Friday 3 July 2009


On Wednesday John Prescott, former deputy prime minister, was a happy man. “I thoroughly enjoyed having a nationalised cup of tea and a nationalised bacon sandwich.” Obviously, John is not a man of taste and discernment, but his relish at the sudden renationalisation of the East Coast main line was typical of a man of the left. The cause of John’s culinary delight was the failure of the National Express franchise that has resulted in a swift, but temporary, government takeover of the railway.

Of course, many on the left proper would regard Prescott as a fierce old right-winger, but they will share his delight at this manifest failure of private enterprise. Even the revolutionaries scattered throughout an archipelago of groupuscules will agree – nationalisation is a self-evident good – even without workers’ control. This is a cardinal truth, an article of faith, for anybody claiming to be on the left. It even extends to defending wretched municipal council housing against the estate management of social housing, by housing associations, and co-ops.

Why this shibboleth? Why is nationalisation and municipalisation thought of as a good thing by socialists and anti-capitalists in general? Some would say that it’s all about democracy. I would say, “Come off it!” There has never been anything democratic about council house building, the allocation of tenancies, or the direct works department dedicated to keeping them in a state of permanent disrepair. What was democratic about the National Coal Board or British Rail? I would say, “Nothing at all.”

Others would attribute their love of the public sector to the ethos of public service; they argue that public service, not profit, is the raison d’être of municipal and nationalised enterprises. This wish is the father to the thought. There is a conflation here between the lack of profit and the ‘ethos of public service’. It is self-evidently the case in capitalist economies that activities, which cannot make profits because of structural or temporary market failure, will fall into the lap of state agencies and local authorities. There is nothing new or socialist about this – state and municipal enterprises have been an integral component of any fully developed capitalist economy for the best part of two centuries.

Life for full-time and lay trade union officials is certainly easier in public service companies than in profit-driven enterprises, in some sectors wages and conditions for workers are much better than in the private sector. However, low pay and rotten conditions are common enough in publically run institutions; certainly none of the benefits of public employment are consistent or reliable enough to justify left-wing veneration of the so-called ‘public ownership’ by the capitalist state and its quangos of railways, hospitals, roads, banks, building societies, social housing, and any other activity that offers little or no prospect of returns for the investing public.

National and municipal enterprises are a vital part of a healthy capitalist economy – they do the things that the capitalist class cannot make profits from – things which provide the capital and social infrastructure necessary for the continued success of private enterprise. If this is true, why does the left love it so much?


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