Pamper the rich – Punish the poor

Since the beginning of the 20^th century the state has had to intervene in British industry, either to provide large amounts of capital which could not be raised privately or because there was a strategic advantage in the state controlling a particular industry. Now a policy has arisen in which the state does NOT bailout an industry by nationalization but merely provides the funds for continued investment. It is a programme to rescue capitalism from crisis. The reformists, Old Labour and Trotskyists are unclear and muddled about the nature of socialism, of capitalism, the nature of the state and the class character of political parties. Thus the equation of nationalisation with socialism, the description of the Labour Party as a working class party and the demands for nationalisation as a means of making inroads into the capitalist state.

The vast majority of British industry is corporately owned; by banks, by finance companies, or by the STATE. These are all forms of capitalism in which capitalist property relationships remain intact. Surplus-value is still appropriated and production is governed through the market by the operation of the law of value and commodity exchange. These laws operate whether private companies or the state control production. The essence of capitalism is property relationships; ownership is merely a formal question, which can take MANY forms. To portray nationalisation as a means of making inroads into the capitalist system is to ignore the central role of the capitalist state. Hence nationalisation can never be a means of making ’inroads’ into capitalism. To argue so is to deny the fundamental teachings of Marxism. For all these reasons there is no advantage, either strategic or tactical, in calling for the nationalisation of private industry. It is irrelevant to the real interests of the working people whether profits are in private or state hands.

A major battle for the Socialist Party has always been to combat the fight for reformism and gradualism which diverts the fight for socialism. Throughout our history we have opposed all the various ‘hangers-on’ to the labour movement who have sought state-ownership. An important part of the Socialist Party’s work has been exposing the socialist pretensions of the Labour Party, the ‘Communist Party’ and in opposing the false strategies of their Trotskyist offspring who demand that they nationalise industries. The Labour ‘left-wing’ and the Left demand nationalisation as a means of making inroads into the capitalist system – as a form of creeping socialism. SWP and SPEW say that they are making ‘transitional’ demands but in essence their strategy is reformist. They claim that slogans for nationalisation under workers control raise the question of state power and heighten the consciousness of the workers. Tagging on the phrase  ‘workers’ control’ is merely lipstick on Frankenstein’s monster.  Objectively all these organisations are serving the capitalists in that they are attempting to mobilise the working class in order to bring about the expansion of state-monopoly capitalism to rescue bankrupt private industries and enterprises. Nationalisation is always conditional on improving ‘efficiency’ and ‘rationalisation’. Nationalisation cannot stem the tide of redundancies and indeed may accelerate it. The call for nationalisation as a means of saving jobs is an aspect of the general reformist outlook of the Left. Nationalisation not had a demonstrable record of consistently improving wages, jobs, rights and safety. Instead of begging the ruling class to save their jobs the working class urgently needs to develop a consciousness of its latent strength. The strength of the working class lies in their labour and their relationship to the means of production – let us help them to learn to use it! We must always always remember that that the state intervenes in the economy only for the benefit of the capitalist class as a whole and not for the benefit of the workers. The entire class character of nationalisation means that they exploit the labour of the worker. Socialism is not nationalization. State-owned companies have played  a central role in exploiting the working class in every single country, regardless of their rhetoric about socialism, workers’ power etc

Privatisation – the transfer of functions and industry to the private sector – is widely and correctly rejected on the Left and in the working class. Privatisation leads only to higher prices, less and worse jobs, and worse services. Privatisation and nationalisation have failed the working class. Nationalisation and privatisation are just two different ways that the ruling class runs society; they are not means through which the working class can run society. Both are undemocratic, run top-down by and for the rich and powerful. The government bureaucracy and ministerial managers are part of the ruling class, along with the private capitalists. As we have already stated, the working class is exploited in the so-called public sector, just as in private, through wage labour, and lacks any real control over these means of production. The work process is authoritarian, run top-down by officialdom, and, just as in the private sector, unpaid surplus value is accumulated and reinvested. A “mixed economy” is merely a mixture of top-down state and top-down private ownership: the main form being the Keynesian Welfare State

Faced with the evils of capitalism, radicals are looking for alternatives which do not require the state ownership and bureaucratic planning of the failed “communist” (state capitalist) economies. Now another idea with its roots in the 19^th century has become prominent once again as a supposed remedy – Co-operatives (or as some of their modern proponents prefer to call them, Worker Self-Directed Enterprises or a Pluralist Commonwealth. It might be called decentralized ‘market socialism’. Worker-managed enterprises, consumer coops, very small businesses and shops, family farms, etc., would compete in the marketplace. Disappointingly they too fail to fulfil the promise.

