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Nationalisation is not social ownership


These are not good times. We have an economy with no stability, no guarantees that hard work will provide a consistent living, and a constant possibility of being cast aside simply because we happen to be in the wrong place at the wrong time. And there is little people can do in their personal lives or behavior to change this. Many well-intentioned people say “We must do something. This is something. Therefore, we must do this.” and recommend all manner of reforms and palliatives. The Socialist Party in its stand against such cure-all solutions is accused of standing aloof and doing nothing but abstract talk of a future revolution.

Many have come to identify socialism with state ownership, government intervention, state subsidies and expenditure on ‘public’ services. This has nothing to do with socialism. Support for nationalisation as a "socialist" measure is a short-cut, a short-cut to nowhere. Marx and Engels while in favour of many reforms to the capitalist system, saw the purpose of such reforms as to place the working class in a better position to carry out the revolutionary overthrow of capitalism. It was not because such reforms of themselves were the means to bring socialism into effect.

Today calls on the state to do good are presented as the means to win workers’ votes, which will ultimately lead to socialism, while the goal is considered too advanced to be put forward clearly, put to them as something that they must do and only they can achieve. The avoidance of socialism and its real content today goes under the name of anti-capitalism or under the banner of broad left parties and alliances which hide what its sponsors claim they really stand for. Today some demands for nationalisation and state redistributive policies are designed to manoeuvre workers into a movement for socialism without even mentioning the word never mind misrepresenting its real content! The Trotskyist demands for widespread nationalisation and defence of the welfare state imposes demands on the capitalist state to do things it simply will not and often cannot do.



 Nationalisations of basic and vital industries are a cul de sac that many on the Left have gone down. In the UK we have had nationalisation advocated for decades by the Labour Party and the 57 assorted varieties of Trotskyist such as the SSP and SWP. Certainly, it is not the “production by freely associated men” which genuine socialists desire. Organisations such as the "Socialist" Party of England and Wales call for nationalisation of all the banks run democratically under public control and management. Banks cannot be “socialised.” They are part of capitalism and will end with the coming of Socialism. Under Socialism the functions performed by the banks will not have to be performed at all. The provision of the needs of life will be simplified once the means of production and distribution are made the common property of Society as a whole. At present the workers may not go to work producing and distributing food, clothing, and so on, without obtaining the permission of the owners of the land, factories and railways. Under capitalism we have to enter into a complicated and wasteful system of negotiating wages between workers and employers, negotiating for the purchase of raw materials, and then organising for the sale of the goods, and the allocation of the proceeds as rent, interest, profit and taxes. Underneath it all is the essential feature of capitalism, that the capitalists own the means of production and the goods produced by the workers they employ. The banks exist because of the monetary system by means of which capitalism carries on all these complex relationships between the individual owners of property, between them and the workers, and between both and the State. Money and banks only exist because of the private property system. Socialism will cut out all these intermediate steps. There will be no private ownership and control of the means of production and distribution. Society through its appropriate organisations will handle the much-simplified problem of producing goods in the quantities and in the places required, and of transporting them to the places where they are needed. There will be no wages system, no rent, interest or profit—hence no monetary system—and no banks. That is why Socialists oppose schemes put forward for making privately owned banks into State banks. Socialists want no banks, neither better banks nor Government banks. State banks are compatible with capitalism and may even be better for capitalism's needs than private banks have shown themselves to be. Socialists are right in saying that the way banks are run is a capitalist question, not a workers' question

SPEW (what an apt acronym) demands that the state take the economy and natural resources into democratic public ownership. It wants a government based on working class people that implements "socialist"" policies and puts people before profit. All its proposals involved state action or the need to get the Left into the state and into government. It is no longer possible to claim that these demands are raised in order to expose the State and rid workers of their illusions in it because very few workers actually expect the State to take over the economy and run it for the benefit of working people. The illusions peddled are those of the Left itself, for what is presented is the ideal objective which they aim for and which workers are called upon to endorse. The problem is that the means – capitalist state ownership – is supposed to lead to an end that is not capitalist state ownership! There exists a  danger that lurks in concealing the true and final aim of the movement from others (and often even from ones own party members and supporters.) Eduard Bernstein penned a critique of this sort of approach while still Engels personal secretary

“If the masses could not yet be interested in the actual end of the movement, the movement itself was premature and then, even were the means attained, they would not lead to the desired end. In the hands of a body of working-men not yet able to understand their historical mission, universal suffrage might do more harm than good, and productive co-operative societies – with State-credit could only benefit the existing powers of the State, and provide it with a praetorian guard. But if the body of working-men was sufficiently developed to understand the end of the movement, then this should have been openly declared. It need not have even then been represented as an immediate aim, to be realised there and then. Not only the leaders, however, but every one of the followers that were led ought to have known what was the end these means were to attain, and that they were only means to that end.”


To adapt a metaphor by Marx that "Force is the midwife of old society in child-birth with a new society’"  nationalisation under workers control in the name of socialism would be like performing a Caesarian section to deliver a 16-week-old fetus: it simply would not survive.

