[page 26]
The market economy or
socialist planning
The market economy is now the vogue. The exchange of goods and services for a price on a market is now heralded as the most efficient, fair and practical way of meeting the needs of human beings. The 'freer' the market is from state 'interference' and 'bureaucratic obstruction' the better it will work for all who participate. And this 'free market' inspires the spirit of self- interest which in turn generates selfmotivation and enterprise which not only makes the wheels of production turn but also makes people more prosperous and happy.
This is the professed philosophy of Thatcherism and Reaganism. Through buying and selling on the market, available resources and products are distributed to people in the most etficient and equable way. The allocation of resources does not take place by conscious decision, but by the operations of supply and demand through the movements of price, indirectly by the 'invisible hand of the market' as the classical economist of the late 18th century, Adam Smith, characterised it. Each individual choice made by the buyer and seller of any transaction on the market simultaneously promotes and harmonises all individual actions for the social good.
Keynes discarded
The leaders of capitalism have returned to this unbridled defence of the market because of the perceived failure of 'state intervention and planning' in
Western capitalist economies. The unp-
recedented growth of investment, pro-
duction and trade, accompanied by
relatively full employment trom 1948-73
was commonly held by supporters of capitalism to be the result of the judicious use of state subsidy, state
expenditure and state projects backing
up market capitalism, along with careful
regulation and guidance to the direction
and operation of private capital and
markets. In other words cooperation
between a state-owned productive sec-
tor and private capital, characterised in
Britain as the 'mixed economy'
But the first major world recession in
production and trade in 1974-5, follow-
ed by the deep contraction of world
industrial production from 1979-81,
brought about a transformation in the
ideas of the strategists of capital.
26
By Bob McKee
Whereas they had thought that capitalism had needed the help of the state to avoid the slumps and unemployment of the 1930s, it now appeared that state expenditure and regulation capitalism could not avoid a paralysis of production and investment growth. On the contrary it appeared to make it worse by running up huge borrowing burdens on the private sector and restrictions on investment and trade. It was time to turn back to the 'free market'. Keynesian state expenditure was replaced with monetarism; state regulation with the free market; and the state sector with privatisation. After all, as Professor Griffiths, adviser to the Thatcher government, says in his book, The Creation of Wealth: "It was the market economy which brought about the transformation of the Western world from widespread poverty to the level of prosperity it now enjoys"
The relative boom in the world economy since 1982 has apparently justified this return to Adam Smith. The fact that the boom of the 1980s is the weakest in the post-war period; that unemployment in the advanced capitalist world remains around 30 million; that the neo-colonial countries of the Third World', with few exceptions, show no appreciable progress out of "widespread poverty" is ignored by the gurus of the 'free market'. Thatcher is happy to boast that "we are now a capital-owning democracy of people and families. We have come out of the long dark tunnel of socialism. We are now the first post-Socialist society" (speaking to the Conservative Women's Conference 1987).
It is a fundamental premise of socialism, even before Marx developed his contribution to socialist thought, that the needs of human beings will never be satisfied properly through the production and exchange of commodities on a market. The market breeds inequality of income and wealth; it wastes human labour power and natural resources; and it causes periodic
and uncontrollable slumps in produc-
tion, employment and incomes and
therefore condemns millions to chronic
poverty, even hunger and death.
Therefore any revival of the idea that freedom from material want and the complete satisfaction of human need can be achieved through, and only through, the market, should be vigorously opposed by any socialist. This article attempts to carry out that task by once again going over the basic contradictions in the market economy that Marx and other socialists have identified; and restating the essential features of the socialist alternative: democratic planning under common ownership to meet needs directly.
This restatement of why the capitalist market economy has outlived its usefulness to mankind and how socialist planning must replace it if the human race is to progress, is necessary not just because the representatives of the capitalists have re-embraced the 'free market' . Unfortunately it is also necessary because the official representatives of the working-class, the leaders of the labour and trade union movement, both social democrats and 'communists' have swallowed this new orthodoxy hook, line and sinker.
