In June 1920 Vladimir Lenin issued a publication entitled �Left-Wing Communism � An Infantile Disorder� in which he reviewed for his European revolutionary comrades what he had learned from his involvement in three revolutions during the past decade. His principal conclusion in the pamphlet was that the left-wing of the international socialist movement maintained its militancy and revolutionary fervour as an overweening policy while the Bolsheviks, now in power, had to get on with the real world of administering a country.

He wrote �The "revolutionary" leaders of the Second International, such as Kautsky in Germany and Otto Bauer and Friedrich Adler in Austria, failed to understand, and therefore proved to be reactionaries and advocates of the worst kind of opportunism and social treachery. This very clearly reveals their whole process of thought and their whole circle of ideas, or, rather, the full depth of their stupidity, pedantry, baseness and betrayal of working-class interests -- and, moreover, under the guise of "defending" the idea of "world revolution."[i]

The content of Lenin�s pamphlet has been immediately recalled and highlighted as a background to the current battle within the British Labour Party about returning to its �roots� with the campaign manifesto of one of the contenders for the leadership, Jeremy Corbin. Corbin has insisted on a policy of returning the Labour Party to its founding principles by adhering to some of Labour�s core beliefs and abjuring the modernising influence of the �Blairites�.

It is not a coincidence that some of these founding principles of the Labour Party to which he refers were adopted by the party at the same time as Lenin wrote his pamphlet. Perhaps the clearest, and most enduring statement of this principle is enshrined in Sidney Webb� 1918 Constitution of the British Labour Party; the famous Clause IV (paragraph 4). This stated:

�To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.�

This clause remained a part of British Labour bedrock philosophy until its revision in 1995 and the subsequent dropping of the demand for public ownership. Even in British Labour Party politics Clause IV (4) didn�t mean the common ownership of the means of production. It meant state control and ownership of things like the Bank of England, the National Coal Board, the British Rail, British Steel, etc. That is, the government would �own� the industries and would manage these industries on behalf of the citizens. It meant that the government would manage these industries and use the fruits of their management to reward the working people employed in these industries appropriately.

In fact the public ownership of these companies and industries had just the opposite effect; working people suffered most from the inherent faults contained in such nationalisations. The centralisation of economic power in the hands of a political leadership was an expensive disaster for the British economy despite the good will and commitment of British socialists to social justice. Nationalisation put economic principles of management below the importance of political necessity.

I have been an international trades unionist for over fifty years and I have had many first-hand experiences with the failures of nationalisation and public ownership in a relatively large number of countries. I should like to address the questions of nationalisations and public ownership from the point of view of the labour movement and from my personal experiences.

One of my first experiences in Britain was when I was asked to attend a Parliamentary subcommittee enquiry into some proposed rationalisations of British Steel; a company that was losing around �1.3 million a day. I sat in on the hearings and was appalled at the sheer incompetence of how public ownership worked. British Steel, to solve its cash flow problems, was trying to get permission to go outside the Budget to raise capital on the public and private equity markets. The public purse could not sustain a continuous loss of this size. The head of the Parliamentary committee started by asking �How many people are employed by British Steel?� No one from British Steel had the answer. Bill Sirs of the iron and steel union said he had no idea. David Warburton from the GMB said he didn�t know how many of his members were employed there. The treasury representative said he had no idea. The next question was �What do you intend to do with the money you raise and on what schedule will you receive the money and repay it?� British Steel and the unionists agreed that nothing had been fully planned because they wanted to see how much they could raise first. The Treasury spokesman said the issue had not been raised with them. The answer was that there was no effective management structure in place in British Steel and no one with any sense of responsibility for financial matters. The unions, too, had failed to do their job and were happy to use their influence within the Labour Party to promote their interests in the nationalised industries for wages and improved working conditions without any reference to the finances of the company.

The Parliamentary committee insisted on knowing, irrespective of whether they were able to raise money themselves, how they intended to lower costs that were causing such losses. British Steel took out a map of all its iron and steel plants and showed that across Britain there were clusters of two plants together, a liquid iron plant and a steel plant. British Steel said that they would close some of these plants. They said that wherever there were two plants together they would close one to reduce the impact on the community (and on the local MP). This was agreed in principle. However, the unions pointed out that they didn�t want reductions but, most importantly, closing these plants would raise internal transport costs by 18%. You would have to arrange for the transport of iron from the iron plant to a steel plant located further away. Shutting down one of a pair of plants was the most costly way to proceed. However, the political argument over sharing the political impact of the plant closures won and British Steel closed several matching plants (except in Ebbw Vale which was Michael Foot�s constituency). British Steel graduated to losing �1.9 million a day.

