Manchester Solidarity Federation

The Dead End of Nationalisation: how state ownership of industry does not, never has, and never will serve working class interests

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This post originally featured in Direct Action #46 Spring 2009

For over a century now all sorts of social democrats, Stalinists and Trotskyists have espoused the view that the state can be used to bring about a communist society through reforms and/or seizing the state on behalf of the workers. This has often been dubbed by libertarian communists as “state socialism”. One of the staple demands of this statist strategy is the nationalisation of banks and other industries, bringing them under the direction of the state. This is usually disguised in leftist terms like “public” or “social” ownership, offering the illusion of a “worker’s state”.

However, state ownership of industry is in no way a communist measure – by communism we mean a society free of state direction and based on direct democracy, common ownership and production for need, not want. Nationalisation takes control out of the workers’ hands and into those of the state, which bolsters the rule of class over class. In the Soviet Union, as in the West, there was still a small boss class who gained profit from the labour of the mass of the population.

Nationalisation is not only the preserve of the left. Other “state capitalist” ideologies exist which use nationalisation as a tactic. These include those on the right (such as the Nazis) and so-called “democratic” governments (such as Roosevelt’s with the “New Deal” and the Labour party prior to 1997).

Often, nationalisation has been a tactic for large scale industrial restructuring. It was used in 19th century Europe to develop infrastructure. A classic example is the railways, built at a time when it was believed that market forces would reward the good and useful and eliminate the bad or socially useless. However, it was necessary, as early as 1840, for the government to regulate and supervise them, simply to protect the public.

In Russia, after the revolution of 1917, the Bolshevik regime used state ownership to develop Russian industry defending it as socialist by saying that fully fledged capitalism was required for socialism to be achieved. In post-war Europe nationalisation was used to restructure devastated economies. Attlee’s Labour government, elected in 1945, brought the Bank of England, coal mining, steel, electricity, gas, telephones and inland transport under state direction. It also developed the “cradle to grave” welfare state.

However, in the past 30 years, nationalisation was thought to have dropped off the mainstream political agenda. The rise of neo-liberalism, the fall of the Soviet Union and the Labour Party’s dropping of its commitment to state ownership before its 1997 landslide, were, for many, the final nails in the coffin.

The Current Crisis

To many people’s surprise though, nationalisation has made a comeback. Facing the worst downturn since the Great Depression of the 1930s, the near collapse of the banking sector has forced the state to once again openly intervene in the economy. With workers’ militancy at a low ebb, leading to a low wage economy, the growth in credit provided the money to keep consumers spending. This was coupled with the UK economy’s reliance on banking and “mortgage derivatives”. So when the housing bubble burst credit dried up, banks teetered on the verge of collapse and the economy went into recession.

This was most spectacular in the case of Northern Rock with the first run on a bank in over a century and its eventual nationalisation. Since then, the state has also rescued Bradford & Bingley and the Royal Bank of Scotland, while the Anglo-Irish Bank was bailed out by the Irish government. The car industry has also been hit with renewed calls from some on the left for its nationalisation.

However, governments do not nationalise industries because ministers heed the calls of small leftist groups. They do so because of a need to prevent a banking collapse and its inevitable consequences – economic disaster, falling profits and the danger of social unrest.

This use of state intervention by so-called free marketeers like Brown and Bush isn’t new. Accord-ing to one expert, Ronald Reagan, great that defender of the individualistic free market, “presided over the greatest swing towards protectionism since the 1930s”. In essence, American workers bore the brunt of “free market discipline” whilst the rich benefited from the actions of the state. Laissez faire principles didn’t apply to the working class in that they had no freedom in opposing their exploitation. In Britain, after 17 years of Thatcherite economic gospel, public spending was still the same, 42.25% of GDP, as it had been when she took over. Meanwhile sustained attacks on the working class continued which saw the breaking of militancy and chronic levels of poverty. Unsur-prisingly, finance and industry did very well for themselves.

