What’s behind the current strike wave? (2002)

From the February 2002 issue of the Socialist Standard

The media is desperate to discredit them, but what are the strikes by the railway and postal workers really about?

The media are trying to discredit the rail strikes by implying that it is just a cynical manoeuvre by rival pretenders to the crown of RMT general secretary. An internal TUC document was leaked to the London Evening Standard, in which one official opined that Bob Crow, the Leftist contender, “believes that strike action raises the class consciousness of the rank and file” (10 January), thus adding a “Red Scare” to their anti-striker arsenal. Unfortunately for the Evening Standard both they and “Red Bob” are wrong; workers do not go to the lengths of striking just to please machiavellian union bosses.

Sociologists studying unions have frequently commented upon how it is the type of industry that can determine the level of union organisation: the turnover in workers, the relations between workers in the workplace, the importance of an identifiable group of workers within the labour process.

Both the postal workers and the rail staff confirm this. They work in industries which involve mass co-operative human labour (relations in the workplace), which are technical enough to prevent them being easily casualised (turnover of staff), and which are social monopolies (key industries) which work stoppages are able to immediately shut down (being services, rather than commodity producing industries). Such factors put workers in a stronger bargaining position, which has itself caused the assaults on working conditions which have provoked the current wave of industrial struggles in reaction.

It is the essential nature of the services in these industries which has led to their being associated with state control. Arguments about state ownership and control over these areas can be traced back centuries (indeed, Adam Smith discusses this issue in his Wealth of Nations, and, indeed, favoured the “regulated market” approach which Blairites claim to be an innovation of the Third Way). These services have to be paid for somehow, but to allow them to be run on a totally free market basis would mean that their monopolistic power could lead to them charging at levels which would be detrimental to the interests of other capitalist firms. On the other hand, in order to attract investment they have to make sufficient return to make it worth investors’ while.

Failure of nationalisation

In 1945 the railways were nationalised, after twenty or thirty years of the capitalist class agonising over how to deal with the railways, and as a necessity of post-war reconstruction (See Socialist Standard, November 2000). This had the advantage of securing the existence of the railways, and bringing them within the system of “planning” that characterised immediate post-war capitalism. It also had the, unfortunate for the capitalist class, side-effect of concentrating the workforce into one huge unit. This effectively meant that the unions in those industries had the power to shut down the entire national system in support of their demands.

Along with two other factors, this led to “inefficiency” within the rail and postal industries. The first of these other factors was the nature of nationalised industries. Although they were in effect simply giant corporations in the usual mould, they had one significant difference. Unlike publicly quoted corporations, they were not subject to take-over. If a capitalist firm is run inefficiently, that is when the amount of profit it produces is low relative to its total capital, its share price falls, and other capitalists are able to buy its assets for a relative song. This spurs management on to keep the productivity of the workforce in line with its capital value and standard rates of industrial profit; and it also acts as a spur to investment in capital.

This lack of stimulus was linked to the nature of political control of the nationalised industries. Given that all parties were chasing working class votes, to hoodwink them into supporting capitalism, the political masters of these industries were reluctant to overtly lay-off workers from the nationalised industries. The tendency was, rather than increase the rates of exploitation, or attack workers conditions, to opt for the more politically expedient way and close down rails, coal mines, etc. when they became “uneconomic” (i.e. capitalistically inefficient).

What this meant was that, over time, whereas it had been expedient for capital to hand these industries to the state, eventually nationalised industry became a detriment to their interests. Firstly because inefficiencies due to inadequate investment in new capital in transport and mail were cutting into the profits of other sectors of the economy. Secondly, because the relative strength of the workers and their conditions had wider consequences of working conditions and labour discipline throughout the whole of the economy. Finally, these asset-rich industries were ripe for someone to make a profit from.

When privatisation did come, as a part of the Tories’ turning away from the “post-war consensus”, they moved to undo the disadvantages for capital of national pay bargaining. Part and parcel of the break-up of nationalised industries, was the introduction of trade union legislation banning support strikes in firms not directly involved in negotiations. This was necessary from the capitalist point of view, so that the huge unions which had amalgamated due to necessity faced with the concentrated power of national employers, could not strike across firms in order to protect their members. This was coupled with the deliberate breaking-up of national institutions (including the NHS) into smaller bargaining units, effectively paving the way for long term attacks on workers conditions.

Get rich quick

The other consequence of privatisation, especially in the rails, was the asset stripping of the industry. Since the amount of capital in the industry (especially land) had not been used “efficiently”, it proved to be a cheap source of profits for the new investors. Indeed, for the first few years, the amount given out in share dividends to the owners of Railtrack et al. were equal the amounts realised in sales of land and stock. Rather than realising profits from improved service provision and investment, the new owners sought profit in the easiest form they could (much in the same manner as the asset stripping of the former Soviet Union’s industries).

Alongside this, “overmanning” was attacked, that is, the new management tried to increase the rate of exploitation. Mostly, this involved laying off staff wholesale, leading to a big decrease in the number of signalling staff, as well as drivers. Many of the staff were transferred into subcontracting firms, which subsequently clouded the chain of command with regards to maintenance, but which in the short term allowed workers’ conditions to deteriorate.

These cutbacks have led to a desperate situation. Arriva trains in the Northeast have found themselves short of sufficient drivers to meet their commitments. As has been shown in Scotland, a simple overtime ban has been sufficient to cripple service there. Across the country, the rising wages of drivers relative to other rail staff has been the immediate cause of the South West Trains dispute (leaving aside the disciplinary grievances). It is hardly surprising, then, that the state is offering to come to the industry’s aid, by subsiding the training of drivers with a new academy, to take this cost of their labour off their shoulders, and restore the level of drivers needed.

This short sighted increase in the rate of exploitation did not, for several reasons, lead to an immediate increase in profits. Firstly, the big bulk freight contracts declined along with the demise of the coal and steel industries, a situation not helped by the second factor, which is that successive governments have consciously followed a policy of preferring roads to rail (after all, the car industry needs propping up). Rails need more maintenance and manpower to keep running that do ordinary roads, so in competition between the two the latter comes out better (especially when its costs are disguised into general taxation).

Transporting labour-power

The most important commodity carried by rail at present is labour power, in the form of commuting workers. This aspect remains vital for many capitalists, particularly in London, since housing prices within the city prevent workers from dwelling near their workplaces. What this does mean, however, is that transport prices feed directly into the price of labour in many areas, and any rises in transport prices cut the profitability of the firms who rely on the rails for labour delivery. Hence why transport becomes such a key issue, and the capitalist class is so willing to countenance state intervention in the rail industry.

The fact remains, though, that the unions remain strong enough within these sectors to resist attacks to a certain extent. Despite being hampered by law and the break-up of the industry, the big unions can co-ordinate their campaigns, and exploit political embarrassment to try and get their way. The problems are such that the rail operators may soon decide it is worthwhile giving national bargaining another try as a way of keeping workers under control. Likewise, the Post Office, now ridiculously renamed “Consignia”, may have to think again about their proposed mass sackings of workers, in the face of a concerted union resistance.

Given, though, that the capitalists have used the issue of nationalisation or privatisation as the grounds for their alteration of policy over industrial relations and an attack on working conditions, it is understandable as to why many workers will see the debate in those terms, and their own interest lying with nationalisation. Hence they may be willing to believe that people calling for nationalisation represent their interests. The nationalisation debate, however, is simply one that occurs due to the incapacity of the market system to contain the contradiction between the need for ever more integrated social labour, with private property and market relations. Re-nationalisation will not remove the question of investment costs and running of the railways that have led it into such a parlous state, and will just lead to a repeat of the centuries old story.

Likewise, success through striking may well encourage other workers to stand up for their rights in the workplace more. A group of workers’ strength, however, will continue to be determined by their position within the capitalist economy, and their victory a partial one within the market system. Only by looking to the political situation, the reality of class ownership and power within capitalism, and organising to make themselves a party to the political battle in the name of common ownership for their mutual needs, will a general gain come to workers, and an end wrought to the need for these sectional battles. Otherwise, the ultimate result of the strikes will be the need to strike again in the future.