'Aims and Values'
The clearest statement of capitulation to the 'market economy' is in the Labour Party NEC's Statement of Aims and Values, supposedly the definitive view of the present leadership on capitalism and socialism. The document states: "Market allocation and competition between companies, whether privately owned or socially owned, is essential to serving the customer meeting changing needs, responding to demand and promoting efficiency. This view of the market was more recently backed up by Labour's deputy leader, Roy Hattersley, in an article in the New Socialist of May/June 1988, when he said that "market allocation was essential to ensure the efficiency which comes from competition and to provide the consumer with real choice". Of course these statements from the current leadership of the Labour Party merely confirm what they have argued over the past few years: that socialist planning and public ownership are unworkable and unnecessary. Witness what Neil Kinnock saw as his aim only two years ago: "the government's task is to lead the consensus for change, assist with finance to promote the grow-
[page 27]
of markets" , Financial Times.
Similarly Roy Hattersley, when asked
how to solve the basic problems of the
economy, commented, in the Guardian,
15 October 1984: "We need a high
profit economy - there is no way of
creating full employment in
absence". Lord Donaghue, formerly an
adviser to Jim Callaghan, the Labour
Prime Minister from 1977 to 1979, put
the argument for capitalist markets
even more crudely: "1 think the City
can contribute more to a Labour society
than Camden council or a nationalised
gas industry"! This came from an inter-
view with Donaghue in Marxism Today,
the 'theoretical' journal of the 'Com-
munist' Party, without comment.
Indeed, the capitalist market system
has been even more enthusiastically endorsed by the so-called 'Communist'
Party of Great Britain. Its intellectual pundit, Professor Hobsbawm, wearily told us after the Tory election victory that: "in the absence of any other party with a vision of a renewed Britain and the determination to get there, even the absurdities of the free market look better than nothing", Guardian, 27 September 1987. He went on to say that: "Using markets and private enterprise will be inevitable for any post- Thatcherite government given the privatised economy in which it will have to begin operating". The recent new 'Communist' Party programme, Facing up to the Future, endorses the need for the market "as the best way to coordinate lots of economic decisions and ensure that production responds to consumer choices" along with rejecting the class nature of society and democratic socialist planning.
The failure of the 'mixed economy' which was held so dear by Labour and trade union leaders in the post-war period; the apparent relative success of the 'free market' under Reagan and Thatcher in the 1980s; and the growing crisis of the 'centrally planned economies' of the Soviet Union and Eastern Europe have led capitalist, social democratic and Stalinist pundits to reassert the beneficial features of the market economy. Once again it must be the task of Marxism, the scientific form of socialism, to explain the real workings of the capitalist market economy and the socialist alternative.
Is the market the best way of allocating available resources to achieve maximum satisfaction of human needs? Such is the claim of the most prominent of economists who promote the virtues of the market. Friedrich Hayek is the prophet of Thatcherite economies and a dedicated opponent of socialism. In fact Hayek has seen it as his life long duty to refute socialism. In his latest book, The Fatal Conceit: The Errors of Socialism, he states: "there is no known way, other
What is the difference between 'social ownershin' and Nauld Muran'e tanslal mandat
than by the distribution of products in a competitive market, to inform individuals in what direction their several efforts must aim so as to contribute as much as possible to the total product" Market allocation is the only system that meets the needs of mankind. How do we know? Because people would not pay the price of a commodity unless it met their perceived need, ie if it sells it satisfies.
Adam Smith
And it is the motivation of private gain for the individual which lies behind market allocation and makes it work. As Adam Smith put it: "It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from a regard to their own self-interest. We address ourselves not to their humanity but to their self-love and never talk to them of our own necessities but of their advantage" • And this is not only the law of supply and demand or of profit, but ultimately of 'human nature'.
