This article is a continuatin of the series of texts by Harry Ratner, a British longstanding socialist activist. Part I and part II have been published previously on our website. Parts IV is currently edited and will be up next week. Your comments are welcome.
Public Ownership or Merely Control?
Economic policy in Britain during the Second World War provides an example of how it is possible to combine effective planning of the economy with market mechanisms. Physical controls on the use of resources (raw materials) were imposed so that firms could only secure these commodities if their use was essential to the war effort. More significant was the establishment of state control over capital investment. Thus a firm was only able to secure finance from the banks for expansion of its productive capacity by applying to the Capital Issues Commission, which only granted authorisation if this was considered essential to the war effort, or necessary for the meeting of civilian needs within the overall parameters set by the War Cabinet. Similarly, the building of a new factory or the closure of an existing one had to be authorised, and was sanctioned only if it fitted in with the needs of wartime production. Despite the destruction by bombing, the U-boat blockade, and the strains of war, the system worked ? even though the banks and industry remained in private ownership.
This prompts the question as to whether the complete taking of the banks and financial institutions into public ownership is necessary, or merely the sort of public control of capital investment and resources that existed in wartime. However, the vital difference between the situation that existed during the Second World War and the future situation envisaged is that during the war the controls were exercised by a capitalist government (albeit with Labour participation) pursuing a war in defence of British capitalism, and that therefore the capitalists accepted these controls. It is unlikely ? to say the least! ? that such acquiescence would be forthcoming in the event of a socialist government imposing such controls. Much more likely are attempts at sabotage, destabilisation and military conspiracies. Nevertheless, acting from a position of strength, a future socialist government could buy off, minimise or split the opposition by telling the capitalists: ?Either you accept the will of the majority, cooperate and retain some profits ? or face expropriation.?
Beyond National Boundaries ? The European Dimension
The globalisation of the economy and the international division of labour make it impossible to resolve problems on a purely national basis. This is why the policies outlined here must be fought for and implemented on an international scale. The progress towards an integrated European Union with a common currency and central bank, and eventually an integrated state comprising most of Europe, does make feasible and conceivable the implementation of a socialist programme on a European Community scale.
That is why we must be pro-European and in favour of a common currency. However, this does not mean accepting the Maastricht convergence criteria which are deflationary, and which would lead to further erosion of jobs and welfare. We should rather campaign for using new financial instruments for borrowing and investment such as the European Investment Fund, and the establishment of a European Public Sector Borrowing Requirement to create jobs and growth.
Side by side with this, a coordinated campaign by the European trade unions for a continent-wide reduction in average working time must also be part of the campaign against unemployment ? as well as an all-European trade union and shop steward campaign for social ownership. To this end the perspective must be the development of an integrated movement on a Europe-wide scale to campaign for these policies.
The Environment ? A Red-Green Alliance
Marxists have traditionally condemned capitalism because it acts as a fetter on the development of the productive forces. It was thought a ceiling above which they could not rise had been reached by the 1930s or even earlier. Since the Second World War, there has been a dramatic increase, and despite recessions there is no sign that a ceiling has been reached. Instead, it has become apparent that the untrammelled development of capitalist industrialisation threatens an environmental disaster.
This and the exhaustion of non-renewable natural resources may impose limits and constraints on acceptable industrial growth. It is this realisation which has prompted the world-wide development of Green movements. It is becoming increasingly apparent that it is the unplanned and chaotic nature of profit-driven capitalism that stands in the way of a rational use of resources, and sustainable and environmentally-friendly economic development.
The proposals outlined here for overall economic planning through public control of all major investment and for community participation in local enterprises should therefore appeal to the Greens.
An example of how such policies could link with the concerns of Greens and environmental campaigners is the problem caused by the proliferation of private car ownership. The obvious solution is the development of an integrated bus and rail public transport system, and the reduction of the number of cars on the roads. At present this comes up against two obstacles. The profitability of public transport is obviously not sufficient to attract private capital. And right wing governments intent on curbing public expenditure will not finance or subsidise public transport. The other obstacle is the vested interests of the car industry. Reducing the number of private cars threatens a loss of profits for motor manufacturing firms, and a loss of jobs for car workers.
Both these obstacles disappear if all major capital investment is socially controlled through a publicly-owned or controlled banking system which directs investment according to a democratically worked out integrated transport policy. Once the desired mix of rail, bus and private car transport and the appropriate road and rail network to go with them has been worked out, the necessary capital investment and finance is provided through a national or European investment fund.
If this integrated transport policy also involves the loss of jobs in the motor car industry, the plans would include the creation of alternative jobs or a general reduction in working time, or a combination of both, with the necessary finance for alternative employment being provided through the public banking and investment institutions.
Another example of how public control over the allocation of capital could help solve environmental problems would be the allocation of finance for research into and development of alternative sources of energy, for example, wind and wave power to replace fossil fuels. At present this does not attract private finance.