J. T. Murphy

Socialism and the Public Corporation

Source: The Aldelphi, October 1933, Vol. 7, No. 1
Transcription/Markup: Brian Reid
Public Domain: Marxists Internet Archive (2007). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.

I HAVE commented already in previous articles in The Adelphi on the danger of assuming the existence of a Socialist Labour Government as a starting point of Socialist policy. The danger is becoming increasingly real in the “left” of the Labour Party no less than in the “right.” In the agenda before the Brighton Conference, even in the resolutions dealing with Fascism and War, the danger of thinking in terms of hypothetical situations is perfectly clear. Resolutions usually commence with the words “in the event of.” If it were only realised that Fascism and War are inseparable from capitalism and have their roots in the immediate situation, as also has the fight against Fascism and War, it would soon be clear that we have to begin the fight for Socialism here and now on the basis of the struggle of the classes.

The large volume of revolutionary resolutions (more often revolutionary in intention than actual content) is an indication of the growing recognition of the need for the Labour Movement to make the actual revolutionary challenge to capitalism. But because those who are responsible for the drafting of the resolutions have not consciously prepared their resolutions with a view to expressing and leading the class struggle, good intentions replace clearness of purpose. In nothing is this more obvious than in the resolutions instructing the next Labour Government to proceed immediately with measures for socialising the banks and principal industries. For example, one resolution demands the

“Socialisation of finance, including Public ownership of Bank of England and Joint Stock banks, control of other financial houses, and the setting up of a National Investment Board.”

Another demands the

“Public control of Banking, Finance and Investment.”

Another demands the extension of the principle of

“Public ownership and control of the Mines, Industries and Land. . . .”

Yet another wants to

“Control the industries and services of the Nation according to socialist principles and not by means of Public Utility Companies which are the creation of Capitalism.”

One ventures to use an old expression and wants

“The immediate Nationalisation of Mines and Railways controlled by bodies predominantly socialist. . . . ”

And so one could go on quoting. But in no case is it quite clear what the resolution means. Who is to control whom? How is control to be exercised? Who is the Public? Who the “Nation”?

In the earlier days of the Socialist movement when the collective forms of capitalism were not so varied and state capitalism was not so far developed, the Labour Movement demanded the “Nationalisation” of this or that industry and this was understood to mean “Ownership by the State.”

Reformist Socialists generally accepted, without discussion, that the State represented Society as a whole; that its parliamentary institutions provided the means for popular opinion to express itself; and when that opinion became Socialist, or at least the majority of it, the State would become Socialist automatically. They grew up with these ideas and the Liberalism of prosperous capitalism did not jolt them at all into questioning the soundness of the theory.

The first real challenge to it was not in the realm of theory, but of struggle. The great strike wave of 1911 to 1913 in which revolutionary socialism made great headway, saw the general strike appear in current discussions of the Trades Union Congress. Syndicalist ideas became exceedingly popular, and it was in this period that Guild Socialism, that mixture of syndicalism and parliamentarism, began to make headway.

But more important still, from the standpoint of mass experience, was the wartime experience of state capitalism in practice. The outcome on the positive-side was the rise of the Shop Stewards’ movement which was followed by the widespread popularisation of “democracy in industry.” By 1917 the Government of the day and the employers generally answered the new movement with what became known as “Whitleyism,” conceding to the workers participation in the organs of control of industry under the capitalists’ management.

The centralisation and State control of industry characterised the whole war period and demonstrated that without a change in the character of the State, capitalist exploitation could continue as in private enterprise. This at bottom was the meaning of the wave of syndicalist demands for “the control of industry by the workers.” But the issue was never made clear at that time, as one which involved the character of the State.

Hence when the Communist Party was compelled, on its application for affiliation to the Labour Party, to focus the “Dictatorship of the Proletariat” as a principal question, the reformists turned the issue into one of insurrection versus parliamentarism instead of analysing the evolution of the State and its relation to classes and to Socialism.