Now some socialists would condemn such a philosophy as "immoral' but for Hayek or Thatcher such condemnation is irrelevant. If the market economy takes production forward, provides more commodities that 'consumers' need and allocates resources efficiently as producers compete to obtain profits, then that success is the market economy's own justification.
Marxists oppose the market economy not because it is immoral but because while it may, at heavy cost to human energy and life, have once driven the productive forces onward, it has never met the needs of the overwhelming majority of the world's population and increasingly will be unable to do so.
Why? Firstly, because there is no real 'free market' for the exchange of commodities. The competitive struggle for markets between independent producers has led to the growth of huge monopoly producers who now dominate not only their own national markets but also as multi-national conglomerates straddle the markets of the world. These large companies can exert powerful control over the price of the products they produce and the levels of production and investment in the market. So there is no free competition. This has happened precisely because of the nature of capitalism; where the owners of capital have increasingly concentrated their labour force in large production units, developed the division of labour in the processes of production and built up reserves of capital to introduce new technology and develop markets. It is the nature of competitive capitalism to turn into monopoly capitalism. The irony is that the market economy rests on the social cooperation of millions of workers, as we explain below, who do not own any means of production but who are corralled into ever larger concentrations of private capital as they drive out all the small and independent producers from
27
[page 28]
MIR Autumn 1988: Markets or Socialism
the market place:
There are two features of monopoly capitalism that flow from this development of the market economy. Firstly much of the production of modern capitalism does not now go through market allocation at all. The modern large motor company manufactures its engines in Japan; its vehicle bodies in Korea; its assembly in Spain and its spare parts in the UK. These products are not sold on the market to each subsidiary. Instead production is planned and directly allocated across national boundaries to meet the planned target of vehicle production. Only at the end does somebody pay money at a price for the finished vehicle. It has recently been estimated that 50% of the UK's international trade takes place between affiliates of the same company where the price for the traded parts of the product are fixed by the company for accounting purposes only and where no market exchange takes place at all. Mass production under modern capitalism requires considerable planning of production and direct allocation of products without the market.
No 'Free Market'
The size and share of monopolies aiso increases their power to control prices and the movements of supply and demand in the market. And yet the struggle for profit, the private appropriation of the surplus created from the labour power of the working class to the owners of capital, continues in contradiction to the socialisation of the production process and its removal from the market. This stark contrast is one of the major contradictions of capitalism that can only be resolved by socialist planning, bringing socialised production into harmony with democratic control of the surplus produced by cooperative production. As Engels described the process in Anti-Duhring: "The greater the mastery obtained by the new mode of production over all the decisive fields of production and in all the economically decisive countries, the more it reduced individual production to an insignificant residuum, the more clearly was brought out the incompatibility of socialised production and capitalistic appropriation... now presents itself as an antagonism between the organisation of production in the individual tonin sond hear produc
The contradiction between cooperative production and private capital ownership is mirrored by the contradiction between social need and private profit. The pursuit of 'self-gain' for the individual in the market does not meet
28
the needs of people as a whole. Marx has shown that the apparent equality of exchange values when commodities are bought and sold on the market for money, hides a process of exploitation where those who have nothing to sell but the ability to work are forced into employment for a wage by the owners of capital, ie the privately owned raw materials, factories, machinery and money. For this wage, workers produce value embodied in the commodities which is greater than that invested by the capitalist in the wage bill and machinery and raw materials, when sold on the market by the owner of capital.
In order to expand this surplus-value, the owners of capital exercise a tyranny over the workforce in an effort produce commodities at the 'right' price for the market. There is no conscious decision about what to produce or whether to produce more or reduce the hours of labour. The consumer ie the market, must be satisfied so that surplus value is appropriated by the owner of capital. This surplus-value is then invested or consumed as the individual owners of capital see fit, not as society as a whole may require. In fact production and investment may be arrested if this profit created by the unpaid labour of the working class is insufficient for the owners of capital.
