Michael Kidron

The Fight for Socialism – 4

(March 1958)

From Socialist Review, 8th Year No. 6, Mid-March 1958, pp. 5–6.
Transcribed by Ian Birchall, Nina Kidron & Richard Kuper.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

For Full Nationalization and National Planning

AS LONG AS EACH FACTORY, each shipyard, each shop is responsible to a single owner, or to a small group of owners, and as long as the only relationship existing between these groups of owners is competition, there can be no planning, no rational organization of production. This is what causes one of the strangest paradoxes of capitalist production: on the one hand there is the most meticulous organization within each factory where every process is worked out to the last farthing, on the other hand you find complete chaos and anarchy in the relations between the various capitalist organizations.

An American Socialist, Max Shachtman, has described very exactly the disorganized way in which Capitalism does advance and the logical answer to such chaos:

The trouble is that this expansion of production in boom times is in its very nature unplanned. For example, a 100 percent increase in wheat production does not require a 100 percent increase in the production of threshing machines. A 100 percent increase in the production of threshing machines may mean a 100 percent increase in the iron that goes into the machines, but only a 10 percent increase in the production of the tools by which the threshers are made. A 100 percent increase in the production of cotton textiles may require only a 25 percent increase in the production of textile machines. What is more, this small increase in textile machinery for one year may suffice to keep textile production at a higher rate for five years – the market for textiles themselves is more continuous than the markets for textile machinery, the one is used up far more rapidly than the other.

“If all the capitals could be joined under one roof, and production centrally planned with meticulous care, it would be possible to work out a schedule of expansion for each industry so that each would develop in harmonious proportion to the other. Planning on a national scale (eventually on an international scale) could regulate the proportions in which each industry should be expanded so that the whole of economic life advances harmoniously.” (Max Shachtman, The Fight For Socialism, p. 53, New International Publishing Co., New York, 1946)

Even Partial Nationalization – a success story

IN BRITAIN only 20 percent of industry is nationalized – the deficit industries at that – and yet their success from a capitalist point of view, has been remarkable.

Before nationalization, the railway companies were running at a loss, or rather, they weren’t making as much profit as other capitalist investments. So the Government stepped in with a subsidy, with loans and with other forms of aid, and guaranteed the railway owners a net profit of £40 million a year (1940) which was later raised to £54 million a year (1944). When vesting day came and the railways were nationalized the owners received compensation to the tune of £1,065 million which was saddled on to the nationalized industry. The British Transport Commission now has to pay £59 million a year (1956) in the form of interest and redemption. And yet in spite of this, and in spite of the fact that British Transport doesn’t get one penny in Government aid, it still makes a clear profit (£4 million in 1956).

The same is true of the coal industry. Production has gone up by 25 million tons since nationalization. Output has risen by 2 cwt. per man-shift. The National Coal Board pays out over £21 million a year in interest and redemption to the ex-owners. It provides the steel and chemical capitalists with 20 million tons of coal a year at a price subsidized by consumers for coal-for-the-grate. And yet it makes a profit and the mineworkers have still been able to fight for and win a position as third in the wage list of the whole country (after being 62nd in the list for so long).

The British Electricity Authority shows the same trend. A surplus has been accumulated since nationalization (profits in 1955/6 – £19 million) while its output has increased by 95 percent since nationalization (to be compared with a rise in manufacturing output of 54 percent.) Its prices have gone up less than those of any other major product. No wonder the Tory Parliamentary Secretary to the Minister of Fuel and Power, Joynson-Hicks, handed it the laurels: “expansion has gone hand in hand with increased efficiency.” (Hansard, October 26th, 1953).

The Gas industry can tell the same story, so can the British Overseas Airway Corporation and the Bank of England – all nationalized, all profitable from a strictly capitalist viewpoint.

Limitations of partial nationalization

PARTIAL NATIONALIZATION may please the capitalists; it cannot satisfy a socialist. Not only has the state relieved the private capitalist of his least-profitable investments, not only does this state-capitalist sector still work in the interests of the private capitalist sector by paying huge compensation and by providing cheap services, but the state-capitalist sector is still caught up in the problems of capitalism.

If the private automobile factories can’t find markets, steel production will drop and so will coal production and transport, whether nationalized or not. Miners and railwaymen will be out on the streets. Partial nationalization is no security for them.

If the private capitalists panic and start exporting their funds as they did in 1951, the state-capitalist sector cannot prevent it, not having control of 80 percent of the national capital.

In sum, Labour’s policy of partial nationalization was a clear gain to British capitalism, but no solution to its basic contradictions. It allowed the capitalists to pull cut of deficit industries and invest more profitably elsewhere; it made the profitable industries more profitable by servicing them at subsidized rates with the products of the nationalized industries. It even gave the ex-owners all the say on the nationalized boards. And, if that was not enough, the Labour Government gave free rein to the representatives of Capital in the Government and especially in the administration of non nationalized industry.

Of this policy, John Cates writes the following illuminating facts:

... government of business by business was a conspicuous feature of Labour’s policy. At various times, the Leather Controller was an official of the United Tanners’ Federation. The Match Controller was attached to Bryant and May, and, indeed, for a period had his offices on the firm’s premises. The Footwear Controller was an executive of Dolcis. Employees of Distillers Ltd. filled the top positions in the Molasses and Iudustrial Alcohol Control of the Board of Trade. The Cotton Control was largely recruited from Liverpool cotton firms, and the Timber Control from trade organizations. Perhaps the largest share of control positions were staffed by people from Unilever. In 1947 there were 90 former Unilever employees in the Ministry of Food, 11 of whom possessed full executive and administrative powers. Nor were they the sole representatives of Business enterprise. Each of the commodity divisions of the Ministry was headed by an employee of a leading firm in the industry.

... under Labour a number of businessmen in government were paid, not by the government, but by the firms for whom they had been working, and in other cases firms made up the difference between government pay and the previous salary. And Sir Stafford Cripps admitted that some members of the Raw Materials Control “have always been permitted to keep in general contact with their firms ...” (New Statesman and Nation, August 9, 1952.)

Although the Labour Party in power offered no alternative to capitalism in Britain, but on the contrary helped it to become more efficient, more able to cope with competition in international markets, and gave it free rein at home, it solved nothing. Overproduction is still with us.

Partial nationalization cannot eliminate this problem; it is not one step further on the road to Socialism, notwithstanding the Party document, Industry and Society. Full nationalization is, and even full nationalization with the total elimination of the capitalist class, is only one step, only part of the answer.

Last updated on 16 February 2017