Enterprises such as workers cooperatives are unable to mount a strong enough challenge to the capitalists.  As Rosa Luxemburg stated, workers forming a cooperative are under pressure from competition in the market and must rule over “themselves with the utmost absolutism” forcing them to either “become pure capitalist enterprises,” or dissolve if they hold on to their principles.

The Mondragon cooperative federation in Spain is exemplary.  Because of its success, in the mid-1990s Mondragon began to come into competition with multinational corporations.  In order to survive the competition the cooperative federation began to change its policies.  It started opening factories in low wage countries like Poland, Egypt, Morocco and Mexico.  None of the employees in these factories are cooperative members and have little say in the operation of their workplaces.  Furthermore, cooperatives could now apply to hire up to 40% non-member employees in order to remain competitive.  At the time these changes led one cooperative member to lament that Mondragon could not “flourish as a cooperative island in a capitalist world.”

Many say that factories and the means of production in general should be controlled by independent groups of workers. But it has been pointed out if production is controlled at the factory level, you can't have society-wide socialist planning—and in fact you have individual factories interacting with each other through the market, reproducing capitalism. If you have worker co-ops or autonomous factories, you begin to have something that resembles separate commodity-producing units. You won't have society-wide mechanisms to foster cooperation between enterprises. If you fall back on market principles, you begin to have competing interests over resources and sales. You begin to have a situation in which stronger enterprises pull ahead of weaker enterprises. It is impossible for society to pull in a unified direction—towards meeting larger social goals and with the needs of world humanity in mind. The workers of any one enterprise could choose how to respond to the climate of economic conditions and how to weather it but could not control the movements of the economy itself. There would be business cycles, including periodic recessions. Some self-managed businesses would do better than others; some regions would do better than others; there would be inequalities within enterprises as well as between them; there would be overproduction, unemployment, areas of relative poverty, and various amounts of resentment.

Complete local self-reliance is neither possible nor desirable, but there could be an emphasis on as much local autonomy as possible – for municipalities, communes, cities and regions. The more localized the community, the easier it will be for people to democratically plan its overall economy. Like small shop-keepers and artisans of the medieval guilds, the workers would be capitalists to themselves, “exploiting” themselves for the sake of the enterprise. So long as self-directed enterprises still exist in a mainly capitalist economy, then they have to compete on the market, like it or not.

This is not “socialism” as meant by the historical mainstream of the socialist movement. Historically, most socialists did not include the market (with money, commodity exchange, and the law of value) as part of their goal. At most that was seen as a remnant of capitalism in a post-revolutionary society. As scarcity was overcome, the market (commodity exchange) would die out and be replaced by conscious planning. Thinkers such as Wolff and Alperovitz make the strategic claim that cooperative worker-run businesses could be so successful that they can spread until they dominate the economy and wipe out capitalism. A popular idea among many ‘anti-capitalists’ among others. It is a delusion. It ignores the reality that the capitalist class controls the marketplace as well as the government at all levels. The ruling class will let people form a relatively small number of cooperatives, mostly at the margins of the economy. They will not let cooperatives “supplant” the corporate steel industry, auto industry, oil industry, and the giant banks. In the unlikely event that the co-ops could accumulate enough capital to threaten to “supplant” these semi-monopolies, the capitalists would cancel bank and government credit, forbid the use of transportation and communication by the co-ops, and pass laws against the cooperators. The courts and police would enforce these laws. Those who advocate cooperatives are sincere in wanting a wholly new society but they wish to get there by step-by-step, gradual, mostly peaceful and legal methods, without ever expecting a direct conflict with the capitalists and their state. Which is what defines these strategies as reformist – and as unrealistic. Some advocates are like millennialists awaiting the second-coming, hoping that a severe economic crisis perhaps sparked by environmental disasters will offer an opportunity to institute the changes out of necessity. If such a policy is adopted it condemns the socialist movement to one of passivity and not a political movement which will consciously expropriate the capitalist class. Working people will decide to cease to labour for masters.

The Socialist Party view is that we have to keep raising the issue of a genuine alternative society (without wages, money, finance, value, etc) to capitalism as the way-out for the working class and not get bogged down in defensive struggles to survive under capitalism or imagine that these by themselves will lead to an understanding of the need for an alternative society.