“The Triumph of Nationalization” (1921)

Book Review from the May 1921 issue of the Socialist Standard

“The Triumph of Nationalization”  By Sir Leo Chiozza Money. London : Cassell & Co. 75. 6d.

The author of this book contends that but for Government activity the necessary supply of munitions and ordinary commodities could not have been maintained during the war, and to prove this he produces a vast mass of facts and figures, which he had excellent opportunities for collecting, showing how Government organisation succeeded where private enterprise failed.

It is with his conclusions rather than his figures that we are concerned. We agree with all he says about the increased productivity consequent on the swift development of machine production, and his admission that there has been no appreciable improvement in the lot of the worker in spite of it.

Already in Poverty and Riches our author has shown the existence of great wealth and great poverty side by side, yet he still does not, or will not, see that this is inherent in capitalism. He thinks, or at least he says, that mismanagement is at the root of the trouble, and that with better organisation, and without serious interference with the basis of society, the problem of poverty can be solved.

Sir Leo, although he has changed his political party, is still a politician with a “career” and a “reputation” to consider, and this prevents his demanding, with us, a fundamental reconstruction of society. Capitalism is based upon the robbery of the employed by the employing class; from that the poverty and degradation of the working class springs, and this it is which renders futile the suggested renovation of the old structure.

Compare our explanation of the existence of poverty with the eight reasons put forward by Sir Leo, who does not see that they are all traceable to one cause. His points are as follows :

1. The divorce from production of an increasing proportion of workers.
2. The poor technical equipment of many producers.
3. The defective organisation of producers.
4. The waste of work in competition.
5. The production of rubbish.
6. The production of luxuries.
7. Physical deterioration.
8. The lack of scientific education.

Owing to improved methods and the fact, that goods are produced for sale only to those who can pay for them, and not for use by all who need them, a decrease in the number of workers actually producing necessaries is inevitable.

Poor equipment there certainly is, but that is a question for the producer, who introduces up-to-date machinery and methods only if, and to the extent that, the immediate object of producing profit is concerned, and not for the worker, whose wages are not affected. Again, the anomalies produced by competition, which the growth of the combine will remove, should not be any concern of the workers. Will the removal of the absurdity of a thousand different types of plough by standardisation get better pay for the ploughman? As many workers live by the wastefulness of capitalism and can have no interest in economy, is it for them to assist the master class to exploit them more efficiently ? The production of rubbish and luxuries just as much as the production of necessaries allows the employer to make profit and the worker to earn wages, and, this being all they are interested in, they are equally indifferent to the eventual use of the product.

Physical deterioration, undoubtedly very alarming, is not the cause of poverty, as Sir Chiozza Money would have us believe, but is caused by it. Like the lack of scientific education, it results from the condition of present-day society itself, and the following statement by Prof. D. J. Cunningham serves to show that it could easily and rapidly be remedied :

  In spite of the marked variations which are seen in the physique of the different classes of people in Great Britain, . . . those inferior bodily characteristics which are the result of poverty (not of vice such as syphilis and alcoholism). . . are not transmissable from one generation to another.

The capitalist controls the means of health and education and will not give them to the workers unless it is necessary to do so for their continued exploitation.

The War

When the war broke out the capitalists were interested, as they always are, in making profits ; and “patriotism” was not enough to prevent their exporting oil seeds, nuts, fats, tea, etc. to the “enemy ” and producing poor quality munitions at fabulous prices. The Government, discovering that wars are not won in this way, competed in their own factories with private producers, Thus, on such things as T.N.T., 18-pounder shells, and machine guns, anything from 50 per cent. to 75 per cent. of the prices quoted by these patriots was saved. The Government’s system of costing alone saved £440,000,000, When we consider how many contractors have made fortunes out of this we can understand the bitter hostility of them and the newspapers which serve them to any kind of State production.

Compare the patriotism of the employing class, whose interests were bound up in victory, with that of the workers who had nothing to gain. When the latter asked for increases commensurate with the rise in the cost of living, they were threatened with coercion, backed of course by friend Henderson of the Labour Party. Within ten days of the staying of the German advance in the spring of 1918 the National Union of Manufacturers had a deputation waiting upon Lloyd George asking for the removal of restrictions on their profit-making.

It is impossible even to catalogue here all the Government’s activities in different branches of production, one can only say that they are faithfully recorded in Sir Leo’s book. He gives a conception of the potentialities of properly coordinated production, carried on by trained men, backed by the resources of the State, able to engage in scientific research under ideal conditions, and offers the immediate possibility of a five hour working day under the proper organisation of even existing forces.

Although proving the efficiency of State owned concerns so conclusively, our author does not show how nationalisation is of any benefit to the workers. State organisation may eliminate waste, but will it put an end to the robbery of the workers, the root of present evils ?

In Socialism, Utopian and Scientific, Engels long ago sketched the inevitable tendency towards State ownership and trustification, of which two remarkable instances are given in this book—the merging of the 700 banks of a century ago into the present 29, of whose deposits fire hold two-thirds; and the fact that in 1914-1915 £400,000,000 out of the £613,000,000 total profits of business went to public companies as distinct from private firms. But Engels wrote thus of the point on which our author is silent:

  In any case . . . the official representative of Capitalist Society—the State, will ultimately have to undertake the direction of production. But the transition either into Joint Stock Companies and Trusts, or into State ownership, does not do away with the Capitalist nature of the productive forces. The workers must remain wage workers, proletarians. The Capitalist relation is not done away with yet. It is rather brought to a head.

There comes a time in the growth of trustification where control can no longer be left in the hands of private persons, and the State is compelled, often in the interests of other capitalists, to step in and take control. The National Liberal Federation is recognising this. Exploitation continues, however, and becomes, owing to centralisation and improved administration, more intense than before.

Production being now carried on from top to bottom by paid servants, the capitalist is left without the pretence of useful service. The way is then clear for the workers to gain political power and organise production for use, for selves, the producers’

In short, our criticism of Sir Leo’s book is this: He proclaims the intention of demonstrating the superiority of Nationalisation over private enterprise. He succeeds, but omits to point out that Nationalisation is private ownership in another form. He proves that the State can produce with extraordinary efficiency and economy as compared with the present idiotic competitive method, but does not trouble to enlighten us as to the inevitable effect of this on the workers.

The benefit of reduction of waste will be reaped by those who own the machinery of production and consequently the products. Whether these owners be private employers or the capitalist class owning collectively through the State does not materially alter the position. The workers are still wage earners ; they are still robbed. While the wage relation remains—and Sir Leo does not even consider the possibility of removing it—the workers can have no vital interest in promoting technical and administrative improvements. The task before them is that of obtaining for their own use the means of production. When that has been done will be time enough for them to consider how best to use them.

Sir Leo, however, evades the question of ownership and deliberately confuses the issue bv such nonsensical phrases as “Socialism in Wool” the “Socialist Police Force,” and “Socialist currency,” and by the note appearing in the index to “see under Nationalisation” for information about Socialism. He endeavours to convey to the reader the impression that “Nationalisation”—that is, the centralisation of ownership by the capitalist class through the State—and Socialism—the expropriation of that class—are one and the same thing.

With a wealth of material at his command, Sir Leo fails to prove his case to the workers. The material can be used by us, but the book should be called “The Triumph of Organisation,”—it means nothing more.

Edgar Hardcastle