Nationalization Part One

In sundry European countries, but more especially in Britain, because Britain is the most completely Capitalist of all, there has arisen a practical demand for the "Nationalization" of certain great industries.

This demand is certain to be pressed in the case of several industries-notably railways and mines-to an issue; and the effort will probably be a victory for those who demand Nationalization. For these have the power of forcing the victory, and their opponents have no effective defence in action. It behoves us, therefore, to examine the origin, motive, object, and what is most important of all-probable result of this policy.

We must begin by clearing the ground of a false conception that this new policy of Nationalization is only a question of practicability and degree. Far from that, it is a revolution in principle.

Nationalization means the putting of the control of certain objects, that is the putting of "property" in them, into the hands of State officials: making them the property of the State, to be administered by the same political authorities as those who conduct State affairs in general.

Now it is clear that there must always be, however extended private property may be, some considerable field of economic activity which is thus nationalized. There must always be a considerable category of objects which are the property of the State and administered by its officials. If it were not so the State would have no power and so cease to exist. Political authority would fail and you would have anarchy. For instance: the weapons and all other instruments for the useful activity of those who preserve order and defend the State from aggression must obviously be the property of the State. And this category includes not only arms and armaments, ships and aeroplanes, but also housing, stores of food and clashing, and so forth.

But the State must own much more than this if it is to be an active power to the end of justice among men. It must own many buildings in which it exercises its activities, and it must control at any one moment stores of food and clothing and all other necessaries for the support of those who are directly its servants, over and above the police, the army, and the navy: such are judges and all the servants of the courts of justice, and all the various ministries and departments. This State property often appears in modern times as a sum of money rather than of goods, but that money stands for goods. We may say that at any moment the Government must be owning a certain proportion of the materials present in a community for this purpose alone of its own existence as a Government.

There is yet another category of things some of which in practice always are, and many of which should be national property: these are national property which guarantees a certain freedom of action to all citizens, which acts at once as a flywheel and corrective to individual effort and competition. Thus, highways, including water-ways, territorial sea-waters and the fore-shore, are, in all healthy societies, regarded as naturally or normally the property of the State. If they were not, individuals possessing them could exercise too great a control over their less fortunate fellow-citizens.

The same is true (though in this country the great aristocratic revolution of the seventeenth century and the destruction of the Crown has made too many people forget it) of a certain proportion at least of the great forests of the State and of heaths and common lands, and (in the judgment of the vast majority of States past and present) minerals beneath the earth. It is, further, to the advantage of the community that the State should have control over considerable productive arable estates. It is an advantage, that is, for the State to be endowed, as well as to have the mere power of taxation.

Ail this will be generally granted except by those who may still have survived from the ephemeral body of extreme theorists who flourished in England during the nineteenth century, and are now for the most part forgotten. Their theories-purely abstract and unworkable-would whittle down the control of the State, and therefore its economic power, to the least possible amount and brand it as an evil wherever found -even though a necessary evil. Such ideas were never seriously entertained by men at any other period. It was sufficient for them to appear, even as mere theories, for them to be refuted within a lifetime by the necessities of living.

If we mean by "Nationalization" that a certain portion, and even a large portion, of the economic activities within the State should be directly controlled by the State, there is no practical issue. All men, or at any rate the overwhelming majority of men, at all times and places are agreed and will remain agreed upon this matter. It is in practice necessary, it is. morally useful to the end of justice, and there is an end of it.

Wherein, then, does the issue lie? The starved and chaotic thought of our time will reply that the issue lies in the matter of degree. But were this a true reply there would be really no issue at all. The settlement of exact boundaries to an admittedly necessary province in any human affair is a matter for practical discussion. It does not involve philosophy. It may be, and is, conducted by men who are agreed upon first principles.

Thus, all will agree that there is a gradation in violence from a permissible blow to an assault, and in practice a court of justice must decide where the limit comes between the one and the other. All men are agreed that a slight blow may be taken as a mark of familiarity or as a jest, but that a violent blow is normally a wrong from which one must be protected. The establishment of the degree is left to commonsense in particular instances.

It is so, I say, with every practical matter in which degree is to be established. An issue only arises when fundamentally contradictory philosophies are engaged. Thus, if a sect of men should appear who maintained that a blow, however violent, was always legitimate; or conversely, that a caress, however gentle, was always wrong, then there would be an issue between them and the majority who hold no such fantastic theories.

Now there has arisen to-day precisely such an issue in the matter of Nationalization. No one doubts, I repeat, the necessary control of the State over some provinces, and those considerable provinces, of economic forces; nor does anyone doubt in connection with this the necessity of some greater or less measure of State Property. The establishment of the limits of these is it mere question of degree and could be left, as all such questions must be, to circumstance and common sense. The principle being admitted that the State acts for the good of the individual, and the principle being also admitted that private property is normal to man, the limits of State property would lie where, in practice, it does but safeguard the principle of individual property and the general life of the whole community. But a powerful sect has arisen which does not grant these first principles at all. It is fundamentally at issue with the philosophy upon which these first principles are based. It regards all private property in the means of production as immoral, because such forms of private property invariably introduce inequality of economic opportunity among men, and at the same time introduce what is called "exploitation."

