State companies, capitalism and the left: a Marxist view

The slogan of the anti-sales campaign is, from the standpoint of workers’ class interests, at best meaningless and at worst nationalistic. It does, however, serve the purpose of uniting people across class and political lines. Marxists should challenge this rather than promote it.

by Philip Ferguson

One of the big problems faced by those of us who have campaigned around progressive issues for many years is lack of media coverage, let alone sympathetic media coverage.  Every now and then, however, the mainstream media will give significant coverage to an apparently progressive campaign, sometimes even exaggerating the numbers taking part.  Earlier this year I was struck by how the media in Christchurch exaggerated the size of the anti-Marryatt/Parker rally, a product of the growing hostility of the Christchurch Press to some of what was going on in the city council (for our coverage, see here).  Environmental protests also often get sympathetic media treatment.  Struggles by workers, although occasionally getting some sympathetic coverage, are much less likely than ‘safe’ issues, like anti-mining or anti-whaling, to get such treatment.

This past weekend protests against the sale of minority shares in state-owned enterprises garnered massive, sympathetic coverage on the main Saturday news programmes on Prime (which uses Sky News), TV1 and TV3.  Given that these were far from huge marches – a few thousand in Auckland, somewhat less in Wellington and less again in Christchurch, along with small protests in smaller centres – this was one of those not particularly common times when the coverage was notably greater than what might be expected from the size of the protests.

The sort of sympathetic coverage the campaign against the partial sale of state-owned companies has been getting is partly a reflection of differences within the establishment.  No serious bourgeois economic commentator, for instance, really believes these sales will make much difference to boosting investment in the productive sector or give the government lots more money long-term to pump into infrastructure.

It’s even a funny sort of flagship policy for the Nats and is perhaps more of a reflection that Key and co aren’t interested in pushing neo-liberalism but have to look like they’re doing something significant to drive the economy.  It’s certainly a long way from the relentless full frontal attacks on the whole working class by the ruling class and its political managers in Labour and National in the 1984-93 period.

While this helps make the ‘state assets’ issue safe for the media, it also makes it ideal for the tiny, fragmented ostensibly Marxist groups too.  Unable to generate anything themselves, here is a ‘movement’ they can attach themselves to, find a comfort zone in, and hope to gain some recruits from.  Doing this, however, requires politically adapting to the politics of the spontaneous movement.  Thus such groups embrace the slogan “Aotearoa is not for Sale”, which might sound good as a soundbite but is, when examined, vacuous at best.  What does it even mean?  Given that this country has a capitalist economy, of course chunks of it are for sale.

Among the left groups embracing this soundbite is the Workers Party, the only left group which maintains a newspaper.   “Aotearoa Not for Sale” is the heading for their leaflet on the partial sales of the state’s own capitalistically-operated companies and the main point they make is that the country is not for sale to local or foreign capitalists.

I assume they think this is putting Marxism into the issue.

While it’s certainly positive that they have tried to counter the nationalistic argument around sales such as these and the Crafar Farms, there’s a bit more to Marxism than that.  Indeed, even their anti-nationalism is rather undermined by the slogan itself as the slogan concentrates on the country rather than the class interests of workers.

Moreover, the very title of their leaflet assumes, implicitly, that Aotearoa is already “ours”.  Otherwise, why say it’s not for sale?  Who cares if our next door neighbour sells their car?  We only care if they try to sell our car.

They also refer to the state-owned companies as “public assets”.  OK, we all use shorthand or imprecise terms, and it can be silly to pick people up on these all the time.  However, the term “public assets” is misleading and, added to the “Aotearoa not for Sale” line of WP and other left groups, it seems even more the case that they are suggesting in their party leaflet that these companies are “ours”.

However, they certainly are not.  And here’s where a bit more depth in Marxism is handy.  These assets – or, more strictly speaking, these companies – belong to the state, not the “public” and certainly not the working class.  So referring to them as “public assets” can only suggest that the state and the public are either the same thing or at least very much overlapping.

A Marxist approach, by contrast, would explain what the capitalist state is and how companies owned by the state are often not much different from private sector companies.  It can actually be harder for workers to fight the employer when the employer is the state than it is to fight a private employer because bosses in the private sector are often more vulnerable to industrial action.

It’s also necessary to have an understanding of how the state sector fits into the capitalist economy and why chunks of the state sector have been turned into profit-making companies.  For instance, in the 2010-11 financial year Mighty River Power made a net profit after tax of just over $127 million.  It did this because it pays the workers it employs less than the total value that their labour-power creates, just like a private employer.