Pik Smeet

Editorial: Nationalisation or Trust Busting? (1952)

Editorial from the May 1952 issue of the Socialist Standard

While capitalism in Britain, Continental countries and the British Dominions has gone in for a certain amount of nationalisation and Russia has carried it to the point where all important industry and about half of agriculture is run under the State, capitalism in America has followed a different policy. In Britain Liberal and Tory governments in the 19th century nationalised telegraphs and telephones when the capitalists as a whole felt their interests adversely affected by those two services being in the hands of private monopolies. For the same reason Gladstone in 1844 was responsible for the first Act giving die government power to nationalise the railways, a power that was not used because the government held that the mere threat of it served to keep the railway directors in check.

In the United States nationalisation has so far made little headway as the capitalists have preferred to use Anti-Trust laws as a means of curbing too-powerful monopolies.

Because of the pre-eminence of the United States in world production and because private capitalism still holds the field there, more than half of world production, transport, etc., is still in the hands of private concerns. This applies to basic industries such as coal, steel, food, rubber, oil, textiles, motor cars, railways, shipping, road transport, telephones and telegraphs, banking, insurance and manufacturing generally.

In the past few years nationalisation has had a certain set-back in a number of countries and British capitalism, following the American example is now experimenting with the Monopolies Commission as a means of checking monopoly; both the Conservatives and the Labour Party being committed to developing this line of attack.

But this does not mean that the Anti-Trust legislation in America has fulfilled the expectations of those who backed it. Loopholes in the law have enabled the big monopolistic group such as the American Telephone and Telegraph company with its concentration of telephone services and the manufacture of equipment, to go on expanding. When an amending bill to the Gayton (Anti-Trust) Act of 1914 was being debated on 15th August, 1949, Congressman Celler, New York, stated that between 1940 and 1947 more than 2,500 formerly independent concerns had disappeared as a result of mergers and acquisitions, and that “two hundred and fifty concerns now control two-thirds of the industrial facilities of the country that were controlled by 15,000 companies before the war.” He added, “The anti-trust laws are a complete bust unless we pass this bill.” (“Labor and the Nation” New York, September-October, 1949.)

Most of the demand for action against the Trusts and for amendments to strengthen the laws comes of course from the small traders and businessmen.

In addition to the Anti-Trust laws the charges that may be made in America by such services as the telephones and telegraphs are subject to regulations issued by the State Utility Commissions and the Federal Communications Commission. If complaint is made that charges are too high these bodies are empowered to investigate whether the companies are making an unduly high profit. The companies may and, of course, do appeal to the Courts against Commission rulings. In 1934 the American Telephone and Telegraph company reported that through adverse court decisions one of its associated telephone companies had the prospect of refunding 20 million dollars to subscribers.

One of the leading anti-trust politicians, Senator Benton, spoke on the Trusts to the Anglo-American Press Association in Paris in November last He maintained that in Britain the electors have had to choose between nationalisation as advocated by the Labour Party and the Conservative policy of leaving industry to private monopoly, and that if American electors had the same choice they “would line up for Government ownership" and that by an overwhelming majority. (Manchester Guardian, 8.11.51.)

He also made the curious suggestion that if Marx were alive today “he would certainly have approved" of American capitalism though not of the “cartel-ridden capitalism of Europe.”

But later on the same Senator Benton charged that the British Imperial Chemical Industries group “has a deal with the DuPont firm not to go into the United States.” (Daily Mail, 22.11.51). As this must be a violation of the American Anti-Trust laws it suggests that the laws are by no means as effective as the Senator believes.

In the meantime the alternative capitalist method of dealing with monopolies by nationalising them is under fire in Great Britain where the Conservative Government, having disowned responsibility for the rise in railway, etc., fares, now professes to discover that under the Act which nationalised the railways the government has no power in the matter of fares except to refer them to the Consultative Committee which can merely make recommendations. A group of Conservative M.P.'s are now therefore proposing an amendment to the Act to enable the government “to put the Transport Commission under more effective Parliamentary control.”

It need only be added that whether nationalisation is carried very far, as in Russia, or much less far as in Britain, or whether the government relies on Anti-Trust laws as in America the state of the mass of the population continues to be that of poverty existing alongside the great wealth and large incomes of the privileged few.

Nationalisation — the turning point (1966)

From the February 1966 issue of the Socialist Standard

It is now clear that the Labour Party's attitude to nationalisation resembles that of a woman towards her husband after she has seen him for the first time without his false teeth and wig.

Labours’ love affair, and the subsequent honeymoon, lasted a long time. In a past which it would prefer to forget, it has declared for nationalisation of, among other things, banking and credit, water, agriculture, iron and steel, shipping and shipbuilding, chemicals and insurance. At their 1934 Conference Herbert Morrison advocated a programme of persistent nationalisation ". . . until within a reasonable time we are substantially masters of the economic fabric of the community and the means of production and distribution". And of course there is the famous Clause Four, still there in the Labour Party Constitution, which is a commitment to nationalise all British industry and commerce.

They were heady days, when Labour leaders often spoke with the delirium which comes from spending too much time out of power. Since then, their ardour has declined; the 1945 government pushed through nine major nationalisation Acts and the list of candidates for state control has now dwindled into almost nothing.

Those nine Acts of the Attlee government were the high spot for nationalisation. Labour Party propaganda during the 1945 election was clear about the intention to nationalise, although it put special emphasis on the coal mines—and with good reason. It was easy enough to prove that the miners had suffered under the private owners; the Labour Party drove the point home with plenty of pictures of idle mining villages and unemployed miners picking on slag heaps for scraps of coal. The implication behind this was that the way to solve unemployment in the coal industry was to nationalise the mines. (This was still Labour’s case in 1959, when their election manifestos claimed "The nationalised industries are one of the country’s main defences against unemployment.’’) Subsequent events have shown up this line of propaganda for what it is.

Labour's 1945 election machine faced obvious difficulties in putting a similar case for taking over other industries. There were, for example, no authentic old photographs of starving clerks from the Bank of England raking with their umbrellas among the dustbins of City restaurants, it was very hard to stir anyone’s emotions over nationalising the Bank and in any case as the late Lord Pethwick Lawrence, who was a member of the Labour government, put it, it was ". . . already very largely a department of the Treasury and its nationalisation will not make a pennyworth of difference to the bulk of the people . . .”

But however little the difference it made, the Attlee government pushed on and by 1951 the State had taken control of the Bank of England and of Civil Aviation, Coal, Cable and Wireless. Transport, Land Development Rights, Electricity, Gas and Iron and Steel. The programme had been fulfilled. We had, apparently, at last reached the Promised Land which Labour pioneers had sung and worked and sulfered for.

In all the excitement, it was inevitable that certain facts should escape popular attention. In the first place, the Labour Party had no patent on nationalisation. Even in 1945, there were plenty of State-run concerns to testify to this fact. Some were like the Post Office, the public houses and the brewery in Carlisle, and the B.O.A.C., which were all examples of complete nationalisation carried out by a Conservative government. Others were cases where the State had a powerful influence, as in the British investments (again the work of Conservative and Liberal governments) in the Suez Canal and the (then) Anglo-lranian Oil Company. As the Industrial Editor of The Guardian once put it. ". . . public control in 1947 was nothing new.”

Secondly, the real motive for nationalising certain industries had nothing to do with the conditions of the people who worked in them. The Reid Report on the mines, published in 1945, pointed to British industry’s dependence on coal, and to the poor state of the mines under private companies. It also showed how the separate control of many collieries prevented valuable coal seams from being worked to the full, and how the old coal masters could not hope to invest the massive amounts of money the mines needed to put them on their feet.

What this amounted to was the industrialists of Britain in 1945 needed coal desperately and, whether it was by nationalisation under a Labour government or by State control from the Conservatives, they were going to get it. After nationalisation, enormous amounts of money were pumped into the State industries. A National Coal Board publication — The Root of It All — of 1950 said that it was then proposed to invest some £520 millions in the mines. In other spheres it has been the same story: in 1964 the nationalised electricity industry was investing enough money in its equipment to build the Channel funnel every ten weeks. By 1967 it plans to he using up £2 millions every day.