The point is not that British Steel was a shambles, as were the railroads and the coal board, but that the political considerations of the party in power dominated the management structure of the company and constrained its choices on how to adapt to commercial challenges. There was only one common pot, the Treasury, and all the nationalised industries drew from that same pot. The Treasury admitted that there was no branch of the Treasury devoted solely to nationalised industries and that there was no one within the Treasury who had worked exclusively on British Steel for longer than six months. Nationalised industries were effectively political extensions of the ruling party and business decisions were secondary. This is what I found in most nationalised industries across the world.

When the coal strike started in Poland under Solidarnosc there was a shortage of coal in Europe. Some of my colleagues in the CISL unions in Italy asked me to see if I could arrange the sale of 80,000 tons per month of steam coal from Britain for two Italian power plants. I went to the British National Coal Board, which was busy closing coal mines in Britain, asking if I could buy 80,000 tons of coal a month. They said they were happy to sell me the coal and offered me a price for the coal. The price they offered me was almost double the world price. I pointed out that I could buy U.S., South African and Turkish coal for half the price. Why were they offering me the coal at such a high price? They explained that they were a nationalised coal company. Their pricing was set by a committee at the beginning of every year. This committee of specialists evaluated the amount of coal that Britain needed for the coming year and allocated the quotas for this coal to British mines. They then set the price for this coal based on what it would cost to keep these mines profitable. That became the price for the next year. They said that if they sold the coal to me on the basis of the world market price they would have to sell the coal to the British power stations at the lower price as well and that they could not do. So they subsidised the British mines by paying high prices and were unable to compete internationally because �their hands were tied�. They continued to lose almost �2.1 million a day in the coal industry but that was no impediment to their pricing policy.

It was no different in other nationalised industries. I was asked to buy a large number of step-down transformers for the Nigerian Electrical Power Agency. Power stations produce electricity at 25,000V. Electricity is sent through the National Grid cables at 400,000V, 275,000V and 132,000V. This is because high voltages improve efficiency by reducing heat loss in the power lines. But high voltages are too dangerous for use in the home, so step-down transformers are used locally to reduce the voltage to safe levels. These were urgently required. I went to some of the British suppliers for a quote. GEC quoted me a price which was forty-five per cent more than AEG in Germany or Phillips in Holland. I asked why the price was so high and they told me that their only customer in the UK was the Central Electricity Generating Board, a nationalised industry. It was obliged to buy British goods. The manufacturers in the UK agreed a base price for the stepdown transformer boards among themselves which was set very high so there was virtually no competition. The CEGB paid that price. GEC told me if they sold to me they would have to sell at the lower price to the CEGB and that was not possible. This was the rule throughout the nationalised industries. They paid a very high price for goods and services as they were the monopoly buyers.

These anomalies were characteristic of nationalised industries. They were uniformly run at a loss and subject to cartel pricing of inputs and prepared to squeeze the workers to try to reduce the daily losses. The unions had political constraints on how far they could push the nationalised industries to improve wages and working conditions, especially under a Labour government, without risking severe political consequences. In short, nationalised industries were a financial disaster for the country as a whole and for working people in particular. To talk about returning to such a system is evidence of an absence of memory and a commitment to left-wing infantile disorders.

The disasters of nationalised industries were not specific to Britain. Their situation was a worldwide phenomenon. I was at my desk in 1969 when I received a call from the Zambian metal and mining workers� union in Lusaka. They said they needed our help. They informed me that the Zambian Government had nationalised the copper mines and had created a parastatal company to run the nationalised industry. The Zambian unionists were very upset. They said that before the nationalisation of the mines the Zambian Government had worked closely and co-operatively with the metal and mining unions. The government was able to apply pressure on the private mining companies by their close relationship with the unions. They managed to use the threat of labour militancy to help raise prices, reduce costs and improve wages in the private companies. However, the moment that the nationalisation took place the unions became the enemies of the government. A new Labour Court was established, the rights to strike and protest were curtailed and unionists were removed from their posts as dangerous agitators. The government said that they were acting �for all the Zambian people� so the unionists had no right to oppose government policies and to seek higher wages than those in the Civil Service in general. As this nationalisation took place just before a worldwide slump in copper prices the decline in copper export values created havoc in the labour movement. Nationalisation is never labour�s friend.