There is, of course, a difference, in that this profit goes to the government rather than private investors.  However, all this means in practice, in terms of the economy as a whole, is that the government can raise more money without higher taxes on corporates and rich people.  It means that the state itself becomes a capitalist exploiter, rather than simply the guarantor of the smooth operations of the system.  The state now directly exploits sections of workers and accrues surplus-value directly from that exploitation.  So workers are not any better off at all by the state operating as a capitalist.

There is an attempt by at least one WPer to develop a more rounded position; it’s an article by Ian Anderson in May.  It makes some good points, but ends up rather muddled.  For instance, having quoted the great Irish revolutionary James Connolly that public ownership should only be supported to the degree that workers are ready to run it, he then goes on to support campaigning for “public ownership” in the here and now.   But if workers in New Zealand in 2012 aren’t at the point where they’re ready to take over functions of government, why use Connolly’s quote as if it is relevant to the concrete conditions here today and can inform a political position here at this point in time?

At the  end, the article uses the term “public ownership” as if it’s a step in the right direction, even though the author points out earlier in the article that “public ownership” at this point in time in NZ often involves producing goods and services as commodities anyway.  So, even when the article makes a good analytical point, there isn’t a logical connection between it and the political position the article takes on state-owned enterprises.   If the analysis is correct, then the logical political position would be not to get too excited by the shift from the state acting as a business and exploiting workers to the state having 51% ownership of these businesses and 49% of the shares being in private hands.

Essentially what the Workers Party has done is completely conflate privatisation (or in this case partial privatisation) with corporatisation.  But these are already corporates, they were turned into corporates by the economic reforms of the fourth Labour and fourth National governments.  They’ve been capitalist businesses for several decades.  They are not the same as the old state-owned nationalised industries; they are the result of the break-up and corporatisation of those old institutions.  While the Ian Anderson article, as noted above, does briefly recognise this, it doesn’t draw out either the economic or political significance of the change.  Instead, it simply moves on and advocates a political stance which might be relevant if we were back in 1984, before the old government departments and nationalised industries were broken up and turned into capitalist companies but makes no sense (from a Marxist standpoint) long, long after these have already been corporatised.

In New Zealand – and this is true of similar places such as Australia and Canada – most of the working class have two main illusions that blind them to their own class interests, illusions which are generally shared by most progressive people outside the working class as well.  One is in nationalism and leads to domestic forms of nationalism being counterposed to ‘foreign’ ownership, when in fact all capitalist ownership is alien to the interests of workers.  The other illusion is that the state is somehow “ours” and can be the vehicle for our side winning the things we need.  While some small left groups have countered the first illusion, they have tended to reinforce the second illusion by adopting the liberal-reformist rhetoric that the state, or at least parts of it – in this case parts that actually exploit workers – are somehow “ours”.

A good example of this illusion is provided by the International Socialist Organisation.  An article by long-timer ISOer Corey Anderson (http://iso.org.nz/2013/05/01/socialism-and-the-campaign-against-asset-sales/#more-1339) begins by pointing out some basic facts about state ownership and the way it serves the interests of capital (paragraph 2) but then subsequently seems to forget this and claims, “People have come to expect a more comprehensive and less costly delivery of goods and services from state-owned corporations which are at least supposed to act in the interests of the people, not the board of directors or private shareholders.  The existence of an alternative model can give people hope and encourage them to dream of bigger and better things.”

But virtually everything here is wrong.  Who, with any experience of state-owned energy companies, expects them to provide less costly services?  In fact, energy prices have risen substantially since the old MED was broken up and converted into state-owned corporates.  Moreover, as already noted, the SOE legislation requires these enterprises to *maximise profits*.  No-one who knows anything about SOEs expects them “to act in the interests of the people” because they were specifically set up *not to* – they were specifically set up to make the largest profits possible.  And how is state capitalism “an alternative model” to private capitalism?  Indeed, since ISO has opposition to state capitalism as one of its core principles, this is a very odd thing to argue indeed.  It’s another indication of how principles are subordinated to short-term tactical considerations.

Why not simply tell workers the truth about the state and its operations as a capitalist exploiter?

The would-be Marxist groups either don’t understand how capitalism works and how the capitalist state fits in or, if they do, they prefer not to share these insights with workers and others protesting the partial sale of these state-capitalist companies.  Instead, they tail along behind existing levels of consciousness and illusion, merely offering some tactical thoughts on how best to go forward.

Not long ago this was the standard approach of the largest left group, Socialist Worker.  Anything that moved, SW was on the bandwagon, talking it up and offering mere tactical advice as if the activists in this or that movement were incapable of working out tactics themselves.  This approach led to SW going round and round in frantic but ever-decreasing circles of activism, until the organisation was finally exhausted and gave up the ghost.  What were SW politics ten years ago are the politics of the remaining ostensibly Marxist groups today; the vacuum left by SW has been filled by different groups but the same politics.  Nothing has been learned.

Further reading: Class, class consciousness and left political practice