The hunger of the massive, basic industries for capital is still one of the arguments used to justify State control, the While Paper on the steel industry published last May said:

  The iron and steel industry occupies a focal and dominating position in the British economy . . . A single new large integrated works may cost £ 150 million . . . There are difficulties in raising private funds for projects of this sort which lake many years to complete and which, when completed, have to go through a long commissioning period before they can earn a return on capital sufficient to attract private enterprise.

The gratitude which the capitalist class feel for all that the state concerns are doing for them was expressed by Lord Chandos, who was once a Minister in a Conservative government, when he spoke up on 8th January, 1962:

  Nationalisation of a fairly substantial sector of industry has come to stay . . . As an industrialist I want cheap fuel and reliable supplies and I believe that with a little more working together that is what (the National Coal Board) will secure for us.

Now it is reasonable to say that, if the nationalisation which the 1945 Labour government introduced had had the effects which they promised (perhaps expected, even), if it had indeed opened the road to the Promised Land, then the Labour Party would have had every reason to make it a larger and larger part of their election programme, for it would be one of the greatest vote-catchers ever.

But the opposite has happened. Nationalisation of the land has gone forever; it is not even discussed any more at Labour Conferences. At one election after another, the nationalises’ shopping list has grown shorter. In 1955 it covered only steel, road haulage and sections of the chemical and machine tools industries. By 1964 this had shrunk to steel and water supply. And now it is clear that, despite the government's hand-on-heart declarations, steel nationalisation is all hut forgotten, there was no mention of it in the last Queens' Speech; as James Margach wrote in the Sunday Times of 9th January last, “. . . the Steel Nationalisation Bill is further away than ever.’

Whatever this retreat proves about the Labour Party's readiness to abandon what it once called its cherished principles, there should be no regret at the passing of nationalisation. It had little to offer the people who get their living in the State industries; “. . . the Postmaster General,” wrote a postman's wife to the Manchester Guardian (6.5.54). “Gets the most important work done by almost slave pay and labour." At the time that letter was published, the National Coal Board was also doing its best to dispel any delusions about the Promised Land by claiming damages of over £60,000 from some miners who had been on unofficial strike.

The Labour Party's claim that nationalisation is a defence against unemployment has been defeated by the widespread cuts by British Rail, and by the National Coal Board’s programme of closing pits and sacking workers. Only half as many pits are working today as there were when the National Coal Board look over; since 1957 the number of miners has been cut from 700,000 to 450,000 and the number of clerical and administrative staff has been reduced by ten thousand. More cuts are planned.

Many workers in the mines and the railways have been sand-bagged by the cuts, as well they might be. In 1956 the National Coal Board was planning to employ 672,000 miners by 1965 and to be producing 250 million tons of coal by 1970. But the rapid contraction of the market for coal, under pressure from other fuels, has left the industry lighting desperately for a 1970 production quota of 170/180 million tons under the National Plan and has forced it to cut its work force.

The reason for this is that nationalisation does nothing to solve the economic and social problems of capitalism. State industries have to employ workers, and to dispute with them over their pay and conditions. They also have to sell their products, often in competition with other industries in this country or with those abroad. They are, in other words, just as dependent on the anarchies of capitalisms’ markets as private industry. The class division of society remains unaffected by nationalisation; indeed. Labour spokesmen continue to make propaganda out cf the fact that, in the words of one of them, "One per cent. of the population stills owns about 50 per cent. of the nation's wealth," — as if this was not one of the problems nationalisation was supposed to solve.

It would be foolish to pretend that the decline in support for nationalisation is due to a widespread appreciation of these facts. Many workers passionately believe that the highest form of industry is a profitable one and, equally misguidedly, think that State industries fail to make profits. In fact, these industries often make large profits from the exploitation of their workers but their obligation to provide for fixed interest payments also often turns a working surplus into an accounting deficit. In 1962, for example, when the National Coal Board declared a deficit of over £13 million, Lord Robens pointed out that had they been a “normal commercial company" the mines would have declared a dividend of 2½ per cent.

The result of all this is that nationalisation has become something of an embarrassment to the Labour Party, connecting it in the voters' minds with trains which are dirty and late, or coal which is scarce or electricity which is dear. A Colin Hurry poll in 1959 claimed that 63.5 per cent. of the electorate was opposed to more nationalisation, and that 30.7 per cent, of Labour voters also thought that way. An Aims of Industry poll in 1964 concluded that 49.7 per cent. of the electorate, and 23 per cent. of Labour voters, were against nationalisation in principle.

The present seems, then, to be something of a turning point. The British capitalist class are now clear that nationalisation has gone far enough and that there must be no more of it for political reasons. At the same time, they recognise that it is in their interests for the State to have a say in important industries like iron and steel. Future state intervention will probably be in the form recommended by the Plowden Committee for the aircraft industry, with the government acquiring large or majority shareholdings, bringing off mergers—or perhaps break-ups—and generally having a say in the policies of industries which affect the fortunes of British capitalism as a whole.

Nationalisation was once offered as a cure-all, as the road to prosperity. Since then it has been replaced as speechwriter’s favourite by Science and Technology. How long will it take before this, too, is exposed as another sham designed to cover up the fact that there is no way of solving our problems short of changing society?

Ivan

Nationalisation’s problem child (1966)

From the February 1966 issue of the Socialist Standard

The British Post Office, oldest of the Nationalised industries and at one time the favourite child of the enthusiasts for Nationalisation, is now under heavy fire. Its critics can find nothing good to say about it: the charges are too high; postal, telegraph, telephone and counter services are all said to be bad and getting worse. Correspondence to the Press and questions in Parliament are full of complaints of delayed transmission of letters, too few collections and deliveries, telephone waiting lists, wrong numbers and overloaded lines, parcels held up or strayed and so on.

Some of the criticisms are reasonable; most are wrongly directed; and some are simply dishonest, like the tongue-in-the-cheek Editorials about the discontinuance of Christmas Day deliveries, in newspapers which in England this year missed publication for three days on end. The same newspapers, most of which were sold at a Penny in 1939 and now cost fourpence for a smaller issue, think they are entitled to condemn the letter rate although at fourpence it is less than three times the pre-war penny halfpenny. The critics have their suggested remedies, including straight denationalisation, splitting the posts from the telegraphs and telephones, and handing both over to boards like those operating the railways and mines. In the meantime the Post Office itself has its organisation under independent critical examination, and the Parliamentary Committee on Nationalised industries also has the Post Office on its agenda.

All of which must make sad reading for the older enthusiasts for Nationalisation in the Labour Party and ILP, who campaigned for years on behalf of the Post Office as the best of all possible organisations, as the guiding light for all-round State ownership and indeed as the example of Socialism itself. Only the SPGB is not, and never has been, in these struggles over issues totally irrelevant from the Socialist standpoint. The Nationalisers were wrong at the start, and the developments of capitalism have overwhelmed them, made nonsense of their prophesies and reduced them to their present state of confusion. '

Some Nationalisers never imagined that Nationalisation had anything to do with the Socialist aim of getting rid of capitalism and inaugurating a Socialist system in which the means of production would be the common property of society and in which goods would be produced and services operated solely for use, without rent, interest and profit, without buying and selling: for them Nationalisation was merely a way, a supposedly better way, of running capitalism. They thought it would be so efficient and profitable that it would compete private enterprise out of existence and be universally accepted as the normal form.

