Editorial: Heartbreak House: The Swindle of Nationalisation. (1945)

Editorial from the October 1945 issue of the Socialist Standard

Leaders of the Labour Party, with the active support of the Communists, are putting over a monstrous deception on the workers in the mining and other industries.

If Conservatives were now in power they would be telling the workers that it is necessary for them to work harder in order to replace what has been destroyed by war and to produce articles needed owing to the present scarcity of coal, clothing, food, etc.

After the last war the same tale was told—and in due course the workers reaped the harvest of increased production in the shape of glutted markets, unemployment and wage cuts. Remembering what happened then many workers would now be sceptical about such propaganda if it came from Conservatives and the employers generally. They would suspect that they were again being tricked into sacrificing themselves for the benefit of capitalism and the profits of the capitalist class.

Now the propaganda campaign is in full swing again, but this time it comes from the Labour Party and Communists and it is baited with the pretence that under Nationalisation greater production will benefit the whole community and not the propertied class.

Mr. Michael Foot, Labour M.P., writing in the Labour organ, the Daily Herald (August 7th, 1945), puts the Labour Party case:—

“Partly owing to the war, there is a severe physical shortage of all the goods required to provide an abundant, life, and if that abundant life is to be assured in the future certain immediate privations will have to be endured in order to restock the capital industries. No Tory Government could make this appeal, for the worker would suspect that the summons to hard work, discipline and abstinence would result only in fortunes for the few and the later wastage of unemployment. The new Government is in a different situation. It also must appeal for hard work, discipline and, for a short period, continued abstinence. All these are needed to increase the total wealth for distribution, but a Labour Government at the same time can give concrete proof of its resolve to use this wealth for the benefit of the whole community. By its social insurance and health and housing plans it can show its determination to secure a greater equality in the distribution of wealth. By its nationalisation proposals it can show its resolve that the re-equipment of industry shall not merely bring greater profits to the few. By its financial measures it can prove that, when this period of shortage is over, no return will be allowed to wasteful unemployment.—(Daily Herald, August 7th, 1945). 

Mr. Foot in his article was answering criticisms made in the Economist, August 4th, the central point of the criticism being that if the owners of a nationalised industry receive as compensation the same income that they were drawing already there is no surplus from which the workers could receive higher wages unless (through more machinery, greater efficiency and harder work), the productivity of the industry is increased. Mr. Foot’s answer is that the Labour Government will get this greater productivity and it will benefit the workers and "not merely bring greater profits to the few.’’ (our italics).

The Labour Government having in the words of the Daily Herald, convinced the electorate "of its detachment from class interests '' (i.e., working class interests), and "of its devotion to the welfare of the whole community". (Daily Herald, August 1st, 1945), no longer adheres to its old propaganda in favour of drastically redistributing the national income in order to help the workers.

Instead it has taken over the familiar capitalist argument that the only way to improve the lot of the workers is to increase the total national income. Mr. Herbert Morrison clinched this in his speech to the National Conference of Labour Women on September 5th:—

“If we were to be able to provide better benefits under the social insurance measures, reduce taxation, and provide more of the goods of life for everybody, the only way was by increasing the total national income ... it could only be done by work, thought, drive and initiative."(Daily Telegraph, September 6th, 1945).

In the same speech Mr. Morrison justified himself by the plea that "there was a limit to what could be achieved merely by transferring money from one person's pocket to another’s,” and went on to explain why, in the interests of efficiency, the Labour Government holds it necessary to reduce taxation on the profits of the capitalists.

A few days later the Communist, Mr. Arthur Horner, National Production Officer of the National Union of Miners and President of the South Wales Miner’s Federation added his piece to the campaign. He told a Press Conference in London that he was asking the miners to increase output by 10 per cent. On the ground that The Mines are to be nationalised he

“asked the workers in the pits to adopt a new attitude . . . Hitherto the policy of the Union had been to get what they could out of the owners. Now they had taken on the responsibility of assisting in running the industry they must accept new methods. They must take a more active part in assisting greater technical efficiency and increasing output.”—(Daily Telegraph, September 7th, 1945).