This method of increasing production is unique to the capitalist market economy. And it is precisely this anarchic system of production for profit and not for the consumer that leads to the cycles of boom and slump exhibited in the world capitalist economy. The market system breeds overcapacity as monopolies cut back on production to maintain prices; unemployment as the market economy descends into depression; and inflation as the market economy produces overproduction of credit ie fictitious capital. As a result there is a huge wastage of productive potential - even in boom periods under modern market economies only 80% of total productive capacity is used on average by advanced capitalist tions.
Capitalism is a
system riddled
contradictions,
founded on
exploitation and
inequality and r
foundering in cl
cycles of boom
slump.
DW roni and
In another way here is considerable waste of productive labour under the market economy. Because production only takes place if commodities can be sold on a market in competition with other independent capitalist producers, massive amounts of resources are devoted towards persuading consumers to buy products, many of which are distinguishable from one another by only a brand name. Marketing and advertising, far from just informing the potential buyer of the existence of a product, consume big budgets in trying to increase or maintain a share of an already existing market. The waste of resources is revealed by figures for the amount of money invested in management, marketing, advertising and financial staff ie circulating capital, compared to production workers, in the total US wage bill for capitalist companies in the USA, taken from A Henley Labour's Share and the Profitability Crisis, Cambridge Journal of Economics, December 1987. Most of such expenditure is only necessary in a market economy.
The ratlo of circulating production wage blll
1947 3.69 1980
1960 3.72 1982
1970 3.78
But perhaps even more devastating to the argument that the market allows choice is that the market ignores the varied purchasing power of the individual. Yes, anybody can buy what they want - so long as they have enough money to meet the price. But the capitalist market economy does not create consumers with more or less equal incomes or wealth of ownership despite Thatcher's talk of a property owning democracy. The vast majority of wealth is in the hands of a few property owners, and through that inequality those owners of capital are able to extort the greater proportion of income generated by the work of the majority. The latest figures on the concentration of income and wealth confirm that. Poverty is a chronic disorder of the market economy, whether it is in an advanced industrial nation like the UK or throughout the ex-colonial countries where poverty, famine, disease and climatic disaster dominate the lives of thousands of millions. The reality of the world in the late 1980s makes a mockery of Professor Griffith's boast that the market economy has enabled people to "enjoy prosperity"
Advocacy of the market economy is based on the view that if something sells it must be beneficial. But while motor cars are sold in their millions, no account is made by the market economy
[page 29]
of the accompanying pollution, trattic accidents and consequent resources used in health, the need to build roads at the expense of rail etc. There are other costs to society which the market ignores in its single-minded pursuit of 'self-interest'. All around we witness the growing ecological disasters, the dangers of the destruction of the atmosphere, the rain forests etc. But it there is no 'self-interest' then the market cannot respond to social needs.
The struggle for a greater share of the market by individual producers has led to them combining politically to finance and support nationally based state machines to protect by force of arms home markets and to annex new markets around the world. Imperialist war is the direct result of the struggle for markets in the national rivalry within the capitalist market economy. What could be more wasteful of human life and energy and material resources?
Clearly, the market does not rationally allocate scarce resources, it does not maximise production, it does not meet consumer need through providing free choice for the consumer. It is a system riddled with contradictions, founded on exploitation and inequality and now foundering in chronic cycles of boom and slump leaving the majority of the human race in poverty and misery.
Marx
The progress of mankind can only be objectively measured by the ability of human beings to expand the productive forces to the point where working is no longer necessary to meet human wants. As long as resources are scarce in relation to wants then society will still be locked in the realm of necessity. But Marx argued that the market economy, while a system of social organisation which drove forward the productive forces way beyond that achieved by earlier forms of social organisation, could never free human beings from the struggle to produce enough to meet even basic needs for the population of the world. To do that required a social organisation of "associated producers rationally regulating nature, bringing it under common control instead of being ruled by it as by the blind forces of nature". That meant the abolition of private property relations so that socialised production was harmonised through common ownership; and through conscious planning of the productive forces.