The late A. Emil Davies. Chairman of the Railway Nationalisation Society was one of these. In his The State in Business, first published in 1914 and issued in a second edition in 1920, he thought his battle was well on the way to victory. One of his beliefs was that "it is apparently only a question of a year or two” before the American Government would take over the American telephone companies. Not only have the American telephones not been Nationalised (well over half the world’s telephones are still operated by private companies) but the battle-cry of the de-Nationalisers in Britain is "Why can’t we have a telephone service as widely developed and efficient as the American?” But it really has little to do with the sterile controversy about the supposed merits and de-merits of State versus private capitalism. Much more important is whether, as in America, investors’ money has been readily available for telephone development, or whether, as in Britain successive governments, until quite recent years, were not able or willing to provide it. Russia, for the same reason, is even further down the scale of telephone development but in Brazil the opposite is true. The private company has not been able to raise money from investors and the Brazilian government, as reported in the Times (23.12.65), is nationalising the telephones precisely in order to speed up expansion.

What nearly all the critics of the British Post Office forget is that in a quarter century of inflation and rising prices, Nationalised industries were no more able to operate profitably without raising charges than were private companies. They also overlook the fact that in a period of low unemployment, and of absolute shortage of labour in some areas, the Post Office, like other services requiring Saturday and Sunday work and awkward attendances, cannot well compete with five-day jobs, often better paid, in factories: the Post Office had no such problems when unemployment ranged up above the million level.

Some of the early campaigners for Nationalisation, unlike the “non-political” Emil Davies, thought they were striking a blow for Socialism. Because they could not see early success in winning over the working class for Socialism, they supported State enterprise because they thought it would provide a simple centralised organisation easy for eventual incorporation into Socialist society. Their error was in forgetting that the work of gaining a Socialist majority was not helped but made more difficult by the confusion they created.

They were driven into one contradiction after another. Having claimed that Nationalisation is Socialist and that the Post Office form of it is the proper one they had to explain away how it was that Tory and Liberal Government nationalised the telegraphs and telephones and that it was Gladstone (at that time Tory Chancellor of the Exchequer) who in 1844 got Parliament to pass the first Act giving the Government power to nationalise the railways.

They failed to understand the role Nationalisation played in capitalism, and that it is one of the ways in which the general body of capitalists protects their interests against sections of their own class who, through monopoly or through concentration in the most profitable areas and neglect of the others, hold the general body to ransom. Gladstone in 1844 understood this quite well. The railways, as the most efficient means of transport, were indispensible to manufacturers and traders, and Gladstone’s Act was meant as a threat to them that unless they refrained from exploiting their monopoly the Government would take them over. Posts, telegraphs and telephones presented a special aspect of the same problem. Private organisations were quite willing to operate in the profitable urban areas but had no interest in providing the nation-wide service which industry and commerce needed. Churchill had the same idea in mind in 1943 when he spoke of ‘‘a broadening field for State ownership and enterprise, especially in relation to monopolies of all kinds” (Times 5.4.43).

The same purpose, that of protecting the interests of the general body of capitalists, is aimed at in America by the anti-trust laws and by the Government’s control over telephone and other charges through the Federal Communications Commission, and in Britain by the anti-monopoly laws and laws against re-sale price maintenance.

But capitalist interests are divided and the sections adversely affected by anti-monopoly laws or by Nationalisation fight back. The manufacturers of telephone equipment have long campaigned to get the telephones freed from direct government control. They believe that the desire of governments to use the Post Office as a means of raising revenue has been a cause of starving the telephones of money needed for expansion and that if this control were removed a big new demand would open up for their products: they look with envy at the much greater telephone developments in USA and elsewhere.

In the Nineteen-thirties they found allies in the leaders of the Labour Party who also turned away from Government department Nationalisation. So then we had Lord -- then Mr. Attlee, a former Postmaster General and later to be Labour Prime Minister, discovering that the “socialist” Post Office was “the outstanding) example of collective capitalism” (New Statesman 7.11.31). The campaign was led by the late Lord Morrison who advocated a form of organisation like that in the Port of London Authority though he had himself in 1923 described the same PLA as "a capitalist Soviet . . . the constitution of which is thoroughly objectionable from the Labour and Socialist point of view.” The late Mr. Lees-Smith who had been Postmaster General in a Labour Government, also, in 1931, wanted “the Post Office, or at least the telephones under a public corporation like the Port of London Authority.” He, like Attlee, had discovered that this was “the latest development in socialist theory.”

Post Office Act, 1961

The Post Office survived that campaign to get it away from direct governmental and parliamentary control but in recent years, following the setting-up of the Boards for railways, mines, gas and electricity, steps have been taken in the same direction for the Post Office.

The Post Office Act 1961 was intended to make the Post Office into a “commercial undertaking,” and free it to a large extent from the direct financial and other control by the Exchequer. Now further changes are likely, thus completing, a series of adaptations of the Post Office to the needs of capitalism; from the earliest phase when it was an organisation for conveying “the King’s Posts,” and the period when it was simply a means of raising revenue for the Government; and the era after the Penny Post of 1840 in which the purpose was both to raise revenue and to be a communications service for industry and commerce.

It is at present required to aim at an 8 per cent. profit on invested capital, but always some profit has been expected. As a Select Committee ruled in 1888 “it is most likely to continue to be conducted satisfactorily if it should also continue to be conducted with a view to profit, as one of the Revenue yielding Departments of the State.” (Which has its echo in Russia to-day where the economist Leontiev, wrote in Pravda of “the commonly accepted necessity of a sharp increase in the role of profit as the most general indicator of the effectiveness of a factory’s work”—(quoted in the Observer 4.4.65).

It was one of the illusions of the early Labour Party and ILP advocates of Nationalisation that when the government took over an industry they would have access to enormous profits and could benefit the workers by paying above average wages to their own employees and by reducing charges and running the industry purely as a “public service” without profit.

The idea was encouraged by the original intention to take over the industries without compensation and as late as 1925 this was still being debated at an ILP conference where it was opposed by, among others, Attlee and by Dalton who was to be Chancellor of the Exchequer. The dilemma they were in was that the Government which confiscates one lot of investments will immediately find that capitalists will cease to invest in any other security liable to confiscation, and a government administering capitalism constantly needs to raise money from investors. Having then decided that they must compensate the former shareholders they ran into the next dilemma—that when they have a declining industry on their hands they still have to meet the compensation payments. In private hands the investor in, say, a coal mine simply loses his money if the mine goes bankrupt, but the government’s liability to meet interest payments on the Government stocks given to former mine owners continues even if all the mines are closed.

As regards the supposed possibility of helping the workers through lower prices (even if the lower prices had been practicable) the Labour leaders overlooked the fact that wage levels themselves largely follow price movements. And the idea of paying Government employees more than other workers was equally remote from reality.

In short their understanding of the only means of achieving Socialism — by the conscious act of a Socialist majority displacing the capitalist social system was as lacking as their real understanding of how capitalism works. So it took over forty years of experience to land them in the present position, of having abandoned all their early ideals and misconceptions only to accept instead all the traditional rules about how capitalism has to be run.

As far as they are concerned the idea of there being a real alternative to capitalism, a Socialist social system, is gone and forgotten.

B.S.

Press Cuttings (1947)

From the October 1947 issue of the Socialist Standard

Strikes in Nationalised Industries

"The Grimethorpe strike has raised, in an acute from, the question of discipline in a nationalised industry.
  Trade union theory has never surrendered the right to strike, after due notice given.
   It has been held to be the last sacred sanction of organised labour against injustice.
  But it is against private employers that this right has been so sturdily maintained.
  Is the situation the same when, as in the coal industry, the employer is the nation?
 And can the State run industry effectively if the right of the workers to defy its authority with impunity is to be recognised ?
  "No” would seem to be the answer to both these questions. And, unless agreement can be reached on this basis, nationalised industries run grave risks of coming to grief."

(Mr. Ernest Thurtle, Labour M.P., writing in Sunday Express, 14/9/47.)

Mr. Thurtle now wants the right to strike to be withdrawn from workers in nationalised industries. Long ago, before the Labour Party came to power, the Labour Daily Herald admitted that if the price of nationalisation is that the workers lose their only weapon, the strike, then, “under capitalism a nationalised industry would actually be worse off than those left in private hands." (13/9/22.)