Those adhering to this sect (commonly known as Socialists) usually regard inequality, and always regard "exploitation" as immoral; and to eliminate these two evils which they postulate as irreconcilable with any right living, they propose to eliminate private property in the means of production and to vest all that can be vested in the hands of the State. There is, indeed, here also a question of degree, for that enters into all human affairs. It appears in the formula "all that can be vested." It may not be at one time and place possible to put all the means of production into State hands. But the motive or principle at work is that all should be in State hands, and the possession of private property in the means of production reduced, as a necessary evil, to the least possible dimensions.

You have here the exact opposite of that ephemeral sect of which we spoke just now, the nineteenth century English theorists, happily defeated and to-day almost forgotten, who imagined that the control of the State, and ownership by it, was a necessary evil to be reduced to the lowest possible minimum.

Here it is important to define our terms.

The Socialist proposition on the wrong of economic inequality we can all understand. We hold it or do not hold it. We think inequality of fortune unjust, or we do not, and there is an end of it. But the Socialist proposition on "exploitation" requires further explanation.

By exploitation the Socialists mean the retention of part of the produce of a man's labour by some other man: and they say such retention is unjust.

Let us suppose two families exactly equally endowed in wealth in the means of production, the first possessing an arable farm worth £1000, the other a pasturage farm of exactly the same value. Granted the private property of each in its possessions, there will be a moment of the year-that of the hay-making-when the pasturage farm will require more labour than its family can supply. And this season will correspond with a slack time on the arable farm, for the haymaking season comes somewhat before the cereal harvest.

We may presume, therefore, that the family owning the pasture farm will, during the hay-making season, offer work to the people of the arable farm upon the following terms:

"If you will come and help us make the hay, your quota of work producing, say, ten tons of hay, we will pay you for that labour with five tons of that which you produce-half your total production upon our land."

Conversely, when it comes to the cereal harvest and extra labour is needed upon the arable farm, those who own it will make a similar proposition to their neighbours, who having gathered in their hay harvest are in a slack time. They will ask them to go and harvest and thresh, say, ten tons of wheat, and offer them half of the produce, five tons, in payment.

In either case the labourers produce a greater measure of wealth than they receive for their labour. They produce ten, they only receive five tons; in the one case of wheat, in the other of hay. The rest remains with the owners of the land. That process is called by the Socialists "exploitation." Those who have laboured are said to be "exploited" by those who only own, because a profit or surplus is levied by the owner upon the total population.

As it is a dogma with the sect of which we speak that labour has a moral right to the whole of that which it produces, this "exploitation" is necessarily in their eyes immoral. Even though an exact equality be reserved, even though, as in the special case we gave taken for example, the two "exploitations" cancel out one against the other, yet there has been "exploitation" in each case and therefore an immoral act.

To eliminate the opportunities for this, the Socialists should be pooled, that the two together as one economic unit (forming in our suppositions case the whole State) should be administered for the common good. Both families would labour upon both farms indifferently, obey the orders of officials either chosen by them, or appointed over them, and these officials would distribute (equally, according to one school of Socialists, but, according to all schools of Socialism, would at any rate distribute) the total produce. Its distribution would not lie in the hands of either of its two former "private owners."

What we have to examine then is (a) the origin, (b) the motive, (c) the object, and -much the most important-the probable result of these new theories in action.

It has proceeded historically thus. (I) A certain philosophy of common property perpetually recurrent in human history, was in modern times again propounded by a school of French thinkers, chief of whom was Proudhon, at the beginning of the nineteenth century. (2) This mere philosophical statement has been made of actual force in the modern world by the presence of an evil phenomenon known as Capitalism. But for the concrete evil, Capitalism, which this philosophy proposed to cure, that philosophy would have expended itself in a void. It was the actual presence of Capitalism in society which gave the matter upon which the new philosophy could act. It was Capitalism which fed and gave substance to the mere formulae of the Socialistic creed. The Socialistic creed we have already stated in its essentials. It is opposed to inequality among men even in material things, and it is this which gives it its essential mark, which is its condemnation of "exploitation": the fundamental tenet upon which all its further development reposes.

It is clear that the quarrel against "exploitation" -the demand that the whole produce of labour should go to the producers, even to those who are not possessed of the implements and land necessary to production--would have no practical effect, and would probably not have been even theoretically held by anyone for long, were there not certain real evils for which this abstract conception offered a remedy, and those real evils we find in Capitalism.