Nationalisation has been  described as the means that were to serve the final end – i.e., the realisation of a socialist society – all the chief essentials of that aim were already contained within it; the means  imbued with the very nature of the end, planned production and even workers control. Now, certainly, nationalisation in a small way is, of course, a partial realisation of the socialist principle. But as so long as they did not embrace the whole of that industry world-wide, they would, therefore, have to compete with rival enterprises of the same kind , and would thus be forced to submit to the conditions of such competition. The inevitable consequence of this must be that, within the state-owned industries themselves, differences of interest would arise as each industry tries to force up its profits as high as possible, even though it were at the expense of its employees. With or without State ownership capitalist companies remain in essence private concerns. They were subject to the compulsory laws of competition.

Engels wrote critically of nationalisation.

"If the Belgian State, for quite ordinary political and financial reasons, itself constructed its chief railway lines; if Bismarck, not under any economic compulsion, took over for the State the chief Prussian lines, simply to be the better able to have them in hand in case of war, to bring up the railway employees as voting cattle for the Government, and especially to create for himself a new source of income independent of parliamentary votes — this was, in no sense, a socialistic measure, directly or indirectly, consciously or unconsciously. Otherwise, the Royal Maritime Company, the Royal porcelain manufacture, and even the regimental tailor of the army would also be socialistic institutions"


“But, the transformation — either into joint-stock companies and trusts, or into State-ownership — does not do away with the capitalistic nature of the productive forces."

“It is a purely self-serving falsification by the Manchesterite [laissez-faire] bourgeoisie to label every intervention into free competition as `socialism’: protective tariffs, guilds, tobacco monopoly, statification of branches of industry,…, royal porcelain factory. We should criticize this, not believe it. If we do the latter and base a theoretical argument on it, then it will collapse along with its premises”


 Every society admits of certain improvements called reforms. These reforms are either required by the interest of the whole ruling class, or they are only for the benefit of a particular faction within it. In the former case they are carried without much agitation; in the latter, that fraction for whose benefit they are to be carried, call themselves reformers; these form a distinct party, and appeal to the oppressed to aid them in their endeavours.

The reformers, at such times, point at the imminent danger that would arise from further resistance; thus they frighten the conservative fraction to surrender. Whenever such a reform is carried, peace is restored, the machinery of the state gets again in motion, and all seems well. This restoration of peace, however, is of short duration. Hostilities are not abolished, they are only suspended, and soon re-commence. The most progressive fraction of the ruling class is again compelled to propose reforms, which are the more extensive and energetic, as the time of dissolution is drawing nearer. These reformers generally pretend that a real radical reform would set all things right, and prevent further disturbances and agitation. Of course these reforms are all to be carried by "legal and constitutional means!" But however extensive and radical these reforms may be, they alter nothing in the fundamental system of an existing state of things. They only remove grievances that are currently impediments to society.

 Reformers are neither our allies, nor our friends, only our foes. If we co-operate with them, we give all command of the course to be pursued, into their hands, we submit to their dictatorship, and whenever they chose to stop short we must stop too. As friends or allies we can only form the tail of a deceitful and treacherous head, and whenever this head choses to stop it must put the tail into confusion, and when the field would be ready for us, we should find ourselves disorganised. If the workers have a demand of their own for their own particular class-interest, and are sufficiently organized to agitate for it, these bit by bit reforms become in reality conservative measures, since the implementation of them deprives the workers' party of the chance to animate the public who are generally indifferent to political matters as long as they have got a few scraps from the table.

Lord Palmerston said of the Reform of 1860 would bring about in regard to the House of Commons. ‘I dare say, the actors will be the same, but they will play to the galleries instead of to the boxes.’ So far, history has not disproved his fears. Today the member of Parliament plays for an audience, the majority of which in most cases are workers, and he plays accordingly. There are very few of them who have not taken up at least one question of real or fancied interest to the workers as their speciality, from the legal eight-hours day to ‘Britain for the British’. Any question which a large section of the workers have at heart is sure to find a great number of advocates in the ranks of the legislators. Is it, therefore, declared as wonderful that the wages-slave, the creator of commodities, should be a little more at ease. It is asserted, in the face of numerous exposures of misery, wretchedness, and oppression, that the working classes are really well off — better than at any former period. To demonstrate this blessed state of felicity, the reformers have recourse to the returns of pauperism, the cheapness of food, etc., but they take good care never to mention the actual amount of wages received by the workman. It is a fact, generally understood, that the wants of the working-man too, vary with the degree of civilisation under which he exists. The standard of well-being is therefore relative. Well-being, in a civilised state of society, does not consist in the actual amount of commodities which an individual does consume, and command: it consists in the relative amount, that is—how far he partakes of the annual produce of the land and labour of his country, in the proportion of his share to the gross revenue of the society of which he is a member. The upholders of the present system ignore this, and take a positive standard. Anything above starvation level to the sons of toil they consider well-being. A working-man's condition may, according to their doctrine, be positively better than at any former period; while, at the same time, his relative position is worse than ever—so that he is really cheated.

