Nationalisation is not just an abstract slogan. Whole sections of British industry were nationalised by Labour governments after 1945. Brendan Young investigates, and explains why nationalisation alone is not enough. WHY WERE wide sections of British industry nationalised after the war?
Mainly it was because they were vital parts of the economy which were in danger of collapse - because private capital was unwilling to provide the scale of investment necessary to modernise and rationalise them.
All of the industries nationalised in Britain - notably coal, rail, steel, road transport, cars and aerospace, were taken over by the state at various points after the Second World War. The utilities such as gas and water had been run by municipal authorities from Victorian times, and were later taken over by the state.
After the war both the coal and rail industries were near the point of collapse. They were in the hands of a variety of mutually competitive owners, none of whom was prepared to rista. the investment needed for modernisation.
The same was the case with electricity and gas. Labour fumbled and failed over iron and steel, but in 1960 Lord Robens (then Labour's Shadow Minister for Industry and later chair of Vickers) argued for them to be nationalised on the EFENDING CLAUSE grounds that the industry was not being run efficiently, and was vital to the British economy.
Support
The Financial Times actually supported the nationalisation of the British Aircraft Corporation in the late 1970s, as did its owners - GEC-Vickers.
All nationalisations in Britain have included compensation at rates acceptable to the owners.
Similarly all nationalisations brought massive job losses as part of rationalisation: South Wales had 108,000 miners in 1948, but only 48,000 in 1968.
Beeching's rationalisation of the railways in 1962 closed thousands of miles of track.
After the formation of the British Steel Corporation in 1967 came a stream of plant closures and job losses.
The effect of nationalisation therefore, was that the state carried out a concentration and centralisation of capital in key industrial sectors. It injected new capital and modernised key industries to meet increased international competition: in this way with the state acted in the overall interest of British capitalism.
Nationalisation in Britain has always been geared to the needs of capital, and never been part of an economic plan based on social need.
Nor has it ever constituted expropriation, since private owners were paid handsomely.
And once nationalised, the industries continued to operate on the basis of commodity production, driven by demand in the world market.
Capitalist labour relations also continued in the nationalised industries as in privately-owned industry. Nor was there any vestige of workers' control - many said that they had simply exchanged one set of bosses for another.
Why then was nationalisation so popular when it happened, and why do socialists continue to support the idea?
Reliance on state
For many in the Labour Party nationalisation was seen as the equivalent of socialism: they thought the state under Labour would direct the economy in the interest of all.
Many workers shared this ideology at the time of nationalisation, when it was celebrated as "the workers owning the industry" and as a guarantee that the mass unemployment and lockouts of the 1930s would never return. Nationalisation in Britain has always been geared to the needs of capital. It has never been part of an economic plan based on social need.
The class character of the state - which remained firmly capitalist - and the social relations defended by it were never (and still are not) regarded as the central question.
Experience of working in nationalised industries however, brought many to the conclusion that this "socialism" was not what they had expected or desired.
Disillusion took expression during the 1970s in the miners' and other pay strikes rather than a mass radicalisation around the need to politically challenge the state, which upheld capitalist relations within the nationalised industries.
Even attempts at workers' co-ops and workers' plans (Upper Clyde Shipbuilders, Lucas Aerospace) did not lead to any coherent political analysis.
Nationalisation did however, facilitate strengthened union organisation and greater possibilities of solidarity action because the existence of a common employer posed the question of joint struggles for common wages.
The debate on nationalisation takes on added urgency when we look at Labour's current economic proposals. Blair has tied himself to the mast of a "dynamic market economy". Brown's economic policy is a supply-side strategy in which international competitiveness is vital.
But central to international competitiveness are high levels of capital investment and cheap, flexible labour. This means that Labour is going to have to keep wages low and workers under control if big capital is to be voluntarily induced by the lure of profit to locate in Labour's economic policy is now in harmony with European Union economic thinking, according to which the market (in finance, production and services) is the best mechanism to stimulate growth and efficiency in the economy; the state should act as provider only where the market fails - in research and development, infrastructure, education and some aspects of welfare - and its main function should be one of regulation.
"Partnership' with capital Brown proposes 'partnership' with industry; public control (rather than ownership) is advanced for the public utilities, with commitment to re-nationalise only the railways.
Thus there is little strategic difference between Labour policy and Heseltine's version of neo-liberalism. Blair's proposal to re-draft Clause 4 puts the ideological icing on the cake: nationalisation is to be written out of Labour's policies forever.
But if nationalisation under capitalism does not meet workers' needs, why then should socialists support it?
In the first place, it is a defensive demand, to protect workers from unemployment and impoverishment: if private capitalists cannot sustain production and employment, we demand that the state should step in and take over.
We should also demand a sliding scale of hours and wagesto prevent unemployment and impoverishment. Nationalisation is also necessary to control the location of enterprises and prevent eco nomically peripheral areas becoming low-wage zones providing reserve armies of labour.
Moreover a Labour government would have to embark on a programme of nationalisation of the banks and major monopolies if it was to have any hope of exerting control in the interests of the workers and unemployed over the investment and use of capital.
Sabotage
Voluntary agreements with the capitalists do not work, as the sabotage of Tony Benn's attempts at planning agreements under Labour's National Enterprise Board in the mid 1970s clearly showed.
It makes little difference that most big plants in Britain are now owned by multinational companies, British or otherwise; rapid nationalisation would be necessary to stop a flight of capital, economic disruption and counter-revolutionary agitation by the British ruling class.
This is not to suggest that a 'national plan' by a workers' government could resolve the economic crisis in Britain. Global production and exchange requires an international strategy, of which taking control of the 'national' economy is merely the first necessary step.
While recognising that nationalisation of itself is an insufficient demand, socialists should support it because it draws the masses into active politics and makes them more critical of the machinations of the bourgeoisie and of the state.
It gives socialists opportunities to raise the question of the class character of the state, which is held to be a neutral and suitable instrument for social reform in Labourist ideology. Refusal of compensation should always be part of our demands for nationalisation, as well as arguments on the need for workers control and opening the books.
While the experience of nationalisation and the so-called mixed economy has not been positive for many workers, an economic strategy attuned to the core of EU economics - liberal capitalism -can only be worse.
Within the working class, nationalisation retains support as a mechanism for social control of the economy.
It is this sentiment which we must build upon and clarify in the fight to defend Clause 4.