 25 years ago used to hold up the Post Office administered by a Government Department and by civil servants as a model to be followed elsewhere. The Labour Party's programme of Reconstruction after the war 1914-1918, called Labour and the New Social Order, was not only demanding 'immediate nationalisation' of Railways, Mines, the Insurance Companies, and the production of Electricity, and nationalisation 'as suitable opportunities occur' of 'the great lines of steamers', but also specifically sought 'national administration', and said nothing then of not wanting industries to be administered by Government departments. In the case of Insurance the programme asked that the companies be expropriated and demanded 'the assumption by a State department of the whole business of Industrial Life Assurance'. As regards the nationalisation of the liner companies the only
qualification was that they should perhaps not be 'immediately
directly managed in detail by the Government.' (Our italics).


What has the Socialist to say of all this? It is to warn the working class that 'the more capitalism changes the more it is the same thing.' All of these never-ending experiments in the control of capitalism leave untouched the working class problem of effecting a change of ownership, from private ownership to real ownership by the community and democratic control by the community. From a working class point of view we deny Mr. Morrison's statement that 'the increasing domination of British industry and business by a system of private regulation on monopoly lines was the most important of all subjects that faced us in the field of economic policy after the war' (Times, 6 March, 1944).


The problem facing the working class now, as it was 20 or 50 years ago, is the fact that the capitalist class are the private owners of the means of production and distribution. No amount of State capitalist enterprise or State regulation of monopolies will alter this. What the working class need to concern themselves with is the problem of ownership, the fact (to quote the Economist, 25 December, 1943), that 'as a rough estimate . . . it can be said that 1,800,000 persons, who are 7 per cent of the adult persons in this country, own 85 per cent of the private property and draw 28 per cent of the individual incomes of the country.'


The Socialist solution is to abolish capitalism and establish a system of society in which the means of production and distribution are owned and democratically controlled by the community, in which there will be no exploitation, no property incomes in the form of rent, profit or interest ; and no wages system.


The problem of society organised on a Socialist basis will be the straightforward economic problem of securing the co-operation of all in the production of the articles and the operation of the services needed by all the members of society. Goods will not be produced for sale and profit-making, or to provide incomes for investors in company shares or in Government securities, etc., but solely for use. Men and women will no longer work under the goad of starvation but because they will realise that at last the interest of the individual is the interest of the whole community and the interest of the whole community also that of the individual.


To those who have imbibed capitalist teaching that men and women only work when driven to it by starvation and under the threat of losing their job and their livelihood, this is indeed a revolutionary idea; but it is time the working class realised their own capacity, intelligence and potentialities. There is nothing fantastic in holding that the world has now attained the capacity easily to provide an abundant and varied life for all. It is for the working class to realise the mission history has allotted to them, that of ending class-divided society for ever, and to strive for the achievement of Socialism under which the principle shall be 'From each according to his ability : to each according to his need.'


The Socialist Party of Great Britain and its companion parties in Australia, Canada, New Zealand and U.S.A. show the road to the achievement of Socialism by international working class action, through the democratic conquest of political power.