For Marx socialism was a society where human beings were freed from necessary labour because they had raised the productive forces to the point where material wants ie food, shelter,
Roy Hattersley believes that "market allocatlon was essential....to provide the consumer with real cholce."
services etc were fully satisfied and human beings could use their time and energy ie work, because they wanted to, not because they had to live. Of course, such a society could not be achieved immediately. Firstly capitalism had to be abolished, not only in one country but throughout the world. And secondly planned production and technology had to be developed to the full.
Marx defined two stages in the movement to a socialist or communist society. The first or transitional stage started when the world economy has dispensed with private property but human wants had still to be fulfilled by increased production. With common ownership ending private control of the means of production and a conscious plan to develop the productive forces, a real start could be made on using the cooperatively created proceeds of labour in a rational, efficient manner to meet human needs. The plan of production would involve decisions on: how much of the total social product would be used to replace worn-out means of production, and how much to expand production further; how much for the administration of the plan's implementation; how much for the common satisfaction of needs eg schools, health, education, housing etc; and how much for the young, old, sick and disabled unable to contribute any labour. Only after that would the plan consider how the remaining proceeds should be distributed among those contributing to the total social product through their labour. (See Marx's Critique of the Gotha Programme).
The proponents of the market economy argue that planning for production on the basis of common ownership, excluding the role of prices and the market to distribute the total social product, is unworkable or, at the very least, unable to satisfy human wants as
well as market allocation.
But planning is the direct allocation of goods and services to people rather than by exchange on the market through a pricing mechanism. Such direct allocation of resources already takes place in large measure under capitalism. Capitalism brought together scattered, limited means of production and concentrated and enlarged them into much bigger units of production using the labour of people together ie socialised production. Thus there arose within the market economy "division of labour upon a definite plan as organised in the factory. Side by side with individual production appeared social production".
(Engels, Socialism, Utopian and Scientific). But because the market was based on private appropriation through exchange of the products of social labour, there is an inherent antagonism within capitalism which is only resolved with its abolition through common ownership. Only then is there a "harmonising of the modes of production, appropriation and exchange with the socialised character of the means of production... socialised production upon a predetermined plan becomes henceforth possible."
Planning
That this cooperative ferm of labour exists even within the market economy has been recognised by the most unlikely of sources. Michael Ivens, formerly of the pro-capitalist Aims of Industry, writes in his recent pamphlet, Natural Partners: cooperation and competition, published by the Tory Centre for Policy Studies, that "the lives of most men and women are not based on competition. Nor does society function solely on its values... we live through a fantastically complex arrangement of cooperation."
29
[page 30]
MIR Autumn 1988: Markets or Socialism- That planning ie direct allocation ot resources, exists even under capitalism demonstrates its essential meeting human needs.
The proponents of the market argue that planned production is impossible because the number of consumer decisions made to buy or sell commodities is so great that they cannot be calculated and identified and are too many to be handled by people planning in advance the exertion of labour cooperatively. Only the market can handle these millions of transactions. The truth of the matter is that it is perfectly possible to calculate all the consumer choices however many there against available resources, especially with the use of computers.
In reality there are not millions of transactions in the market. Many commodities, as we have seen, are produced directly allocated within | capitalist combine or factory and never enter the market.
And there are finite limits on the number of consumer choices that can be made - there are only 24 hours in a day. The vast bulk of decisons that we make about our wants hardly vary from day to day. The basic needs for food, shelter, power, transport, education, hospitals do not vary dramatically each day or even each year. They can easily be calculated and planned for in ad- Equality Even demands tor housenold appliances can be forecast reasonably curately in advance, and even whether we want a white coloured car or a red one. Such consumer decisions over a whole society do not vary from minute to minute and so can be planned for. That is what capitalist market research is all about.