This new emphasis on the capitalist doctrine that the workers can only get more by producing more, contrasts glaringly with what the Labour Party and the Communists were saying just before the war. Compare Mr. Morrison's statement now with the Labour Party pamphlet “The Nation's Wealth at the Nations Service.”—(Douglas Jay. Labour Party, 1938).

Mr. Jay wrote :—

“Labour's ultimate objective in economic policy is the removal of unjustifiable inequalities of wealth and opportunity by the transfer of private unearned income and capital into public hands. There exists something like £1,200,000,000 of annual unearned income in Britain to-day; and probably two-thirds of this is inherited income which the recipients have done nothing to earn or deserve.

Fortunes totalling nearly £600 million are left every year by private persons mainly to their own friend, and relatives, many of whom are already wealthy. Here is the available reserve and capital on which Labour must draw to supply the minimum human needs of the poorest . . . .”

He went on to say that “a far greater transfer of wealth can be achieved than any yet attempted, without any dislocation of the community's economic life.”

Another indication of the Labour Party's change of front is their present complete silence about, the “capital levy.” After the last war this device, which was offered as a means of transferring wealth from capitalists to workers, occupied first place in the Labour Party programme.

So much for the Labour Party since it has progressed from the pre-war political wilderness to the milk and honey of office.

Let us now consider what Socialists have to say about the whole problem of producing and distributing the articles needed by the community. Let it be emphasised once again that the Socialist case is poles apart from that of the Labour and Communist parties.

At present the means of production (land, factories, railways, etc.), are the private property of a small minority of the population, the capitalists. By virtue of their ownership they draw a large unearned income in the form of rent, interest and profit from the wealth produced by the working-class. The Labour Party's remedy for the poverty problem is (while leaving the greater part of capitalist, industry unchanged), to introduce a purely nominal change of ownership in certain industries that are to be “nationalised." Instead of receiving incomes in the form of dividend on shares in mining or railway companies the present owners will relinquish direct ownership and receive instead approximately the same capital and income in the form of Government stocks and the interest thereon, and the existing gross inequality of property and income will not be affected.

But there is a snag in this from the point of view of trying to run with the hare while hunting with the hounds. The Labour government have promised “fair compensation" to the owners in nationalised industries and are committed to enabling the capitalists in private industries to obtain a “reasonable return on the capital employed" (Sir Stafford Cripps, Daily Herald, August 13th); but they are in the dilemma of also having promised higher incomes to the workers which, under the conditions laid down, can only come from an increase in the workers' output.

The only real remedy is one the Labour Government cannot employ because they did not seek at the election a mandate to abolish capitalism. If capitalism were abolished and socialism introduced there would immediately be two big developments through which the poverty, problem of the working class could be solved by increasing the number of men and women actually engaged in production. One is that the members of the capitalist class, no longer able to live in leisure and luxury at the expense of the workers, would become useful members of the community helping to produce the articles needed by the community. The second is that all kinds of activities necessary to capitalism but unnecessary under Socialism would cease, and this would free millions of workers for production who are now engaged in banks, insurance companies, and advertising, or in the taxation and rating departments of the Central and Local Government; as well as those now required by the capitalists to serve in the armed forces for the competitive struggle with foreign capitalist groups. As is explained in our pamphlet "Socialism" the output of wealth could be at least doubled by these means.

This is the only way in which the poverty problem can be solved and the Labour Government, trying to run the capitalist system, cannot solve it. What they are doing is to act as Caretakers for the capitalist class, calling on the workers to increase output (just as a Conservative Government would have done), but using seductive arguments about “service to the community" which would only be justified if in fact the means of production had been transformed or were going to be transformed into the property of the whole community. While maintaining (with merely superficial changes), the system under which the capitalists exploit the working class, the Labour Government are pretending that exploitation has ended.

It is clever propaganda, but the realities of the class struggle between those who own, but do net produce and those who produce but do not own, will not for long be smoothed over by even the most plausible Labour-Communist orator. The working class faced with the same old ruthlessness of capitalist employers, of Government Departments and of the Boards of the Mining and Transport undertakings when “nationalisation" takes place, will find that they have no defence except the limited defence provided by their own trade unions. In strikes and lockouts the web of half-truths spun by the Labour leaders will be rent asunder, and the workers will have made an advance towards the necessary understanding of the fact that Socialism has nothing in common with Labourism.