New Russian Imperialism in Persia

Moscow radio last night disclosed that the draft Soviet-Persian oil agreement which the Persian Premier, Qavam es Salteneh, declined to submit to Parliament, contains a special article granting concessions to the proposed Soviet-Persian oil company, in addition to the agreement signed in 1946 for the company’s creation.
The new article provides “preferential rights for the Soviet Union regarding the purchase of oil products exported by the company” in which Russia is to hold 51 per cent, of stock, the broadcast said.
It also provides for the company to import duty free and without licence “equipment necessary for its work” of exploiting oilfields in North Persia.

(News Chronicle, 25/9/47)

Private and Public Myths (1988)

From the December 1988 issue of the Socialist Standard

The Left-Right divide in this country and many others tends to focus on questions about just what should be in the public domain and what should belong in the private sector. In other words, about the extent and nature of the state's role.

In Britain since 1979 the Government's policies have been aimed at "rolling back the frontiers of the state". The Labour Party however has a preference for certain activities and issues being under the control of Government. not in private hands but in the public sector.

A similar political divide exists in many other countries, where the extent of the state's intervention in the economy and involvement in welfare services distinguishes parties of the Right from those of the Left. This key division on how to run the capitalist system has to be of interest to us.

This is not just because policies of state intervention in the economy or commitment to state responsibility for welfare and social services are normally labelled "socialist" both in the media and in the rhetoric of capitalist political parties. We have frequently explained that socialism is very different from these allegedly more efficient or more humane forms of capitalism.

Any arrangement which leaves most of us having to sell our labour-power in order to scrape a living is not socialism. This point is more than a mere question of the "correct'' definition of yet another political issue. The claim by Labour and other reform parties to have socialist policies has the effect of establishing as fact what is in reality a propagandist myth. This bogus claim bypasses and blurs the essential differences between capitalism and socialism: wage-labour, commodity production, class struggle — all these characteristics of capitalism, however "reformed" and whatever the extent of state control of the economy, will have no place in a socialist society.

Having said that, it is still worth giving some thought to the argument for state or "public" control of certain activities. The case for justifying "public" as opposed to "private" ownership is mostly based on the belief that the activity in question is simply too important to be left in private hands.

Foreign policy, for instance, is normally regarded — even by Thatcherites — as definitely a matter for governments, not the private sector. The really shocking aspect of Irangate was neither the misuse of public funds nor the constitutional problem of the President acting illegally. The "most chilling aspect of the scandal (was) the revelation of an off-the-shelf, stand-alone, self-financing entity which was in the process of being set up to conduct covert foreign policy as private enterprise" (The Economist, 24-30 September 1988). For The Economist, this was incomparably worse than trading arms for hostages, diverting funds to the Nicaraguan Contras, flouting Congress and Senate decisions. or brazen lying about the whole business. The sacrosanct division between what must be public and what ought to be private, if flouted, provokes extremely strong gut reaction.

Take these other examples of the view that certain matters are best in the public sector: water, education and the road system. In Victorian Britain urban water supplies were polluted and cholera epidemics were rife. The expensive and unprofitable task of supplying clean water for major population centres was undertaken by the government.

Similarly the necessity of educating the masses — which the profit-seeking private sector and under-financed religious and charitable organisations were evidently unable to do — became a function of Government, paid for as a collective cost from taxation. The construction and maintenance of highways, tunnels and bridges is also in modern capitalism typically regarded as a public sector service. Regardless of whether the work is carries out by local authorities' Highways Departments or is contracted out to construction and civil engineering firms, it is paid for as a collective necessity from taxation.

In each case the central argument is that water, education, highways and the like are of enormous public importance; so useful and valuable as to be thought essential. Because of this, such matters cannot be trusted to profit-seeking entrepreneurs. The cynic is said to be a person "who knows the price of everything and the value of nothing".

This is also true of the average Board of Directors, and especially true of accountants, company secretaries or auditors. For them the bottom line is what counts: their function is to ensure that their capital investments earn a profit. They are not in the business to serve the community unless, by coincidence, this can be done without harming profits.

In today's political climate it is argued that such public services as water supply should be privatised and made to operate profitably. Privatisation of water authorities means, as film director David Puttnam argues, that "rivers are becoming commodities. A free gift of nature is being converted into a commodity from which you can make profits" (BBC 1, 2 October 1988).

Privatisation is essentially a process by which control of many socially or economically important activities is transferred from elected bodies or organisations responsible to Parliament, to private companies responsible to the interests of their private or institutional shareholders.

Water supply however is the most basic and essential economic activity possible in terms of human needs. Physically we cannot survive a week without water. Falling levels of water in rivers or reservoirs have harmful effects on agriculture, requiring irrigation, on power supply which can be dependant of water; and on many industrial processes.

Inefficiency or cost cutting in water supply will have dangerous consequences for the health of the community, as was recently demonstrated in the West Country. Cost cutting on labour meant that a lorry driver delivered a load of chemicals to an unattended waterworks and poured the chemicals into the wrong tank. This caused serious pollution of the water supply. Many people suffered ill effects; some animals died, as later did fish in the rivers to which the Board diverted their poisoned water. It is expected that the commercial pressures on the water supply industry after privatisation will make pollution control less effective.

However the problem is not so much the issue of private as compared with state control. The real problem is that whoever runs any sort of service or industry within the capitalist economy is operating under pressure to do the job as cheaply as possible. Water supply, health services, education, housing: whether public or private sector, all in the end are subject to capitalist priorities.

Those who believed that nationalised industries (coal. British Rail, electricity supply) would operate free from commercial pressures were mistaken. Costs had to be kept low and workers, while spared some of the worst excesses or private ownership (after nationalisation coalmining accidents were reduced, for example), were still exploited wage slaves, having little say in how the industry operated and very little control over their working conditions.

Workers in nationalised organisations also had a significant disadvantage in pay negotiations. In times of inflation postwar Governments imposed "pay policies" or wage freezes. Public sector employees bore the brunt of such policies. If they went of strike in protest at their falling wage rates, they were vilified by Westminster politicians — Tory and Labour alike — for "holding the nation to ransom". From being "the backbone of the nation", "salt of the earth" and soon, they were denounced as greedy and lazy, a thoroughly bad lot, and obviously very unpatriotic. This happened with the firemen, miners and, more recently, nurses.

There is then no reason for the working class to take sides on this issue. Whether an industry is nationalised or de-nationalised is relatively unimportant. Workers always have to organise themselves to maintain a reasonable standard of living and to protect themselves from disagreeable and too often dangerous working conditions. In the nationalised industries, just as in the private sector, trade union organisation is essential.

But there are lessons to be learnt from the never ending disputes over nationalisation and privatisation. Matters which are thought of paramount importance are not trusted in the hands of any section of the capitalist class: they have to be managed collectively. The only way this can be arranged within the capitalist system is for control and ownership to be vested in the state, which will then act as "the collective capitalist", in Engels' phrase.

Also, this devolving of control to the state indicates clearly for all to see that the capitalist enterprise, operating along commercial lines, being in business to make profits, is not in the business of answering the needs of society. If there is a conflict between doing something useful and something profitable, the argument always comes out on the side of profit. Anything a private company does, which looks both unprofitable and socially beneficial is either a miscalculation or, more likely, a public relations stunt.

The point is that the capitalist system is not in business to make people happy, to build houses for homeless people to live in. to produce food for hungry people, or to care for the sick, the handicapped the old and the very young. It is in business to make profits to keep accountants and shareholders happy. Any coincidence with socially necessary or desirable activities is just that — a coincidence. That is why such matters are not trusted to the commercial self-interest of the private sector. However, reformers who argue for public control or state responsibility for such matters appear ignorant of the economic pressures which the system imposes even on the "collective capitalism" the state. These pressures force governments to provide as cheaply, as stingily as possible such welfare for the workers. The result, as Galbraith put it. is "private affluence, public squalor."

The heated question of whether this or that concern should be privatised or run as a state concern is for the working class a non-issue. The real issue is whether we actually want a society which operates according to an accountant s sense of values or one which operates in terms of satisfying human needs.