But the proponents of the market argue that there are limited resources and the only way to distribute them when human wants are greater than supply is through pricing and the market. Obviously only when production has reached such heights on a world we talk of meeting human need. Until then resources will be inadequate and must be allocated as best as possible. But already under a socialist plan, using the technical knowhow, machinery and labour already available today, it would be possible to direct resources towards meeting the basic needs of people ie freedom from hunger, power, clothing, water, transport.
Demand can be satisfied in these areas which constitute up to 60-70 per cent of all consumer demand. Planned The proponents of the market argue that planning means a centralised bureaucracy ruling peoples lives - the road to serfdom'. But planning can be done bureaucratically or it can be done democratically, just as a market economy can have parliamentary democracy or a military dictatorship.
socialist production could deliver these articles of consumption directly and at zero price without using the market. Price has little role to play in allocating resources for these basic needs. People need food and shelter whatever the price they are asked to pay, while price clearly would affect the overall demand for diamond necklaces.
Of course such a redistribution of resources would mean that there would be little or nothing left, at least to begin with, for producing Rolls Royces, yachts and other luxury goods. Not all needs can be satisfied for some time under a socialist plan, but then neither can they under a market economy.
The question people are not allowed to decide under a market economy and which they can only decide under a socialist plan is: which human needs do they want satisfied first? A Rolls Royce for a few thousand people or free public transport? Haute cuisine food in the best restaurant or the end of famine in the Sudan? If the market is the only way of allocating resources to meet consumer choice, why is it that nobody objects when food and medicine are sent directly to the dying in Bangladesh at zero price to them. Surely they should be buying these goods on the market to ensure 'fair and equitable distribution of resources'?
Initially in the transition to socialism, price rationing may be necessary for more sophisticated goods like a jet plane seat or a CD player, which cannot be provided in superabundance to begin with. But even there price rationing would be fairer because it would be incorporated into a socialist plan of production. There would be a much higher degree of income equality to enable people to purchase many of these goods. Planned directly allocated production would cover the basic necessities, and slowly would be expanded to meeting less essential goods. Gradually the role of the market would be reduced - it would wither away as production expanded to meet human needs. The proponents of the market argue that if there is no money incentive to produce because incomes are relatively equal and there is no profit to be made, then production will stagnate and innovation and the introduction of new techniques will stop. But there is not a jot of evidence to show that inventions that have benefited dependent on a profit to be made by the inventor - on the contrary many a great technical or scientific discovery has failed to enrich its originator personally. Studies have found that, given a minimum level of income or satisfaction "within any one culture differential money rewards are of limited importance in transforming a less industrious workman into a more industrious , Dahl and Lindblohm Politics, Economics and Welfare. Would a professor still want to be a dustman just because he could earn more money clearing garbage? In fact, there is case for paying dustmen more than professors to compensate for a nasty job! Bureaucracy?
The proponents of the market argue means a centralised that planning bureaucracy ruling people's lives and making all the decisions for them - 'the road to serfdom' to use Hayek's phrase. But planning, ie the direct allocation of resources, can be done bureaucratically or it can be done democratically. There is no inevitability about one way or another, just as a market economy can have parliamentary democracy or a military dictatorship.
This is not the place to go into the reasons why the overthrow of capitalism in Russia led to a bureaucratic police state running a planned economy which is not accountable to or controlled by the people of the Soviet Union, but there is absolutely no reason why all the people it affects cannot control and manage a plan of production. This is especially so if people have the time and energy to participate in the running of the economy. And that is one of the first decisions that can be made under a socialist plan - whether to produce more to meet certain consumer needs or instead reduce the hours of labour to meet the needs of leisure or democracy. Under the market there is
[page 31]
no choice: people must work to meet 'demand' as exhibited through the market and they must struggle with owners of capital to free them from working long hours to raise the profits of individual capitalists.
