Karl Marx was undoubtedly right when he said that the workers would seek every avenue of escape from the effects of capitalism before they turned to the only possible solution, the complete abolition of the capitalist system of society. Throughout the period of their history the workers have paid heed to all kinds of queer political notions, followed all kinds of political quacks and given allegiance to many political parties. They have plumped for Tariff Reform and for Free Trade, they have lent an ear to single taxers and to currency jugglers, they have supported Conservatives, Liberals, Labourites and others.
Towards the end of the last century a great new hope dawned in the minds of many. Industry should be controlled by the state and the state should be administered by the political party of the working class. Nationalisation offered a solution where all others had failed. Nationalisation, labelled “ Socialism,’ became the programme for which thousands of workers have since given their time and effort. With the workers’ own political party at the helm, controlling industry, most of the workers troubles should be swept away. Now, after a few years of nationalisation in some industries, the trick does not seem to have worked.
All the same, many workers cling to the idea that nationalisation does offer a solution to their problems. The failure, they consider, is not due to state control, but to the manner in which the state does the job. Some say that the rate of interest paid to the bondholders is too high. Some object to the large salaries paid to members of the various national boards. Others point accusingly at the lack of working class representation on the national boards. They still search for a way out where there is none. These proposals are mere tinkerings with surface effects and they offer no solution at all. If they were all put into operation the workers would not notice any difference in their living conditions.
A reduction in the rate of interest paid out of state controlled industries to the holders of bonds is not a practical proposition for a capitalist government, even a Labour capitalist government When an industry is nationalised, the act of parliament that converts it from so-called “private enterprise” to control by the state also sets out the terms of compensation. The rate of interest on the government stock issued to the former owners depends on the market conditions of the time. Two main factors will determine the level, the general level of interest rates throughout industry and the fact that the bonds issued are “gilt- edged,” that is, they are guaranteed by the government. The security that this guarantee offers will mean that the rate of interest, in most instances, will be lower than in company owned industry where no such guarantee exists.
The various national boards that manage the state controlled industries must have access to capital. To operate, to develope, to renew their plant, they must be able to raise funds. They can do this, through the government by the issue of stock. But if the rate of interest offered on this stock is very low, even taking into consideration the guarantee, nobody will be found to purchase the bonds. The attraction of higher interest rates in other fields of investment will determine that the investors of capital will turn their backs on nationalised industry. Just as a punter on a racecourse will turn from a dead cert if the gamble offers too small a return for his outlay, and will seek to place his money where he has the opportunity of longer odds.
If interest rates in nationalised industries are reduced no problem will be solved, but many will have been created. The workers have no guarantee that such a reduction would result in an increase in their wages. If they argue that the industry is too poor to afford the present interest rates, they are simply repeating the employers’ line that the industry is too poor to afford higher wages.
The real solution for the workers is not a reduction in interest rates on the capital invested, but in the total abolition of capital altogether.
Neither will a reduction in the salaries paid to members of the national boards offer any easement to the workers. The wages a worker receives are not determined by the amount that his employer pays to a manager. If the members of the national boards were deprived of all their salary, the workers would not necessarily get it. Even if they did, the amount per worker, when it was distributed, would be infinitesimal.
Greater representation on the boards and management committees of the nationalised industries is another will-of-the-wisp. The workers’ troubles arise from the capitalist nature of nationalised industry, not from the class origin of those who manage it. Whilst there is capital on the one hand and wage-labour on the other, there will be an incessant struggle between the two with the wage workers always at a disadvantage. No matter who is represented on the national boards, the general level of wage rates, like the general level of interest rates, will be outside their control. The need to capture export markets, the competition of like industries in other countries and the ever present need to produce cheaper will cause a constant pressure to be exerted on the workers' wages and conditions. This is an effect of capitalism. It matters not who administrates the system, it will not work in the interest of the working class. The workers can wriggle and twist and run after all sorts of hare-brained proposals, but they cannot escape the effects of capitalism whilst they tolerate that system.
Any plan, any scheme, any proposal that falls short of the abolition of the capitalist system is doomed to bring disappointment with a feeling of frustration and its attendant apathy. Ever seeking to improve wages results in continual adjustments to changing conditions of capitalism and little more. The 'sound line for the workers is to struggle for the abolition of the wages system. Without capital and without wages, men and women can work to produce wealth, not for the profit of a few but for the benefit of all.
W. Waters
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