There is a real conflict, a tension, in capitalism between what is perceived as profitable, and therefore feasible, and what is known to be necessary, desirable and useful but unprofitable, and therefore impractical That is why there are homeless, hungry and unemployed people. And that is why socialists detest the capitalist principle which puts profits before people. It is time to end this system and create a better world.

Charmian Skelton

Endnotes (1946)

From the December 1946 issue of the Socialist Standard

What Price Nationalisation? Mr. Shlnwell Tells the Miners

After Mr. W. Lawther, President of the National Union of Mineworkers, had told delegates at the Labour Party Conference that the miners are impatient for better conditions, Mr. Shinwell, Minister of Fuel, disclosed the attitude of the Labour Government.

He said:—

    “You are not entitled to ask from us what you were always unable to gain from the private owner.”

(Daily Telegraph, 12/6/46.) 

This was received, says the Telegraph, with "cheers and some dissent.” The miners are in process of learning that nationalisation or State capitalism solves none of their problems.

"Progress"

   "The poorest people in pre-war unemployment areas are certainly consuming more than they did in 1938.”

(C. R. Attlee, House of Commons, 27/2/46. Daily Herald, 28/2/46.)

  "Half a dozen social surveys carried out in British cities in the decade before 1939 showed that, at the prevailing wage rates, the normal wage-earner, even in steady employment, barely earned enough to keep two adults and three children out of ill-health.”

(“The Condition of the British People,” 1911-45, Mark Abrams, Gollancz.

Quoted News Chronicle, 28/2/46.)

The Worker who Leaves his Brain In the Workshop

   "The man who would at work contemptuously reject a piece of metal which was not true to a thousandth of an inch came home, opened his newspaper, turned on his radio, or went to the cinema and took whatever rubbish was offered him without question. If he only stopped to think for two minutes it could never happen.”

(Professor T. W. Manson,
 Manchester Guardian, 25/7/46.)

Bold Mr. Bevan

As Minister of Health Mr. Aneurin Bevan issued a circular to public assistance authorities early in July urging them to be firm with "work-shy ” tramps

   "The hard core of habitual vagrants, including men who are work-shy, anti-social or recalcitrant, should also be given suitable treatment. For the limited number of men in this group firmness must, when necessary, be applied if reasonable discipline is to be maintained, and a spread of idle vagabondage discouraged.”

(Reynold's News, 7/6/46.)

The Daily Herald (13/7/46) published from a reader a sensible letter of protest. He said that Mr. Bevan’s circular reminded him of another group of individuals who surely come under the same heading —"I refer to the idle rich. They don’t tramp from place to place, but they have been riding around on the workers’ backs for years.”

It would be interesting to hear from Mr. Bevan exactly why the poor tramps should be glad to work producing profit for the rich tramps, including amongst the latter the stock-holders who are receiving generous compensation under the Labour Government’s compensation schemes for the nationalised industries.

News in Review: Unemployment at Renault (1961)

The News in Review column from the January 1961 issue of the Socialist Standard

Unemployment at Renault

“1900 workers sacked”. This was a news item in France-Soir of November. 3rd. The 1900 workers were employees of the French nationalised Renault motor car manufacturing concern. The discharges took place because the market has become overstocked and orders have fallen off.

This is a familiar feature of capitalist enterprise everywhere but the point to note is that Renault is a nationalised concern. Nationalisation has lost its appeal for most workers in Britain, but those who still think that it is a good thing should make a note that when the market becomes overstocked, even nationalised firms cannot continue to produce commodities for which there is no sale. They have to lay off the workers who have become surplus to requirements.

In the present case many of the workers at first declined to take their final pay packet and went to their benches as usual. They yielded, however, to the foreman's explanation that in view of the management's decision they could do nothing about it.

This brings to light one of the curious features of capitalism. Workers don't seem to object to slaving away week after week producing something, no matter what it is, so long as they draw a pay packet at the end of the week. They wouldn't mind if they kept on producing cars so that in the end there were so many of them that they had to run along on top of each other on the roads.

These contradictions are inherent in the capitalist order of society. Is it not time that workers started thinking about some other system—a system where goods could be produced to serve people's needs, where these needs could be assessed and production arranged accordingly.


Fact, Fact, Fact

Thirteen years ago, the Sunderland Corporation erected a lot of prefabricated houses. They were supposed to last for a few years, until better accommodation could be found.

Fact: These houses are now overdue for demolition—many of them are damp and cold. But there is no prospect of rehousing their inhabitants.

Fact: Sunderland already has its hands too full with its present slum clearance programme to pay much attention to the plight of the people in its prefabricated slums.

Fact: Sunderland has built 15,000 houses since the war. There are 11,000 families still on the Corporation's waiting list.

Fact: Capitalist politicians have always promised to solve the housing problem. The problem is in building a lot of the cheap-houses which workers can afford—and making their building pay. Under these conditions, society never even starts to solve the problem.

Fact: Workers in Sunderland—and the rest of the world—can end their housing problem by building a world where houses are put up for human beings to live in, and not for rent or sale.


Pay off

Did a lot of workers misunderstand that boom in hire purchase? Did they think that, because they didn't have to pay a deposit, they didn't have to pay anything?

Perhaps the salesmen forgot to make it clear when the contracts were signed. Apparently a lot of people took on commitments which they could not fulfil and have piled up a great heap of bad debts. Some hire purchase companies, caught in the fierce competition of the boom, are now seen to have fallen in with very uncertain clients. As a result, there have been rumours in the City about the stability of two of the finance houses concerned and much talk of setting up a central record of credit- worthiness, where the H.P. history of any buyer could be checked.

This may solve some of the problems of the finance houses. But the central problem—the thing which causes hire purchase and all the other makeshifts— remains. Workers want the better things in life, sometimes for the convenience of using them, sometimes because their possession carries social standing. But very few workers have the money to buy these things, unless the hire purchase salesman lends a hand.

So they accept a lifetime mortgage on a house, years of sometimes swingeing repayments on a car, washing machine and so on. It needs only moderately bad times to come along to upset this precarious scheme of things entire. And what has happened to the economists who assured us, in the post war years, that nobody would let a boom run away with itself again? The cut-throats in the hire purchase world have shown us that capitalism is just as unstable as it was in 1929.

There is no lack of experts—many of them officials in the consumer goods industries whose products are widely sold on H.P.—to tell us that the way out of this is to relax government restrictions. And there is no lack of prospective hire purchasers to support this view. In fact, the only solution is to have a world where things are made solely for use, not for purchase of any kind.


Footballers’ Strike

To many of the schoolboys who scuff out the toes of their shoes kicking an old tennis ball around a council school playground, the life of a professional footballer is a glamorous dream.

In fact, there is of course room at the top for only a very few, very good, footballers. These men can make a sumptuous living at the game. The rest have a hard time of it, on unremarkable pay and often under conditions of employment which an industrial trade union would not tolerate. Most footballers are looking for another job in their thirties, with little prospect of doing much better than a salesman or a shopkeeper. No professional player may publish a statement about the game without first having it vetted by his club —his employer.

The Professional Footballers' Association has asked to have the "slave" transfer system changed to abolish the ceiling on wages and to secure a share of a transfer fee for the player involved in the deal. To enforce these demands, the P.F.A. have threatened to call a strike. The bigger clubs can more easily afford to grant the players' demands, and foresee that to do so would help to defend their high position at the expense of the dingier clubs, many of which are already in deficit. It is, therefore, in the lower divisions that resistance to the P.F.A. is strongest.

Indignant fans, outraged players, angry club officials, have all had their say. Nobody, so far. has regretted that capitalist society makes a business of football and that the game is played, not for amusement and entertainment, but for investment. Like all the other superficially plausible criticisms of capitalism, the grumblings about the footballers' lot are as wide of the mark as a fourth division centre forward.

Bishops and Pawns

The Church of Rome takes every opportunity of informing the world at large that it is concerned with man's spiritual life and not his political one. Occasionally, however, its hypocrisy and cant blossom into the open, as was the case recently in Puerto Rica.