'Social Ownership'
At national or even world level,
decisions can be made on such broad
items of planning such as the length of
the working week, the amount of zero
priced goods, the amount to be invested
overall, and the prices for those goods
still to be exchanged on the market and
not directly allocated. Then at regional
and industrial level the plan can be
fleshed out to cover available resources,
technique, labour and management to
meet planned targets. Obviously there
would be tremendous debate about all
aspects of the plan, involving people at all levels. Mistakes would happen and have to corrected. But under capitalism it a company fails in the market place and has to close down, it is the workforce who suffer from unemployment and loss of income, not the owners of capital and the management. Under a democratic plan, any mistake would be borne by society equally.
There would still be a place for those who wish to form cooperatives to produce goods for which they can perceive a need and even for voluntary agreements between people to work for each other. But the planned publicly owned sector would control overall resources and set the prices for purchasing materials and labour and for selling the goods produced. Market relations would thus be restricted to the point of contact between the public and private sectors.
There is nothing centralised or bureaucratic in this schema - it is a practical vision of democratic socialist planning, which would steadily lead to the withering away of market allocation of goods as production rose to meet perceived human wants, and along with it the disappearance of money and class inequality and the need for a state.
The structure of a socialist planned economy in its early stages as described covers a publicly owned sector, a cooperative sector and a privately owned sector with a market. Such a structure at first glance does not seem any different to that proposed by the leaders of the labour movement who advocate 'social ownership' or 'market socialism' They claim that the need for a 'totally' publicly owned economy is out of date as a definition of socialism. Modern socialism, they say, requires a mix of public and privately owned sectors; of markets and planned production.
The 'Com-
munist Party have also adopted with enthuslasm the market economy.
The 'Red Professor'
Hobsbawm (right) echoes the words of Roy Hatters ly and Brya Gould.
As Roy Hattersley put it: "There are
some areas where market allocation is
desirable and some where it is not.
There are some commodities which are
best allocated by the market system and
some which are not. There are some jobs which markets do well and some
which they do very badly" . But this 'balanced' view of the question hides the reality of Hattersley's position. There is a very big difference between a society where the major sectors of finance, industry, commerce and agriculture are publicly owned and run through a democratic plan and a society where the 'commanding heights'
are still owned by capitalists and where conscious socialist planning is restricted to a small sector ot the economy, ie the foothills, along with cooperatives. Such social ownership is just the old mixed economy under another name.
Roy Hattersley and Neil Kinnock even argue that the concept of social ownership is compatible with Clause 4, part 4 of Labour's constitution. But the history of that clause, explained in the Militant pamphlet, The History of the Labour Party, shows that when it was included in the Labour Party's constitution in 1918, it was meant to establish the aim to bring into public ownership the commanding heights of finance and industry. In 1937 Clem Attlee stated that under Labour 'land will be owned by the community... all major industries will be owned and controlled by the community". Labour's 1944 conference called for "democratically controlled" public ownership of land, industry and finance.
Even Hugh Gaitskell said in 1959 that
"we have no intention of abandoning
public ownership and accepting for all
time the present frontiers of the public
sector" . And yet that is precisely what
the present Labour leadership are doing
as they wilt under the weight of argu-
ment from the supporters of the market economy. Neil Kinnock's support for public ownership and democratic planning has undergone substantial revision since he told Marxism Today in June 1983 that 'it is inconceivable that we could ever transform this society without a major extension of public ownership"
Now apparently it is enough to have just 'public interest' companies among utilities like gas and telephones. That is where the frontiers are drawn now. 'Social ownership' is not a redefinition of socialism; it is an attempt to replace it with the tired old pro-market formula of the "mixed economy'.
When socialists advocate public ownership and planning to meet basic human needs, we do not have to support bureaucratically run nationalised industries of the type tormed under the Labour government of 1945-50, or centralised plans controlled by a police state as in Russia. The fundamental conception of socialism is that of socialised production through common ownership and democratically controlled planning that will for the first time enable society to organise consciously to meet human needs and lift the human race beyond the realm of material necessity into real freedom. There is no role for markets in that conception.
31
[page 32]