On Nationalisation of the Railways. (1920)

Book Review from the June 1920 issue of the Socialist Standard

"The Case For Nationalisation", by A. Emil Davies. L.C.C. Chairman Railway Nationalization Society. London : George Allen & Unwin. Paper; as. 6d. nett.

What our author Forgot.

In this voluminous work Mr. Davies has certainly made out a case for nationalisation as against its capitalist opponents. He meets their charges of extravagance with an enormous weight of evidence to the contrary. But, like all Nationalisers, he has failed to show why the workers should interest themselves in it, either as an immediate reform or as a stepping-stone toward Socialism. He has convincingly, if unconsciously, shown that Nationalisation offers nothing to the workers when he proves, as he does quite conclusively, that both Nationalisation and Municipalisation have invariably effected greater economies than similar undertakings under private enterprise. Mr. Davies admits that a more economical production results from the large concern as well as from the State concern, but he quite fails to draw the obvious conclusion.

What Economy Means.

The chief result of centralisation and better organisation is, of course, increased unemployment. The strongest proof of this is that unemployment has increased side by side with the economising processes. When concerns were small, and competing with one another, unemployment was nothing like the factor that it is to-day, when many concerns are welded into a few, able to install labour-saving machinery and effect all the economies incidental to large-scale production.

The usual objection to Nationalisation is that it is invariably wasteful and extravagant, especially in the way of high-salaried officials. Mr. Davies shows that this is equally true of the large concerns, where enormous salaries are paid to directors and others. He gives facts and figures ; he makes comparisons and builds up a case for Nationalisation as against private enterprise that is unassailable on this head.

A Significant Question.

Before doing this, however, he warns the reader against expecting too much from Nationalisation while under capitalist control. He says : “Is it to be expected that men . . . opposed to the principle of community ownership which would affect the position they and their class hold, should really endeavour to make a success of government undertakings? The interests conflict too violently. If force and circumstances compel them, as it does, steadily to increase the size and number of Government undertakings, they do the best they can for their friends and class.”

He Proves Too Much.

In spite of this handicap, however, State and Municipal concerns are proved by overwhelming evidence to be more efficient and economical than private concerns. Post Office, telegraph, telephone, railways, mines, electricity supply, banking, insurance, and many other examples from all parts of the world are shown to be financially sound according to capitalist standards and more economically worked than similar undertakings under private enterprise. In fact, so much does Mr. Davies prove in this direction that if every worker interested in the subject read the book intelligently they would all straightway become opponents to Nationalisation and its further advocacy by labour leaders.

It is impossible to follow our author throughout his 305 pages of argument, examples, and evidence, but one quotation will illustrate the point. He says: “In Carlisle, where the liquor trade has been nationalised, we are told that one brewery in the hands of the board does the work previously done by four. One spirit bonding employing 14 persons and a motor lorry does the work less efficiently performed under private enterprise by 70 men and 17 lorries.”

One can easily imagine the extent to which unemployment would be increased if every State undertaking and centralised concern has been only half as successful as this. But Mr. Davies tells us that under the control of the Labour Party this economising process would be increased immensely. If he is correct it is unnecessary to go further to prove that the Labour Party is hostile to working-class interests. For if Nationalisation means that fewer workers are required to produce a given quantity of wealth, or provide a given measure of services, then the resulting increase in unemployment must, because of the intensified competition for jobs, tend to reduce the general standard of living for the working class.

Unlike most capitalist agents who deny this obvious conclusion without attempting to show wherein it is not sound, Mr. Davies recognises this weakness. He says :

 It sometimes occurs that a man realises the enormous economies that can be effected by Nationalization with its centralization and administration, and the doing away of hundreds or thousands or thousands of duplicating and overlapping units of various sizes, but this very fact may cause him to ask where the doing away with all this duplication, wasteful as it is, may not result in a number of his fellows being put out of work. The first answer to this is that the gradual elimination of waste by centralisation and the formation of larger units of industry is taking place all the time by means of amalgamations and the formation of huge combines and trusts.

Thus he is unable to deny that increased unemployment results from centralisation ; but, because it goes on whether we like it or not, he advocates more of it! “A hair of the dog that bit him” is common-sense compared with such a misdirection of energy. While capitalism lasts the best thing that can happen to the workers is that their masters shall fail to see, or fail to introduce, economising processes, that more workers, not fewer, shall be required for the production and distribution of wealth.

It would be absurd for the workers to oppose economising processes, but they should most certainly not organise, or be led to support, them. A genuine working-class party would not waste its time and spread confusion among the workers by advocating either policy.

