Editorial: Profit and Public Service (1958)

Editorial from the January 1958 issue of the Socialist Standard

One of the tragedies of misplaced enthusiasm and wasted effort has been the campaign for nationalisation. The earliest advocates could be divided into two groups, those who thought that State concerns are more efficient than private companies and who had no interest in anything else; and those who wanted to replace capitalism by Socialism and who thought that the centralised organisation of State industries would make it easier to introduce Socialism. The latter (Keir Hardie, for example) did not think there was any other merit in nationalisation. They did not think that it was itself Socialism or that it would benefit the workers.

But that was a long while ago. Since then the idea got around that nationalisation would be good for the workers and a good vote-catcher for Labour candidates. And this slipped imperceptibly into the idea that nationalisation is Socialism and would solve all problems. It was supposed to be based on the principle of “public service” not profit.

Now we have seen the nationalised undertakings in operation under laws passed by the Labour Government. We see them being run on methods hardly distinguishable from those of any large private company. The law requires them all to be run to make a profit, so the nationalised Railways close down branch lines which do not pay, ignoring the inconvenience and hardship caused to the load population; fares, coal prices, electricity and gas, etc., charges, are raised just like other prices. Workers' wage claims are resisted, strikes occur, and from time to time miners and others are prosecuted for breach of contract.

Disappointed about this, some workers have thought that the trouble is due to having the wrong people in control of the nationalised industries, not recognising that whoever is in control the Nationalisation Acts impose the same obligation to make a profit

A recent example is the ex-miner Sir James Bowman, Chairman of the National Coal Board. In evidence to a Parliamentary Select Committee he complained that the Board is in an ambiguous position in that their freedom of commercial action is limited by obligations placed on them by the Government. In particular, the Board is prevented from selling coal at the higher prices they think they could get if given a free hand. He said:—

    "It would not be a bad thing if you were just to say to the Coal Board—and how I would welcome it!—'From now on you are free to act as a commercial concern.' Then I think, we might be able to show some different results,
    “But full employment might suffer, and British industry would not be subsidised with the price of coal at the level it is at the moment, compared with what we can get abroad."

(Daily Telegraph, 30/11/57.)

He added that if given a free hand the Board could show “tremendous profits.” It all comes back to the elementary truth that you cannot have Socialist industries under capitalism. Sir J. Bowman is a man doing the job required of him, making the Coal Board a profitable, State capitalist concern.

No other method is possible under capitalism: the assumed alternative of running the industry at continuous heavy losses would merely lead to a demand either for reorganisation, so that profit would be made or a demand for selling back to private companies.

Going in for nationalisation, in the belief that it would be a step to Socialism, was a false move. It has not achieved anything. It never had the support of the Socialist Party.