Labour and “public ownership”

By Tom Harris

The Labour manifesto of June 2017 was the most left-wing for generations. On all sorts of issues, it represented a shift away from the neo-liberal consensus of the last thirty years, and promised measures to improve social equality and the conditions of life for the working-class majority. One element of this break with the old politics was its promise to bring some industries into public ownership, and to stop the decades long drift towards privatisation.

This is very welcome, but does it go far enough? How does it compare with what socialists in the Labour Party (indeed, Jeremy Corbyn and John McDonnell themselves) have argued for about public ownership in the past? And is the manifesto “socialist”?

The definition of socialism has been a notoriously slippery one throughout history, but most serious attempts to define it focus on collective ownership. Not collective ownership of private property (as the American socialist Max Shachtman once memorably said, socialism is not interested in confiscating your piano or your underwear) but collective ownership over the means by which society produces things. Since we all rely on factories, farms, infrastructure, natural resources and services to live, it stands to reason that these should be run in the interests of us all, rather than being hived off by capitalists to make a profit. If the economy is owned collectively by us all, we can make it work for us all, rather than lining the pockets of a few.

Traditionally, “collective ownership” has tended to be used interchangeably with “nationalisation” – where the state takes over an industry out of private hands. But does that mean nationalisation is the same as socialism? Is the state taking stuff over really all that we want?

Well, no. If an industry or a resource is going to be genuinely “collectively” owned by the mass of people, it follows that it has to be controlled democratically. All sorts of things might be owned by the state, but if workers and the public don’t have any real say in how they’re run, they only “own” it in a very abstract sense, if at all. All kinds of unpleasant and anti-worker regimes nationalise things – for nationalisation to be socialist, it has to be radically democratic.

Encouragingly, the Labour leadership have occasionally seemed to nod towards this idea. Acknowledging the remote, bureaucratic way in which many of the industries nationalised by the 1945 government were operated, John McDonnell told an audience at the LSE that “the old, Morrisonian model of nationalisation centralised too much power in a few hands in Whitehall. It had much in common with the new model of multinational corporations”. Jeremy Corbyn made similar comments about the railways during his first leadership election, advocating a system publicly owned but run by its workers and passengers as well as the state.

In place of the top down model, the Labour leadership talk about “alternative models of ownership”. When you dig around Labour Party documents (see for instance here), what this boils down to seems to be co-ops, giving workers’ the option of buying up their companies, as well as straightforward nationalisation on a basis that doesn’t seem obviously different from the usual model.

In the 2017 manifesto, a commitment is made to “doubling the co-operative” sector, as well as making workers the ‘buyer of first refusal’ when the company they work for is put on sale. While this may sound more democratic and decentralised than top-down nationalisation administered by central government, I’m far from convinced this type of piece-meal operation is much of a solution to the problem of privatised industry. Working for a co-op may well be more pleasant than working for a private boss. Buying up a company with your colleagues and attempting to run it equitably may also be an option that workers might consider if they fear the firm they work for may be bought up by asset-stripprs. But small co-operative companies are vulnerable to the pressures and imperatives of a capitalist market. They may provide a transient bubble of collectivism in a capitalist sea, but they’re a poor substitute for large-scale, nationwide public ownership.

On a more optimistic note, the manifesto does also propose nationalisation of some big and important industries. The rail, the mail, water and energy are all proposed to be taken back under public ownership (though the details around some of these are a lot vaguer than others). As socialists and trade unionists, we should be pushing the leadership on what kind of nationalisation will be implemented in these areas. What democratic say will rail workers get in the new nationalised train system? How will the running be accountable to the public? Will the energy sector be taken over entirely, or will there just be one public option among a continuing market of private providers? And will they be nationalised without compensation, or will the tax-payer have to dole out even more money to the corporate privateers who’ve already been fleecing us through subsidy for decades.

The commitments on public ownership in the manifesto are much less substantial than the Labour Left has proposed in quite recent history. During the New Labour years, the left-wing Labour Representation Committee and its co-thinkers would occasionally publish alternative economic proposals to those of the Labour government under the guise of the Left Economic Advisory Panel. A skim read through their document in 2010 makes for instructive comparisons with the current line of the left-wing Labour leadership. As well as being much more far-going on the question of repealing benefit cuts and anti-trade union legislation, the document also argues for the nationalisation of the banks. Nowadays, John McDonnell argues only for a “national investment bank” that runs parallel with the private ones, on the model of the thoroughly capitalist Germany of Angela Merkel.

Socialists should encourage John McDonnell to have a read of the LEAP documents. After all, he wrote the glowing forewords for all of them.

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1 Comment

  1. Do you realise that membership of the European Single Market (or European Economic Area) is incompatible with many of these policies? It includes adherence to the so-called liberalisation directives which forbids nationalisation of the gas, electricity, telecommunications and postal industries. Instead there must be an open market in which firms from any Member States is entitled to compete.

    The same essentially applies to all other sectors, including banking, because the EU Treaties guarantee to firms “freedom of establishment” which means the right of a company to establish branches or subsidiaries in any other Member State. The effect would be to scupper efforts at nationalisation. The most public enterprise could do would be to compete alongside private firms in a capitalist market.

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