If there are any who believe that state-ownership is productive they should take a look at South Africa. The state-run corporations that have shaped South Africa's economy and been part of its everyday life for nearly a century are mostly in a state of collapse, threatening to crush already weak growth.� Economists estimate that underperformance and inefficiency in state-owned firms ranging from power utility Eskom to South African Airways (SAA) to the postal service is lopping 2-3 percentage points off annual growth. "If we do all the calculations, most probably a lot of the missing growth in the economy is because state companies are not working," said William Gumede, a professor at the University of the Witwatersrand School of Governance.[ii]

The Post Office is a good example. It is losing R100-million a month due to poor financial management, despite a R1-billion ($77.34-million) loan guarantee from the state. State-owned companies, which currently account for about 20% of all capital investment, have arguably always been a drain on state resources.
By the late 1980s the government directly or indirectly owned almost 40% of the industrial sector, greater than that in any country outside the communist bloc.
This became a tradition and was incorporated into the ideology of anti-apartheid.
When Nelson Mandela took office in 1994, state entities became the engine of efforts to correct racial and economic imbalances, sucking up vast resources to roll out electricity and other essential services to the black majority.

But affirmative action, also part of this adjustment process, under President Jacob Zuma has bloomed into cronyism, with competent candidates often overlooked in favour of political appointees. There are as many as 700 parastatals employing hundreds of thousands of people. The worst is Eskom, the sometimes provider of electrical power. Eskom, which halved its net profit in the financial year to March and needs to borrow more than R20-billion ($1.6-billion) to refurbish its ageing infrastructure, has implemented rolling blackouts to avoid overwhelming the national grid. Eskom is a byword for incompetence, industrial failure and political cronyism. This common in most nationalised industries.

This was equally true in the Soviet Union and. later, Russia. According to the communist system all property belonged to the State and was administered on the peoples� behalf by the vanguard of the proletariat, the party. This made legitimate strikes unknown. Only sporadic workers� actions in the Donbass, the White Sea Canal and the June massacres in Novocherkassk reached the ears of the world. One of the first protest movements� which appeared at the twilight of the Soviet system was the rise of working class protest movements like the wildcat miners� strike in 1989; the formation of SMOT in Russia, the SLOMR in Rumania and, of course, Solidarity in Poland. These protests were aimed at defining a role for unionists in an emerging non-communist system and the need for the removal of blanket control of industry by the Party through the continuation of purely nationalised industries. This is what is happening now in China.

I was at a gold mine in Yakutia (Sakha Republic) which was being privatised in around 1993. I asked the local union leader (not the official union leader but the unofficial leader) why everything was taking so long and was so difficult, He told me it was because everything belonged to the People. He said that this was the system they had worked under for decades. However, he said �There are People and there are people. Some People carry cards identifying them as People. We are the people without cards so we are not really People. It doesn�t belong to us�

In summary, it has been my experience in many countries that nationalisation has meant disaster for unions and for working people in general. The intervention of politics in management creates situations which are less than efficient. These nationalised industries have poor records in raising cash or attracting investments from private enterprises. This is very important because in most of the nationalised industries massive investments are needed in infrastructure (mining equipment, drilling gear, rolling stock, excavations, etc. long before any revenue is earned. Sustaining start-up losses is a tricky business for a nationalised company and the only area which can be squeezed is labour. Perhaps the ideologues calling for nationalisations should reflect on the terrible toll such policies will bring to the working classes whom they pretend to represent. Ideology is no substitute for practical experience; it is, as Lenin said, infantile.

The problem in Britain is clear. No one in the political parties of the Left or the unions and similar groups associated with them can tolerate being attacked from the further Left. Attacks from the Right or by arch capitalists are no threat. However, an attack from the Left is disorienting and disturbing as it threatens the value system and self-identities of those who consider themselves dedicated to social justice. Those who attack from the Left are assaulting the values not just the policies of Labour loyalists. That is the legacy of the Scottish Nationalists. In the last referendum the Nationalists attacked Labour in its Scottish heartland with a series of policies much further to the Left than the Labour Party maintained. The Labour Party, which had to appeal to the electorate throughout Britain could not commit to far Left policies without risking electoral annihilation in the UK south of the border. It was caught in the bind of advocating a modern, competent policy of government for the whole of the UK while competing in its heartland with the primitive infantilism of the Scottish Nationalists� rants about the �sell-out� of Labour in Scotland. The Labourites could not stomach being attacked from the Left and now they are reacting by trying to regain their left credentials by out-Lefting the Scottish Nationalists. It will not work and Jeremy Corbin, the embodiment of Leftish infantilism, will prove to be no electoral draw for any but the young who have no memories of life with Clause Four and self-loathing socialists whose stature and self-worth have been damaged by the attack from the Left.

So Lenin was, ultimately, right. The Trotskyites, social democrats and anarchists who railed against the Bolsheviks who had to try to adopt their ideology to the actual functioning of the Soviet state, were an infantile opposition to the realities of power. The fact is that working people and their unions have not functioned well under either the Bolsheviks, the Socialist Left or the Revisionists. They have survived despite the ideologues. They don�t have a dog in the current race for the Labour leadership; it is reserved for politicians.