After the above admission by Mr, Davies he is obliged to make some attempt to solve the unemployed problem his policy would intensify. He therefore supposes that the nationalisation of a given industry would by more economical working displace 10,000 people. “In such a case,” he says, “the community would be no worse off in money if it pensioned off the whole of the 10,000 and paid them for doing nothing exactly the same wages they had been receiving.” Further on he says : “Of course you would not pension off these people, but you would utilise the big saving thus brought about to reduce the hours of all the workers in the industry, to improve wages, holidays, etc., and to reduce the cost of the article, commodity or service.”

In other words, instead of paying 10,000 people for doing nothing, the wages of the 10,000 would be spread over the industry, or deducted from prices.

Our author’s second proposition is almost as impossible of application as the first, because, in the first place, he concedes to the capitalist the privilege of continuing to draw dividends, disguised, it is true, as interest on bonds or loans. This interest must be paid out of the profits of the industry, and, consequently imposes at once the conditions that are most economical. In those services that have already been nationalised there is no such shortening of hours and improvement of conditions. State and municipal employees are no better off than other workers. In one respect some of them are worse off. When the State is the only employer in an industry the order of the “sack” becomes a serious matter,” as the late police strike shows.

According to Mr. Davies, however, all these obstacles will be swept away when the Labour Party controls. But until the Labour Party can disprove the current belief among the workers generally, that extravagant working of nationalised services is a burden on them, they will fail to obtain the necessary sanction and support to carry them through. The working class can no more move towards vastly improved conditions sectionally than the capitalist class can be forced, sectionally, from their dominant position.

All Mr. Davies’ schemes are based on the retention of the wages system, on the creation of surplus-value by the workers which an idle class will continue to appropriate and share. All his schemes get us no nearer to the abolition of the wages system; time passes, it is true, but time that would be far better spent in working for Socialism.

Nationalisation cranks are forced to admit that not all industries are fit subjects for State control. Some of them realise that certain industries and services are easily nationalised because the majority of capitalists are more or less dependent on them and could control them more effectively in their own interests through the State machinery.

Mr. Davies devotes a good deal of space to proving that other individuals and parties, besides the Labour Party, will, if it suits their interests, carry out Nationalisation projects. He says, for instance, “If Nationalization is necessary to keep Mr. Lloyd George in office, he will no doubt declare himself in favour of it.” Of so little importance is it, even to the capitalist class, that its adoption can hang on the personal ambition of one capitalist statesman.

Mr. Davies quotes a number of prominent Liberals in favour of Nationalisation, and incidentally calls attention to the “break-up” of the Liberal Party. He says the Liberals of the “strongly individualist type will go over to the Tories, the rest will form a right wing of the Labour Party. They will be extremely valuable in a party that is growing rapidly and sadly needs an accession of strength in the shape of persons of parliamentary experience and debating skill.”

Thus like all the labour crowd, our author is always prepared to compromise with the enemies of the workers to obtain objects only of value to the master class. He fails to see that the weakness of the Labour Party is entirely due to their failure to take up the Socialist position.

The workers, when considering Nationalisation, should not forget the lessons of the war. Government control, or Nationalisation, was the step taken by the executive power in order to economise in men, materials, and transport, so that the largest possible number of men might be available for the fighting line. In peace time, however, the men who would be displaced would merely swell the unemployed army and help to bring down wages.

Mr. Davies is so deeply concerned that the capitalist shall not suffer by Nationalisation that he devotes a good deal of space to the elaboration of schemes that would ensure to them a fixed rate of interest for a number of years with their capital intact at the end. He should listen to an ordinary House of Commons debate on unemployment, and if he has any sense of comparison his absurd consideration for a class that lives by robbery would vanish. With the Socialist it is not a question of compensation, but restoration.

The absurdity of working-class action for Nationalisation is apparent. Besides the enormous increase in unemployment admitted by Mr. Davies the supreme objection remains: the wages system is to retained. There has never been any advocate of Nationalisation sufficiently clear-sighted to recognise that before any improvement can possibly take place in the condition of the working class the wages system must be abolished. No system can be satisfactory to the intelligent workers that does not exclude all possibility of an idle class continuing to live in luxury on their backs. Nationalised industries competing with each other in a world market and paying interest to a class of idlers is merely a modified form of capitalism, possibly its highest form, dominating and exploiting even more ruthlessly than at present. Whether Labour’s blind—or corrupt—leaders succeed in establishing it or not, the workers’ historic mission still lies before them. They must organise to own and control the means of wealth production in their own interests, and not to create either dividends or interest for an idle class.

F. Foan