Governor Luis Marin of the Popular Democratic Party is noted for his support of birth control and easy divorce. This has aroused the ire of the Catholic Bishops of Puerto Rica, notably Bishop McMann, Bishop of Porce, the island's, second largest city. When recently the Governor stood for re-election, the antics of the Church were remarkable even for a country as backward as Puerto Rica. Early in the election campaign, Bishop McMann opened fire with a pastoral letter to be read in every church. He asked the Catholics, who constitute 90 per cent of the inhabitants, to throw out the Democrats and vote for a newly formed Christian Action Party. He also warned his brethren that to vote for Marin was a sin. During the election, the Bishop's efforts proved of no avail: the Governor was re-elected, and we would have expected the Bishops to quieten down. But not them. Having failed to terrify the Puerto Rican peasants by words, they are now literally putting the “fear of Christ" into them.

For a fortnight, at all Sunday Masses in San Juan Cathedral, the Pastor told his parishioners that they would have to confess to the sin of voting for the Democrats before they could receive Holy Communion. And what is more, before penitents could receive absolution. they had to promise not to vote for the Democrats again.

In this so-called enlightened age of ours it is important not to forget the power of the Church.

Wage Cuts (1982)

From the January 1982 issue of the Socialist Standard

When capitalism is going through a period of expansion most industries are able to sell all their output at a profit. With unemployment at a low level it is a favourable time for unions to press wage claims. Employers, rather than have the flow of profits interrupted, will make concessions, often without strikes actually taking place. In this phase the workers’ standard of living rises. In a serious depression the position is reversed. The threat by the unions to close the factories loses most of its force because, with sales falling and profits harder to make and often disappearing altogether, employers are cutting production, standing workers off, closing factories down, and in extreme cases going out of business. The big increase of unemployment helps the employers to resist claims for wage increases. In this phase it is normal for the standard of living of workers to fall, quite apart from what happens to the unemployed.


As far as workers in work are concerned, what is going on in a depression is obscured because, at least for a time, wages and salaries continue to rise more than the rise of prices. In the year for May 1980 to May 1981 the average earnings of all workers rose by 13 per cent while prices rose by only 11% per cent. But employers are interested not only in rates of wages but equally in the amount of work they can get out of each worker. There has been a general intensification so that the same output can be got with fewer workers. A survey early in the year showed that this has happened to a marked extent in offices, and the same has gone on in industry generally, often with the introduction of pay related to productivity, as in the coal mines. It is shown too in the reduction of staff by 9,000 in British Airways and in the cuts of Civil Service and local government staffs. And with the deepening of the depression the wage trend is now changing. In the period January to July 1981, while prices rose by 10.8 percent average earnings of all workers rose by only 7.3 per cent.

Of course the unions try to resist this and declare that they will not accept it; just as they have gone on declaring in the past ten years that the level of unemployment, which has doubled and doubled again, was “unacceptable” to them. They are wise to do their best but they cannot escape the consequences of capitalism, any more than can the capitalists.

Different groups of workers come up against the impact of depression in different ways; ranging from private industry where falling profits hit them at once and directly, to nationalised industries in which government subsidies may lessen the impact for a time, to the Civil Service and local government, where government pay policy is the decisive factor.

In manufacturing industry, with many bankruptcies and other companies on the verge, average earnings of all workers and the average earnings of engineering workers have both been falling behind the rise of prices since 1978. Seventeen cases have been reported of companies in which unions have had to agree to pay freezes for varying periods of up to a year (Daily Mail, 21 September 1981). Among these are the British Steel Corporation, British Airways and British Caledonian. In the engineering industry, against a claim by the union for an increase of at least fourteen per cent on the national rate, the employers at first proposed no increase at all, but later offered three per cent which the unions rejected. The unions faced the difficulty that 400.000 jobs have been lost in the year to June 1981 and there are 300,000 workers on short time. In this industry wages are negotiated locally, apart from the national rate, and the employers’ offer leaves the field open for bigger increases in companies still trading profitably.

For the nationalised industries as a whole the government has announced that its 4 per cent guide line is expected to be applied. British Leyland accordingly made an offer of 3.8 per cent and the unions were told it was not negotiable. The company’s reaction was: “We are obviously not in a robust enough situation to withstand any widespread or protracted industrial action. We would not survive. There would be a widespread loss of jobs if they were successful in getting a lot of people out on strike” (The Times, 3/10/81).

Unlike BL, the nationalised coal mines are not losing money, and in the changed energy situation, there is a government approved plan for expanding output in the long term. New mines are due to come into operation. Not wanting a coal strike, the Board offered nine per cent, and then increased it but a strike is still possible.

It is in the Civil Service and local government that the 4 per cent is chiefly intended to operate. In this field the government, directly or indirectly, controls the amount of money it is prepared to spend on wages and government strategy has already been made clear in the determined fight to defeat the 21 weeks of strikes by civil servants. Like Reagan’s ruthless handling of the strike of government-employed Air Traffic Controllers, it aims to set a pattern for wage increases generally. Since 1956 Civil Service pay has, by agreement, been related to movements of pay for comparable work in outside industry. But long before 1956, in a less formal way, governments sought to prevent the pay of its employees getting out of line. A situation similar to the present one arose in 1931. Then, too, in a depression, the government drastically cut expenditure on its departments. Civil Service pay, which from 1920 to 1931 had been reduced periodically in line with the fall of prices, was subjected to a further 10 per cent cut. Unemployment pay was also cut.

Governments enter into agreements with Civil Service unions, but, like employers generally, when it suits them they will suspend, modify, or break agreements, including those permitting claims to be taken to arbitration.

The present government has already prepared the way for this in Civil Service pay this year. The unions are to be allowed to go to arbitration, but the agreement on which the unions recently settled their dispute, contains a significant reservation: The Government will accept recourse to the Civil Service Arbitration Tribunal but on the understanding that the Government reserves the right, if necessary, to ask the Mouse of Commons to approve setting aside the Tribunal’s award on grounds of over-riding national policy.

Although the government pays a large part of the expenditure of local government it has not in the past been able to prevent local authorities increasing these expenditures and meeting the cost by levying higher rates. The Thatcher government has tried in various ways to get local authorities to hold down wages and reduce the size of their staffs. Finding these measures inadequate new legislation is pending to give the government more direct control.

The declared attitude of the unions concerned threatened a “winter of discontent” comparable with what happened in the winter of 1978-9 when the Labour Government tried to impose a 5 per cent ceiling on wage increases and provoked widespread strike action. On past form we may expect the Thatcher government to be more determined in its resistance.

Edgar Hardcastle

Workers v. State Capitalism (1969)

From the December 1969 issue of the Socialist Standard

On October 13 thousands of Yorkshire miners went on strike in support of their union's demand for a 40-hour week, inclusive of mealtimes, for all surface workers which the state capitalist National Coal Board had just rejected. At its height the two-week strike, which spread to other parts of the country, involved 125,000 men and closed about 140 of the 307 pits owned by the NCB.

Like most strikes these days it was "unofficial" in that it had not been called in accordance with the constitution of the National Union of Mineworkers. All the same, it was supported by many union members especially in Yorkshire, Scotland and Wales though many in other parts of the country like Durham and Northumberland were opposed to it and refused to take part despite the pleas of pickets from pits on strike. Most newspapers recognised that the strike had widespread support, though the Economist (25 October) kept up its vicious anti-union record by talking nonsense about "the minute but effectively destructive minority of extremists in the union".

The NUM had put in a claim to the NCB for an increase in the minimum wage for working five full shifts from £13 12 6 on the surface and £14 12 6 underground to £15 and £16 respectively. Earlier the union had also demanded the 40-hour week, inclusive of mealtimes. This the NCB had already rejected offering a 40-hour week, but exclusive of mealtimes, a difference of only twenty minutes.

The Board replied that they would grant the wage claim in full, but would stand firm on hours of work. The union's negotiating team decided to recommend that this offer be accepted, a decision which was endorsed by the full executive the day after the Yorkshire strike began. A special delegate conference, however, turned down the executive's recommendation and now the matter has gone to an individual ballot of union members.

