Why public ownership?

Submitted by AWL on 6 November, 2019 - 8:57

Labour has pledged to bring energy, rail, water, and mail into public ownership and to “put democratic management at the heart of how those industries are run”.

These are some reasons for doing this:

• Those industries are central to economic life. To make a real socialist Green New Deal, to reshape economic life to cut carbon emissions adequately, requires public control of those industries rather than just nudging and coaxing their private owners.
• They are, to one degree, or another, monopolies or semi-monopolies. Private-profit companies running such industries acquire big chances to make extra profits while providing a poor service, as the privatised Train Operating Companies do.
• Historically, the privatisation of those utilities was a rip-off. For example, the regional water companies were sold off by the Government in December 1989. Over the next six years the shareholders gained £10 billion, in addition to the large amounts paid out to them in dividends from the companies’ profits, which totalled over £1.7 billion in 1994-95.

Those shareholders were mostly not small owners: by 1995 only about 15% of the shares in the water companies were owned by individuals, whether of large wealth or small.

Assets which had been built up by the labour of public-sector workers over decades were sold off to give a cash boost to the Tory Government and a bigger pay-out to the new shareholders and the company bosses.

Another drive behind privatisation was to break up workforces and expose them more to the cutting winds of capitalist competition.

The only counter-argument is that public ownership is “inefficient”. But the vast complexity of relations between the chunks into which the electricity and rail industries were chopped up for privatisation has expanded paperwork and bureaucracy far beyond anything the old integrated public enterprises were guilty of.

Public ownership is not in itself socialism. It wasn’t socialism under past Labour governments, if only because newly-nationalised industries were generally run by the same bosses as when they were private, with no more say for the workers. And it was surely not socialism in the old USSR and the East European states which called themselves “socialist” before 1989-91.

Socialists knew that in advance. The Irish socialist James Connolly explained:

“State ownership and control is not necessarily socialism — if it were, then the Army, the Navy, the police, the judges, the gaolers, the informers, and the hangmen, all would all be socialist functionaries, as they are state officials — but the ownership by the state of all the land and materials for labour, combined with the co-operative control by the workers of such land and materials, would be socialism…

“An immense gulf separates the ‘nationalising’ proposals of the middle class from the ‘socialising’ demands of the revolutionary working class. The first proposes to endow a class state... with certain powers and functions to be administered in the common interest of the possessing class; the second proposes to subvert the class state and replace it with the socialist state, representing organised society — the socialist republic.

“To the cry of the middle class reformers, ‘make this or that the property of the government’, we reply, ‘yes, in proportion as the workers are ready to make the government their property’.”

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