Finance and Industry: Nationalisation and the Commercial Jungle (1968)

The Finance and Industry column from the March 1968 issue of the Socialist Standard

Nationalisation and the Commercial Jungle

The shortcomings of capitalism are widely felt but little understood. The Labour Party see some of these as being due to the unbridled competition resulting from private enterprise and supposed Tory policies. To them capitalism is competition, private enterprise and the Tories. Their answer is to restrain competition through government intervention in industry and through nationalisation. Add planning to this and you get their idea of Socialism. But if this is Socialism, then the Tories too could call themselves socialists.

The government’s proposed aluminium smelter scheme is an example of how little can nationalised industries be isolated from commercial wrangles. In the past it was cheaper to import aluminium, but now it is expected to be a paying proposition to do the refining and smelting in Britain. The proposed scheme set off a competitive scramble between the nationalised atomic energy, electricity and coal industries. Aluminium smelting ' requires large, uninterrupted supplies of electricity. New nuclear power stations were expected to provide the cheapest source of power. But Alcan proposes to use electricity generated in their own coal-fired power station. It was this that caused the storm amongst the nationalised industries. The Central Electricity Generating Board (CEGB) complained that Alcan would be getting coal cheaper than they themselves were. The recently nationalised steel industry made the same complaint and added the objection that manufacturers of a rival metal were being given an unfair advantage. Again the NCB has been complaining that the government’s fuel policy unfairly discriminated against coal and in favour of atomic power. On top of trying to sort out the rival claims of the aluminium companies and to settle the squabbles of the nationalised industries, the government has come under fire from abroad. Overseas producers, especially Britain’s EFTA partner Norway, do not like the idea of losing part of their market. The Norwegian government suspects that the EFTA treaty may be violated, claiming that aluminium cannot be produced profitably in Britain without subsidy.

This is the predicament of those, like Labour, who would tame capitalism whilst leaving its basis intact. Socialists do not care who gets the contract or what kind of fuel is used or whether EFTA agreements are violated. We know that capitalism is based on the monopoly of the means of wealth production by a minority. Buying and selling and the commercial jungle result from this. Our answer is to replace minority ownership by the common ownership of the means of production by society as a whole. Then there would be no basis for commerce or competition as there would really be a common social interest.


Rich and Poor

The second United Nations Conference on Trade and Development (UNCTAD) meeting in Delhi was faced with problems that would have defeated the mythical wisdom of Solomon. They will also defeat this international gathering of talented experts. Unctad’s aim is to find ways of bridging the gap that exists between the so-called developed and underdeveloped nations. Statistics are used showing the differences between America and India in per capita income, steel production, electricity output and so on. Giving the impression that India equals poverty and America affluence and so the conclusion that poverty in India will be eradicated when average income and production figures reach those of America. So, Unctad claims, what is needed is more trade and technical development. But it is on the question of trade that their plans founder.

The underdeveloped countries are urging easier access for themselves to the markets of the developed countries. The developed countries are trying to balance their own trade and payments. This involves cutting imports and stimulating exports. So they are faced with the same problem as those they say they are trying to help: more exports. The main exports from the poorer countries are raw materials. But their plight in recent years has net been due to any lack of enterprise or too slow increase in productivity, as is generally thought, but to too much of these. The problem has been that the prices of their export commodities have been falling because the market cannot absorb the extra production. This is what the Unctad experts have to sort out. The best capitalism has come up with so far is giant bonfires of coffee, cocoa and other products, or, what amounts to the same thing, schemes for curtailing production. Proposals that more manufactured goods should be imported by the developed countries from the less developed are worth as much as the suggestion that Brazil should import large quantities of coffee.

Just as all nations are faced with trade problems so they all also have poverty problems. America is not entirely populated by Rockerfellers and Henry Fords. Nor is everybody in India destitute. Living in affluence there are not only the remnants of the pre-capitalist rulers but also home-grown captains of industry who are just as wealthy as their American counterparts. The problem is not one of rich and poor nations, but of rich and poor social classes. The solution to the world-wide poverty problem is the establishment of a world community in which production is geared solely to meeting human needs. The problem is not one of trade, aid or technology but of how society is organised.

Joe Carter