When therefore the Public Corporation appeared on the scene, it was hailed as a method of “socialisation” and welcomed, much as the national Post Office was welcomed in its day, as “a measure of Socialism.”

The principal spokesman on behalf of this “new means of socialisation” is Mr. Herbert Morrison. As Minister of Transport he played a great part in paving the way for the London Transport Board. In the process he made his impress upon the resolutions of the Labour Party Conferences until practically all the resolutions dealing with “industrial re-organisation” have been watered down from “Nationalisation” to “Public Corporation,” “unifying the Industry,” etc. Mr. Morrison says in his latest pamphlet, An Easy outline of modern Socialism:—

In a Socialist Society many services which are local in character will be run by municipalities; others (perhaps of a domestic or of an individual character) might be run by the consumers’ Co-operative Movement. Services which are governmental or somewhat routine in character may well continue to be run by State Departments. But those industries which are commercial in character and which require rapid, day-to-day decisions of an important character to be taken, and which must be ready on-the-spot to meet the present or anticipated requirements of other industries or the general public, will in all probability—I do not dogmatise—be run by bodies which have come to be known as Public Corporations.

As this conception of management is newer than the others, perhaps I had better explain it. For example, the National Iron and Steel Corporation would be quite definitely a public authority; it would be managed by a Board, appointed, not by shareholders, but by the appropriate Minister of State. The Minister would be directed by law to select people as members of the Board of Management, not because he liked them or because somebody was anxious to push them into a job (as is commonly the case with company directors), or even because they were experts, but on the basis of certain general qualities or special experience of the work to be done. They would have to be competent people, and it must not be thought that all the competent heads are on well-to-do shoulders. It would be a fairly small Board and the members would not necessarily be full-time appointments; indeed, it might be best for them to have contact with other phases of economic and social life. The Minister would be responsible for the appointments and would be criticised if he went wrong. . . . (p. 9.)

Mr. Morrison here makes much of the word “competence.” In fact it replaces the word “efficiency” which used to be so prominent in the language of the Fabians. He evidently thinks that a competent oligarchy is quite a good thing if it is “competent.” But nowhere here in the pamphlet is there the slightest reference to the State and its character. Throughout he maintains the old assumption of the Reformist Socialists, namely, the State as representative of Society in general, changing organically with the growth of the Socialist idea. It will be noticed however that he makes “Socialism” and “The Public Corporation” synonymous terms.

The fact is that it is no more Socialism than the Post Office is Socialism.

But the situation has now been carried a stage further. The Executive of the Labour Party has put forward some resolutions which are announced by the Daily Herald, as a great plan for the “Socialisation of the Banks” as the first step to be taken by the next Labour Government in a whole series of socialisation measures with regard to industry and its reconstruction. It is proposed that the Bank of England become a “public concern, and that the Big Five Joint Stock banks be converted into a public service. The Daily Herald summed it up as:—

“A threefold policy; public control of the Bank of England, and so of currency; public control of the joint Stock Banks, and so of short term credit; public control of a National Investment Board, and so of long term credit.”

It will be observed that in these resolutions the Executive have not returned to the fight of the Leicester Conference when they were defeated on the question of interference with the joint Stock Banks. I don’t know whether the “Left” will claim this as a victory but it is difficult to regard this series of resolutions, which bring the “socialisation” measures of the Labour Party into the foreground, as anything other than an attempt to outmanœuvre the “Left” by giving the impression that the Executive itself has abandoned “gradualism.” At least they are regarded as a substitute for the old “gradualism.”

But what are they in fact? Do they constitute an attack upon capitalism? First let us hear the voice of the Daily Herald itself. In answer to critics its leading article on 14th August said:—

In the United States, France, Australia and in other great nations where the Central Banks are already under public control, they would call the proposal to hand them back to the sport of narrow financial interests a “fantastic enterprise.”

The control of the investment of this country is necessary because the nation’s welfare has forced it. International loans, loans to the Dominions, loans for British local authorities are already regulated.

Labour suggests the formal recognition and extension of this control under full public auspices. . . .