Whatever else this shows, it is that opinion amongst NUM members is fairly evenly divided. The Socialist Party of Great Britain has always recognised that the people best qualified to run their union affairs are the union members so we are not getting involved in the arguments about the best course for the miners to take on this issue. Are the executive right in saying that the NCB will not move on hours whatever happens? Or, are their critics right in refusing to regard wages and hours as a "package deal" and demanding that the issues be voted on separately? These are questions to be settled, as we said, by the workers who are the members of the union including any who might also be members of the Socialist Party.

The British coal industry is state-owned and at one time people used to look on nationalisation as a form of Socialism. But now even Lord Robens admits that the NCB is a state capitalist body (Times, 1 April 1968). Producing coal for sale with a view to profit, the NCB is forced to behave like other capitalist employers. It must resist demands it cannot afford. It must close pits and workshops that are not profitable. Its workers, on the other hand, have to organise in trade unions and strike just like workers in individual—and corporation-owned—industries in order to protect their wages and working conditions.

The Socialist Party of Great Britain supports workers in their struggles over wages and working conditions and we wish the miners every success in getting 40 hours inclusive, but we do not see it as our task to give detailed advice on how to conduct these struggles. That is something for those involved to work out themselves. We would merely urge workers to recognise that they have a fundamental conflict of interest with their employers (whether private or state); to subordinate sectional demands to the interests of the working class as a whole; and to decide democratically on what action to take, whatever it might be.

Trade union action, whether official or unofficial, has its limits. It defends wages and working conditions, but it leaves the places of work in the hands of their owners. As long as this class ownership lasts, workers will have to —and should—take such defensive action but they should also realise its limits and the need to organise on the political field too in order to capture the machinery of government and make the means of production the common property of society as a whole

Nationalisation changes nothing (1984)

From the May 1984 issue of the Socialist Standard

At the time of writing, after months of an overtime ban designed to force the Coal Board to increase their offer of a 5.2 per cent increase of pay, most areas of the industry are on strike against pit closures, with the NUM President and Executive trying by mass picketing to force the areas which voted against the strike to join in. If the members of unions are to maintain democratic control of their own affairs in their own hands, it is essential that there should be a ballot before a strike begins and a ballot on acceptance or rejection of the terms negotiated by their leaders for calling off the strike. In the present dispute the NUM President and Executive have consistently refused to take a national ballot, one of the results of which has been conflict between miners wanting to continue working and miners trying to prevent them.

At the same time the courts became involved. Under the law as amended by the Thatcher government it is illegal for pickets to operate elsewhere than at their own place of work. The National Coal Board were awarded a court injunction forbidding the Yorkshire Miners Association to send pickets to other areas but delayed taking the further step of going to the court with a request that the Yorkshire Association be fined for its continued breach of the injunction. The NUM obtained promises of support from unions in road and rail transport and in steel, designed to prevent the movement of coal or its import but unions in the electricity power industry refused to help and gave instructions to their members to cross picket lines and continue working.

The background of the dispute is a complex one. It involves great changes in the techniques of coal cutting; the price at which the NCB can market its coal in competition both with imported coal and with the cost of power generated by oil and gas and atomic energy; and what will be the future demand for coal if North Sea Oil goes into decline. While modernised pits can produce at highly competitive prices and make a profit, there are others which make huge losses. In the former the miners can look to continued employment but in the latter the prospect is that the jobs will disappear as the NCB closes them down. In localities where the Coal Board is the chief or even the only big employer this spells disaster for the whole population.

The government’s attitude is that the NCB as a whole shall pay its way and cease to be dependent on subsidies, thus increasing the pressure to close down the loss-making pits. The Coal Board holds record stocks of coal it cannot sell. The NUM’s aim is that no pit shall be closed, however big its losses, until all the coal has been extracted. Also that there shall be no reduction in the total manpower employed, that no coal should be imported and that government policy shall encourage the use of coal against other sources of energy. They take the long-term view that there will come a time when coal production will have to be expanded again to meet demand.

The media have for the most part been hostile to the NUM's claims and actions, seizing on the refusal to take a national ballot as evidence that most miners are against the strike. This, they say, is undemocratic, but more of them insist that the NUM, also in the interest of democracy, should not settle the strike until after the workers have, by ballot, agreed.

The effect of the new techniques of mining on the industry and the NUM can be seen in the recently opened Selby coalfield. When it reaches full production in four years time it is expected to produce ten million tons a year, a twelfth of the Coal Board’s present total output, with just 4,000 men (Financial Times, 26 October 1983). But before Selby produced a single ton of coal over £1,000 million had been spent developing the mine and installing the costly equipment. What it means in economic terms is that more and more of the labour required to produce coal is that of workers not employed in the pits.

The mineworkers have been hit by the ceaseless change and development of industry under capitalism. In their search for profit, companies and nationalised industries take up inventions which promise cheaper production and increase profits, no matter what effect it has on the livelihood of the workers whose jobs disappear. Even if they get other work the change makes their old skills useless. In the past it was the handloom weavers driven into starvation by the application of steam power to new weaving machines; the coach drivers and farm horsemen whose jobs were destroyed by the railways and motor vehicles; the railway men in turn hit by motor transport and air transport; the morse telegraphist hit by machines and the development of telephones; and now the numerous office jobs that are becoming obsolete. Trade unions always do what they can to prevent or at least to delay the change but in the long run it is a losing battle. At present there are something under 200,000 miners, threatened by the loss of 20,000 jobs if loss-making pit closures planned for this year take place. At the beginning of this century they numbered over a million, reduced to 736,000 by the time the mines were nationalised in 1947 and to 490,000 in 1964. The NUM cannot put the clock back.

One of the tragedies of the NUM, as of other unions, is their long-held belief that nationalisation would solve their problems. The TUC began its claim for nationalisation of the mines before 1900 and the Labour Party adopted it soon afterwards. In 1919 the Miners Federation of Great Britain (as the NUM was then named) conducted a big campaign for nationalisation, got it approved by a ballot of its members and gave evidence to the Coal Commission set up to study the problems of the industry. The claim for nationalisation was combined with a claim for a 30 per cent increase of pay and a reduction of hours from 8 to 6 a day. The MFGB also argued that these claims could be met and still the price of coal could be reduced. They forgot all about capitalism. Within a couple of years selling prices for coal had fallen drastically, bankrupt companies were closing pits, and the union had to face demands for lower pay and longer hours, culminating in the General Strike of 1926 and the miners being forced back to work after a five months strike.

In the present dispute Arthur Scargill made a speech calling on the miners to unite against “the enemy, the Coal Board”. What is this Coal Board? It is the board of directors of the nationalised industry. It was set up under the Labour Government’s Nationalisation Act of 1947. The Miners Union had got what they had been campaigning for. Their MPs in the House of Commons voted for it, including its requirement that the industry should pay its way. There was nothing in the Act about maintaining the number of miners at 736,000. The Attlee Labour Government would not have dreamed of including such an impossible condition. What then did coal nationalisation bring for the miners? It was described by an earlier NUM Secretary Will Paynter in his book British Trade Unions and the Problem of Change:

  I remember the morning of January 1st, 1947—the first day of operations with nationalised mines — standing on the top of a tram of coal at one of the collieries I served as a Union Agent, making an enthusiastic speech about “the dawn of a new era", of the significance of the day being one where the "workers were moving forward to the control of their own destinies" and that we were at the beginning of the process where capitalism would be replaced by Socialism. This was obviously a naive and immature judgement of the change taking place, as we soon realised from experience. The relationship between management and workers remained the same; the union still had to fight hard to get improvements in wages and conditions and little in the daily lives of the men reflected the change that had taken place.

Paynter went on however, to say that there had been some improvements. Discussion between the management and the unions "became less acrimonious”, and it now became possible, as it had not been before nationalisation “for workmen to influence management policy”. In the present scene he would have to abandon that also. The miners have yet to learn that nationalisation is state capitalism and alters nothing in the class relationships of capitalism.

Edgar Hardcastle