One day in 1848, as the story goes, Baron Rothschild took a walk on the Common of Frankfort-on-the-Main. Two labourers met him and accosted him thus: “Baron, you are a rich man; we want to divide with you.” Baron Rothschild, not the least puzzled, took out his purse good-humouredly and answered: “Certainly! We can do that business on the spot. The account is easily made. I own 40 millions of florins; there are 40 millions of Germans. Consequently each German has to receive one florin; here is your share;” and giving one florin to each of the labourers, who looked at their money quite confused, he walked off smiling. Socialists do not intend to introduce division of wealth; on the contrary, we are for abolishing its division.

Marx’s social theory is based on what he has called historic materialism. According to it the ultimate forces in the evolution of social life, the ultimate causes that determine the evolution of morals are of an economic nature; they are to be found in the changes of the modes of production of the necessaries of life. To a given mode of production and exchange of the necessaries of life, correspond certain forms of social institutions and moral conceptions, and they will prevail as long as the former continues to exist, though not always in their purity or in absolute sway, as they have to contend with remainders of former institutions and the germs of a slowly evolving new mode of life, factors which call forth a certain variety such as everywhere we observe in nature. But in every period of history we can easily distinguish a prevailing mode of production and exchange, and a corresponding conception of life, and of duties and rights, which also prevail and determine the nature of the social and political institutions of the period. This is quite obvious in the earlier stages of social life. But the more complex society becomes, the more will the objective causes of social evolution recede into the background, and subjective ones appear to determine its course. But, powerful as the subjective factor is in history, it is still under the control of the working of the economic foundations of social life. We have seen progressive movements, upheld by most energetic men, entirely collapse for no other reason than because they anticipated a state of social evolution which had not yet set in. On the other hand, wherever the industrial development has reached certain points, it has called forth social movements which, if different in garb, according to special geographical conditions, are in substance alike in all countries.

So much for the objective side of social evolution. The main subjective lever of it is, as long as society is divided into classes, the class antagonism or class war.

 ‘The process of revolution’, writes Marx, in the preface to Das Kapital, ‘will take more brutal or more human forms, according to the degree of development of the workers.’

 There are different forms of warfare. It works today more as a potential than as an active force, more by the knowledge of what it might be than by actual manifestation. Politically as well as economically it is fought by sections or divisions, and often in forms which are the reverse of what they ought to be according to the letter, so that it might appear as if it were not the social classes that contest with one another the control of legislation, but rather the legislators that fight for the satisfaction of the classes. But the class struggle is no less a reality because it has taken the shape of continuous barter and compromise.

To Marx, evolution included revolution and vice versa; the one was a stage of the other. Not every revolution must be violent or sanguinary. But, besides those brought about by industrial changes alone, we have those phases of social evolution, which take the shape of, or are brought about by, political revolutions. They, too, have their drawbacks, undoubtedly, but they have also their advantages – they clear away in a day the dust and the rubbish that else would take generations to remove – they are, in the words of Marx, the locomotives of history. They are also mostly attended by a great intellectual impulse. Thousands of slumbering intellects are stimulated, wits are sharpened, ranges of sight widened. And when it so comes to violent struggle, then, of course, might is right. That does not mean to say that might was always ‘justice’ For socialists our objective is the unity of the working class across nations. If it is not united, by definition it cannot act on behalf of its interests as a whole. Nationalist divisions frequently prevent this unity. 

Under Capitalism, relations between human beings within production necessarily present themselves as relations between things (money and commodities). “Only the conventions of everyday life,” Marx writes in Contribution, “make it appear commonplace and ordinary that social relations of production should assume the shape of things, so that the relations into which people enter in the course of their work appear as relations of things to one and another and of things to people.” People are so used to the relations of commodity production that they find it difficult to imagine social relations of production that are not mediated by the exchange of commodities and money, which is one reason that reformist ideas manage to seem so pragmatic. Reformists have trouble understanding that commodities and money only exist under specific relations of production, and this also accounts for their inability to imagine fundamentally different social relations where there is no need or room for those economic forms to exist. Capitalism is not just a particular form of property holding, but is essentially an impersonal economic mechanism; impersonal in the sense that it is a mechanism that operates independently of the will of people and imposes itself on them as an external force. State capitalism and private capitalism have never existed as pure forms of society; every country has its own historically developed mix. But the main features of a model of state capitalism, drawn from historical examples, are as follows:
1. State ownership of the principal means of production
2. Generalised wage labour
3. Generalised use of money and money calculation
4. A relatively free market for consumer goods in the form of agricultural products and light industrial products
5. A market for means of production which is closely monitored by the state
6. Wide-scale planning activity, allocating supplies and directing products within the sphere of heavy industry, setting production targets, fixing prices and directing the flows of capital

Nationalisation is the wages system under new management. Nationalisation is state capitalism and does not differ from private capitalism as far as the exploitation of the workers is concerned. They still need their trade unions, and the strike weapon, to protect themselves from their employers. It is not socialism, nor is it a step towards socialism.


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