It is quite obvious from this pronouncement that capitalists have nothing to fear from the Executive’s proposals. Nor is it possible to get any other impression even from Mr. Morrison’s exposition of the Public Corporation in his book, Socialisation and Transport. The supporters of the Public Corporation are much in the same position as the advocates of immortality in the world of religion. These assure us that “there is no death, what seems so is transition.” The capitalists are hearing from the apostles of the Public Corporation that in Socialism there is no death for capitalism; what seems so is transition.

And so it would seem from Mr. Morrison and the Executive of the Labour Party. Investors are to get full return for money invested. The “competent” people, the “efficient” people, the depositors, the industrialists engaged in “legitimate business,” the experts will all be well treated, indeed made secure. The oligarchs will remain. There will be greater efficiency. The “quality of service to the public will be better.” Profits will be more regular. Australia and the U.S.A. are our models of progress.

But where do the workers come in? No reference is made to them except to decry them. Workers’ control, says Mr. Morrison, has proved a failure in Soviet Russia and he bids us in a special chapter of his book to read the observations of Bolsheviks on their experience and to read the various decisions of the Communist Party of the Soviet Union on the question.

Mr. Morrison “gets away” with some pertinent and important points on the subject of “workers’ control” in his replies to Mr. Clay and Mr. Cliff, who both demand the representation of the trade unions in the Public Corporations and all the machinery of workshop committees, etc. But both Mr. Morrison and his critics in the Labour Party controversy of the last year have this in common. They omit all reference to the question of the rôle and character of the State. Class relations are not referred to. Socialism which leaves the working class as a subject class is not Socialism. The sooner this is grasped the sooner will it be realised that “workers’ control” as practised by the Bolsheviks was subordinate to the most fundamental issue of all in relation to Socialism—namely, that of the Workers’ State.

Without a Workers’ State superseding the capitalist State, then no amount of representation of the trade unions on this or that committee will constitute Socialism. Public Corporations that are not subordinate to, and the creation of, a Workers’ State are nothing more nor less than State Capitalism, just as the Post Office is a form of State Capitalism. Mr. Morrison and others of the same school of thought mistake the forms of Socialism for the content. The Post Office is a highly centralised capitalist institution. The workers within it are as much wage slaves as the workers in private capitalism. The Public Corporation partakes of exactly the same character. It is a highly centralised form of capitalism which leaves the workers subject to more severe rationalisation than hitherto, and makes them more than ever subject to an oligarchical management, and increases the army of unemployed.

The structure of such organisations, that is the technique, the centralisation, the efficiency, can be transferred to Socialism, indeed will undoubtedly be transferred and developed to still higher forms. But that is only possible on the condition that the working class has the State Power in its hands to suppress capitalism. Such power the Labour Party Executive is not asking for.

The path to Socialism is not through Public Corporations or workshop committees or Trade Union representation on this or that Public Board, but through a fundamental change in class relations, the superseding of the Capitalist State by the Workers’ State. This and this alone is the guarantee that the forms of organisation and the technique of capitalist production can and will be transformed into Socialist technique and Socialist forms of development.

I do not wish it to be inferred that workshop committees and trade union representation on this, that or the other have no value. They have value, but always providing they are the means of advancing the struggle of the workers against the capitalist and not the means of pursuing a policy of class collaboration. It may be also that in certain industries after the Workers’ State has been established the Public Corporation form of development may be used as a means of transition to Socialism. But this can only be regarded as suitable for industries which are not ripe for the fundamental measures of socialisation which a Workers’ State must put into operation in all those industries which are ripe. And that means, for this country, all the key industries including the banks, the land, the mines, the railways, etc. etc.

Nor let there be any ambiguity about the use of the word socialisation. I mean by it, and so does every revolutionary Socialist entitled to the name, ownership and control by the Workers’ State. Finally, let us have no ambiguity on the question of what we mean by a “Workers’ State.” It means a State power operating on the basis of the class interests of the workers for the suppression of capitalism and the creation of the social foundations of the classless order of society which is the consummation of Socialism.