The Labour Party will be well advised to seize the growing public mood in favour of public ownership of the railways, utilities, Royal Mail, the NHS and education, says ROB GRIFFITHS
For more than 100 years, the economy in Britain and other advanced
capitalist societies has been dominated by large corporations.
While many small businesses can still be found struggling to survive
and grow in numerous branches of industry and commerce, almost every market is
dominated by five, six or seven giant companies.
Between them, these big concerns monopolise most of the production,
sales, investment and employment in their sector.
They largely dictate the terms on which the commodities within their
sector — including labour power — are bought and sold.
This is one reason why references to “free enterprise,” the “free
market” and so on no longer correspond to reality, if they ever did.
How much freedom is there, for example, in Britain’s domestic energy
market today?
The “big six” monopolies command 96 per cent of sales, act as a
cartel to determine general price and wage levels — assisted by the fact that
most of them are major wholesale producers as well as retail suppliers — and
collaborate in an investment drought while pouring almost half of their profits
into shareholder dividends.
These positions, backed by big marketing budgets, ensure that
smaller and lower-price companies such as Ovo are kept out of the monopoly
market in energy supplies.
As Ovo managing director Stephen Fitzpatrick told a House of Commons
select committee and the BBC Today programme this week, the big six have been
engaged in a price-fixing racket to maximise profits ever since they emerged
from the privatisations of gas and energy in 1986 and 1990, respectively.
But the solution is not to force more competition into this or that
market, because the tendency to monopolisation arises from competition itself,
as the struggle for market share produces crises, winners and losers.
Successful companies drive the others out of business and grow as a
consequence.
The real solution is public ownership and planned investment,
production and consumption.
Terms such as “free enterprise” and the “free market” are propaganda
terms in the battle of ideas against social ownership and socialism.
They are intended to convey the false impression of widespread
price-lowering competition and meaningful choice for consumers, whereas the
monopolies compete mainly for market share while colluding to maintain high
prices.
The choice is usually restricted in practice, meaningless in
substance but exaggerated by big marketing budgets.
The only real freedom that exists is that for the monopolies to
exploit, dominate and extort.
Of course, in a system where governments and MPs have to seek votes,
a facade of regulation and accountability has to be erected.
So we have parliamentary select committees, ombudsmen, Ofgem, Ofwat,
the Rail Regulator and all the rest.
Anti-monopoly, anti-trust and anti-cartel legislation has operated
in the US since 1890, and in Germany since 1923.
In Britain the first but weak controls on price cartels were not
introduced until 1948 and anti-monopoly legislation dates only from 1965.
Yet for all the anti-monopoly commissions in the most developed
capitalist economies, the big companies exercise as much if not more economic
and political power today as they did since the US Congress passed the Sherman
Act more than a century ago.
Since then many of the top corporations have spread out across the
world in search of raw materials, cheap labour and new markets.
In his classic work, Imperialism: The Highest Stage of Capitalism
(1916), Lenin explained how monopoly capitalism is the economic essence of this
modern type of imperialism.
And just as the monopolies commanded the use of state power to
protect their interests at home, so they are served by the political and
military power of their home state in the promotion of their interests around
the world.
This explains the formation of Nato and similar regional military
alliances after the second world war, where British imperialism accepted the
leadership of US imperialism in a joint effort to defend monopoly capitalism
against the forces of socialism led by the Soviet Union.
The fusion of the economic power of the big corporations with the
political power of the state — what Lenin called “state-monopoly capitalism” —
has taken many forms.
In Britain these have included public-private tendering, government
grants and subsidies to the private sector, economic planning, wage controls,
anti-trade union laws, corporate lobbying and political funding, the public
appointments and honours system and the nationalisation of essential but
unprofitable or highly risky industries and services.
Most recently, new forms have arisen or become more prevalent to
meet the modern requirements of monopoly capital.
Most spectacularly, a whole battery of measures has been undertaken
to rescue capitalism’s financial system from collapse.
These include the pumping of state-backed funds into the financial
markets (“quantitative easing”) and partial or full public ownership of banks
and other financial institutions.
New levels of international state-monopoly capitalist co-operation
have been achieved, notably the “troika,” comprising the European Commission,
the European Central Bank and the US-directed International Monetary Fund.
Economic crises have usually accelerated the trend to monopoly.
This, too, is taking new or pronounced forms.
Thus the rise of hedge and private equity funds — private investment
vehicles funded by wealthy individuals and institutions, largely unregulated by
law in the US and Britain, which also use borrowed funds to buy and sell
aggressively in the stock, bond and other financial markets for high
returns.
Increasingly, both types of fund are buying into failing or
privatised businesses and extracting maximum short-term profit through selling
off assets and shareholdings.
It’s a kind of “vulture capitalism” akin to what was widely
denounced as “asset-stripping” when practised by companies such as Slater-Walker
in the late 1960s and early 1970s.
Today such vicious, predatory and anti-social corporate behaviour is
accepted as perfectly normal and largely acceptable in much of the business,
political and media world.
So we hear barely a squeak of protest now that — mostly US — hedge
and private equity funds have become the biggest shareholders in the
Co-operative Bank, the privatised Royal Mail and the blood plasma service which
supplies the NHS.
The vultures are swooping on other NHS services, hospitals and
schools in England as well.
This trend will further highlight the need for public ownership of
vital industries and services between now and the general election.
The big question will be whether the Labour Party leadership
continues to capitulate to vulture capitalism — or will it seize the growing
public mood in favour of public ownership of the railways, utilities, Royal
Mail, the NHS and education?
