Red herring: equating socialism & nationalisation

Posted on July 19, 2013


Julius Malema’s Economic Freedom Fighters (EFF) has now emerged as a new, self proclaimed, socialist party. It plans to stage a mass rally at Marikana on August 17, marking the anniversary of the bloody fracture in the local trade union and political environment.

Dressed in their red berets, a la Hugo Chavez of Venezuela, the EFF talks of nationalising the banks, mines and monopoly industry and seizing land without compensation. These are siren calls to a large segment of the voting population and are shared — at least in part, if not always totally — by various trade unions and longer established political groups.

The South African Communist Party (SACP), for example, is an exponent of overall state control of the economy, albeit during a “second stage” beyond the “national democratic revolution” headed by the ANC. The Democratic Socialist Movement (DSM) and its offshoot, the Workers and Socialist Party (Wasp), likewise calls for the nationalisation of the “heights of the economy”.

So too do various groups allied to the Democratic Left Front (DLF) and the Black Consciousness September National Imbizo that is now allied to the EFF echoes the cry. Cosatu and the trade unions affiliated to the federation also proclaim their socialist orientation, support for nationalisation and backing for the SACP as “the workers’ party”.

What all these groups have in common is the policy of nationalisation, of state control at various levels of the economy — and a claimed orientation toward workers, the poor and the dispossessed. The media also generally associates any call for nationalisation with socialism and, by implication, with trade unions and worker movements.

Socialism has, therefore, become a blanket term promising much to the downtrodden and the sellers of labour, but a term hiding a multitude of agendas. It should not, for example, be forgotten that the English translation of Adolf Hitler’s Nazi Party was the National Socialist Party.

And this is no new debate; it is something that has arisen time and again over more than a century, encouraged by the idea among most groups of the professed political Left, that some governments, however repressive, were or are in control of “worker states”. Nationalisation, in such cases, was, and is, deemed — especially by orthodox Communist parties such as the SACP — to be in the interests of workers and not of capitalists.

Which is why Cosatu unions argue that if and when “the workers’ party, the SACP” comes to power, state control will equal worker control. But examples such as the former Soviet Union, China and North Korea do not seem to hold out much hope for workers’ rights.

However, the often brutal systems in such states were excused by the late SACP chairman, Joe Slovo as examples of “socialism where the element of democracy is missing”. But this explanation confused matters still further because Slovo professed to be following the ideas of Karl Marx for whom the extension of existing democracy — to one where the majority of people exercise social, political and economic control of society — was the essense of socialism.

In any event, the simple nationalism equals socialism equation, widely touted within the trade union movement, has become difficult to sustain. Especially when it is realised that apartheid South Africa had a higher proportion of its industry nationalised than did “socialist” Czechoslovakia. As a Stellenbosch economist noted in a television debate in the early 1990s: if nationalisation made Czechoslovakia socialist then apartheid was also a socialist construction.

Perhaps the radical American economist, Richard Wolff is correct in arguing, as he did in a televised debate last week, that “there are as many versions of socialism as there are of capitalism”. What he did not mention was that this conflation of nationalisation with socialism first came to the fore more than 130 years ago — and seemed to have been dealt with quite comprehensively.

The writer who dealt with it was Friedrich Engels, the collaborator of Karl Marx. In 1880, he referred to the nationalisation of several industries in European states as “a kind of spurious socialism”. He pointed out: “But the transformation — either into joint stock companies and trusts, or into State-ownership — does not do away with the capitalistic nature of the productive forces.”

In other words, it is the underlying dynamic that counts: do the workers control the enterprise and does it function — even if competitively — on the basis of the greatest good for the greatest number? Modern capitalist corporations function on the basis of directors having a fiduciary duty to maximise profits to the ultimate benefit of often anonymous shareholders.

Yet, as Wolff points out, even in this competitive, capitalist world, there are plentiful examples of the co-operative dynamic at work. He cites, in particular, the Mondragon Corporation of Spain. Started in the Basque country in 1956, with six people, this federation of co-operatives is now the seventh largest corporation in Spain and operates without the traditional, hugely remunerated executive hierarchy.

Mondragon of Spain, Fasinpat in Argentina and many other such enterprises show that massive wage and welfare gaps and ever-increasing profits for shareholders are simply unnecessary. For example, by the collective decision of the more than 83 000 worker members of Mondragon, the average ratio between the highest paid and lowest paid worker in any section is not more than 5:1.

There is no state shareholding let alone control in such enterprises where many of the members regard what they are doing as perhaps “a step toward socialism”. Most importantly, as Wolff argues, the existence of such organisations provides proof that the hierarchical, profit-driven model of conventional capitalism is not only unnecessary, it is probably harmful to the wellbeing of both people and the planet.

With the nationalism debate to the forefront and with a relatively plethora of proclaimed socialists aboard the state control bandwagon, this is where the debate should focus. Unions and workers in general, whether employed or unemployed, could also not go far wrong in adopting the favourite dictum of Karl Marx: Question everything.