In this recession conditions for ordinary working people are coming under further attack. Redundancies, unemployment, wage cuts, cuts in public services and home repossessions are all on the rise. Benefits are also being targeted with the unemployed, single mothers and recipients of incapacity benefit, among others, in the firing line. At JCB workers voted for a £50 a week pay cut to avoid redundancies only for the company to make workers redundant anyway. With repossessions hitting record levels the government has even had to ask banks to go easy on mortgage defaulters. So, yet again, we see attacks on working people as a small minority of fat cats get billions in state aid.

Communist Critiques

“We would thank anyone to point out to us what function, if any, the state can have in an economic organisation, where private property has been abolished and in which parasitism and special privilege have no place. The suppression of the state cannot be a languid affair; it must be the task of the revolution to finish with the state. Either the revolution gives social wealth to the producers in which case the producers organise themselves for due collective distribution and the state has nothing to do; or the revolution does not give social wealth to the producers, in which case the revolution has been a lie and the state would continue.”

Diego Abad de Santillan

So, with all this state intervention, why are we no closer to a glorious socialist future? Why are we actually seeing peoples’ lives devastated by homelessness and unemployment? Simply put, nationalisation is not, and cannot be, a tool for achieving a communist society. Nationalisation by state socialist regimes has never eliminated capitalism. In the Soviet bloc there were superficial differences with the West. Most capital was owned by the state; there was no free >>>
market in labour; the poor had the “right to work”. Fundamentally though, the conditions of life for the working class were the same as in the West. Capitalism still existed, because workers sold their labour power and consequently were dispossessed of the means to freely create the conditions of life. As in the West, there was a ruling class which lived off the surplus produced by the workers – this class consisted of a central Party elite which owned the state.

Peter Kropotkin argued that:

“Everywhere the State has been, and still is, the main pillar and the creator, direct and indirect, of Capitalism and its powers over the masses. Nowhere, since States have grown up, have the masses had the freedom of resisting the oppression by capitalists. . . The state has always interfered in the economic life in favour of the capitalist exploiter. It has always granted him protection in robbery, given aid and support for further enrichment. And it could not be otherwise. To do so was one of the functions – the chief mission – of the State.”

So when left wing groups today call for the nationalisation of the banks and other industries (as the Socialist Party of England and Wales and their local councillors do) they are not arguing for socialism. After all, state intervention

has historically been a way to save capitalism from itself as it expands and dominates. After a decade of the Labour Party claiming there was no alternative to the free market, an alternative was soon found once the capitalism system faced the threat of collapse.

Libertarian Communism

While libertarian communist and anarchist arguments against state intervention seem to be vindicated by the credit crunch, how can we respond to the crisis? We, as workers, have to widen and deepen our struggles and not hark back to archaic, out-dated solutions like nationalisation which should be left in the history books. Instead, when struggles arise we have to push tactics which are anarcho-syndicalist and libertarian communist in nature such as collective action, direct democracy, mass assemblies and for links to be made between workers despite artificial divisions of workplace, union, sector, temp/permanent status, nationality and so on.

A libertarian communist economy, a system without the state and without the free market, where everyone has equal rights to have their needs met, has always been the aim of anarcho-syndicalists. Workers’ self-management will amount to little in a world of inequality with decisions being dictated by the market. However, we have also been careful to always point out that any communist system will be nightmarish unless the people support it and are involved in running it. Thus we argue for the socialisation of the economy, not its nationalisation.

From each according to their ability, to each according to their need.

“The spirit of anarcho-syndicalism…is characterised by independence of action around a basic set of core principles; centred on freedom and solidarity. Anarcho-syndicalism has grown and developed through people taking action, having experiences, and learning from them…the idea is to contribute to new and more effective action, from which we can collectively bring about a better society more quickly. That is the spirit of anarcho-syndicalism.”

SelfEd Collective

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Written by manchestersolfed

May 25, 2010 at 4:51 pm

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