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Harry Allen

Municipal Ownership of Utilities –
What Should Labor’s Attitude Be?

(November 1942)

From Labor Action, Vol. 6 No. 47, 23 November 1942, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

A proposal for New York City to purchase and operate a power plant (the Staten Island Edison Co.) is before the City Council for consideration. If adopted, the proposition would go before the city’s voters on a referendum to be held next January 30. Meanwhile, a committee representing 36 organizations, composed almost entirely of commercial, real estate, local Chambers of Commerce and taxpayers’ groups from the city’s boroughs, voices the “most intense opposition to the purchase,” according to former United States Attorney, Charles H. Turtle, the chairman of these groups. They are opposed on principle to municipal ownership, or to the city’s participation in “private business.”

On the other hand, trade unions, civic organizations and the American Labor Party favor the purchase of this public utility. Representatives of the CIO, the Amalgamated Clothing Workers Union, the International Ladies Garment Workers Union, the American Labor Party and other labor and civic organisations have appeared before the City Council on behalf of the proposition.

The Real Issue

These groups cite that there are more than 2,000 municipally owned power plants, in large and small cities where far cheaper rates prevail than in privately owned utilities. For instance, the 1941 residential service rate in Cleveland was 80 cents from the city plant and $1.00 from the private owners. In Manhattan the charge by the Consolidated Edison Co. for the same kilowatt hour time consumed is $1.65. Through the purchase of the Staten Island plant, it is hoped to reduce considerably the electric and gas rates on Staten Island and throughout the city.

It is well known that the profits of privately owned public utilities are enormous. Only through the pressure and exertion from small salaried and wage worker groups have municipalities been able to take over the ownership and direction of such utilities. True, municipal ownership of utilities has always been a political football. Opportunist politicians and reformists have been agitating this question for decades, while never daring to pose the real issue of private property as an institution and as the basis of the social order. But even their prostitution of the issue is not a sufficient objection against real socialists demanding the limitations on private property when possible.

Not Socialism

Municipal ownership of power plants, markets, etc., are palliatives and meager ones too. Those who talk about this as “socialism” in any sense at best confuse workers on what really constitutes socialism – namely, the social ownership and control of the means of production and distribution by the masses and the ending of the profit system. Under municipal ownership, profits continue for private investors; that is, the bankers, capitalists, etc., who purchase, the city’s bonds and receive their profits in the form of interest and dividends.

If, nevertheless, labor favors city ownership of public utilities and other enterprises, it is because, in a limited and small sense, they can benefit the masses. Consumers are overwhelmingly workers and small petty bourgeoisie. They benefit from the cheaper rates and avoid thus being gouged by the utility corporation. The high prices of monopolies are indirect taxes passed on to the workers to supplement their basic exploitation at the point of production – in the workshops.

With Workers’ Control

Revolutionists qualify and supplement their support of city ownership in given instances by specific worker-protecting proposals. Just as, nationally, the Workers Party advocates, in respect to the basic industries – e.g., the war industries – the nationalization or conscription of these industries by the government under workers’ control; so, on a small scale, the acceptance of city ownership of a given enterprise or utility is accompanied by a demand for workers’ control. At union meetings and public gatherings, municipal ownership must be explained or advocated from this broader social and labor standpoint.

Strong Union Necessary

Further, it must be pointed out, efforts are made, in the case of city-owned enterprises, either to prevent unionization or to limit union rights of the workers in these plants. The pretext for this on the part of the local governments, supported by employers, is that employees already have “sufficient” protection as civil service workers and through the receipt of pensions.

Merit status for jobs and pensions are welcome; from the workers’ standpoint they are a legitimate part of employees’ rights. But experience shows that a strong union, maintaining full union rights – the right to strike, etc. – is the best protection not only for retaining these benefits, but likewise for general working conditions – wages, hours, etc.

With this understanding and approach to such questions, revolutionary workers are in favor of such a specific proposition as the municipalization of the Staten Island Edison Co.

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