1. Introduction: Old Labour's "Socialist Clause"

3. Nationalisation

What is Socialism?

Preface: After Genoa - what way forward?

The bloody events at the G8 summit in Genoa 2001 mark a turning point in the anti-capitalist movement. Leaders of the world's eight richest nations slept in a luxury liner and junketed on five star cuisine. They were behind a 13-feet steel barricade, topped with barbed wire.

Meanwhile outside the six square mile exclusion zone, police shot dead young protester Carlo Giuliani, and brutally attacked and injured hundreds more. After Genoa, the G8 will hold their next summit in a remote resort in Canada's Rocky Mountains. In November the World Trade Organisation (WTO), focus of previous protests, will meet in Qatar in the Middle East.

Anti-capitalist protests

But, the representatives of global capitalism insist, they are "not running away from the anti-capitalist protests". Most people will think differently. However far they flee, however brutal the repression meted out against peaceful protesters, anti-capitalism won't fade away. The siege mentality of big business's spokesmen reinforces a growing sense of alienation - amongst young people in particular - from capitalism and its institutions. When Carlo Giuliani was shot, Tony Blair rejected calls for the summit to be suspended, arguing that the politicians should carry on with their "democratic" business. But it is precisely because he and the rest preside over an undemocratic system based on inequality, injustice, environmental destruction, debt and poverty, that the anti-capitalist movement keeps growing. In the last year, three million people have protested in 20 countries world-wide. Millions more sympathise with their aims. In an opinion poll in Britain 67% thought big corporations have more power than governments. 76% thought they put profit before people. Black and Asian youth in areas such as Brixton and Bradford are beginning to link the brutality and racism which they face daily at the police's hands and the vicious attacks on anti-capitalist protesters in Genoa and elsewhere. Where is the movement headed?

   Workers fighting privatisation in education and other public services are drawing the conclusion that they too are '"anti-capitalist". After Genoa many will want to consider where the movement is headed. At least 700 separate organisations were involved in the protests, voicing their anger and concerns on the streets. From the beginning, the anti-capitalist movement embraced many varied groups and ideas. Differences over strategy and tactics were already emerging before Genoa. The media focused on groups such as Drop the Debt and Oxfam which refused to participate in the Saturday demonstration of 300,000 because they feared it would be "hijacked" by "violent anarchists". But the main divisions aren't between those who support and those who reject violence. Most protesters, while condemning police and state violence, understand that smashing up shops and property and individual acts of violence by demonstrators, don't take the movement forward and can give politicians an opportunity to increase state repression.

Better organised

   Other debates are more significant. While spokespeople for the anti-capitalist movement such as journalist Naomi Klein praise its spontaneity, many involved in the protests are deciding that they need to be better organised. While other 'leaders' argue naively for a more 'humane' form of capitalism and for reforming institutions like the IMF and World Bank, radical young people and increasingly sections of workers, look towards a more fundamental change. Direct action and anti-capitalist protests outside the institutions of global capitalism raised millions of people's awareness of capitalism's iniquities and placed the spotlight firmly on the system as a whole. But by themselves, these protests cannot end capitalism. Even if its representatives are forced to the far ends of the earth, they will still meet and control our lives.

Ending capitalism

Ending capitalism requires mass movements involving radicalised young people, the urban and rural poor in 'developing' countries but with workers playing the central role. Two general strikes in Greece this year in protest at changes to the social security system brought the country to a halt. These showed why workers are not just one 'pressure group' amongst many but the decisive force with the potential, collective power to change society.

Socialism

With a world recession looming, the anti-capitalist protests are a foretaste of much bigger struggles to come. We will strive to link the anti-capitalist with the workers' movement. But being anti-capitalist is not enough. We have to be clear what we're fighting for. Socialism is about taking control away from the multinational corporations and rich elite and democratically and sustainably planning production for need not profit. The struggle for socialism is the only way forward.

1. Introduction: Old Labour's "Socialist Clause"

No-one seriously argues that the Labour Party today is socialist. Back in 1994, at the Labour Party Conference, the new Labour leader Tony Blair signalled his intent to drop Clause Four, the 'socialist clause', from the constitution. Clause Four stated that the aim of the Labour Party was: "To secure for the workers by hand or by brain the full fruits of their industry, and the most equitable division thereof that may be possible on the basis of the common ownership of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service." It was printed on the back of every membership card. "Common ownership" was taken to refer to the nationalisation of the major companies and financial institutions that control the economy, so that production can be organised to meet the needs of everyone, not to make profits for a few. The Economist, a journal written mainly for the bosses, explained at the time: "Clause Four stands for Labour's intellectual debts to Marx, for its origins as a party of struggling proletarians, for the politics of protest and confrontation."

After the collapse of the Stalinist regimes in Russia and Eastern Europe, many argued that there is no alternative to Capitalism. But is it the case that, unlike all other ways of organising society which preceded it, capitalism, the society we live in today, can't be replaced by a better way of meeting people's needs? Will it last forever with this or that small adjustment? Is this really the best that can be achieved by humanity? The Socialist Party believes it is possible to achieve a decent minimum wage, full employment, good education and health services. Homelessness can be a thing of the past. We can end inequality and poverty. That is what socialism is all about. When Labour leaders ditched socialism in order to support the market economy (just another way of saying capitalism) they abandoned any commitment to a decent minimum wage, full employment and a range of other policies. Today the Socialist Party campaigns for a new mass workers' party, uniting all working-class people and youth in struggle against the evils of capitalism.

2. What is the market economy?

New Labour, the Tories and the wealthy support the market system or capitalism because they claim it's the best way of meeting needs and improving production. Firstly they say people wouldn't buy things they didn't need, so capitalism has to produce goods people want and at a price they can be sold at. Secondly, competition between individual capitalists to get people to buy their goods means they have to become more efficient, develop new machines and better ways of organising production. The reason they are prepared do this is that they make profits. That profit motive is the driving force of capitalism.

Thatcher always claimed that the market allows freedom and choice of where you live, whether you rent or own your own house, where your children go to school, where you go for health care. But all this choice ignores one small fact - the vast differences in wealth and income that exist. For those on low pay or benefits, there is no choice about buying your own house in the suburbs, going private for health care, helping your children through university or buying them the computers and books at home so they can improve their knowledge and do better in exams. Some old people can't even choose to have heating and lighting to keep them warm because their benefits are too low.

Many working-class people are instinctively suspicious of the profit motive. In an opinion poll in Britain 67% thought big corporations have more power than governments. 76% thought they put profit before people. There is almost universal opposition to the destruction of the health service through creeping privatisation. There is deep suspicion of the drug companies. The underlying reason for this is that if something is being done for profit, the health considerations of the patient will come second. Already we know of drugs that are too expensive for the NHS or old people being refused operations. Although their quality of life would be improved, even if they only live for a few more years, in the warped estimation of capitalism it isn't worth the investment. They won't be working and producing profits but will be "a burden on the taxpayer".

3. Nationalisation

In the past the Labour Party and even the capitalists themselves accepted that the market economy left to itself wasn't sufficient. Past Labour governments nationalised public utilities like water, the railways, gas and electricity and old heavy industries like coal, steel, shipbuilding and parts of the car industry. They gave massive compensation to former owners who had presided over the decline, and in some cases complete ruin, of these sectors. Sections of big business accepted nationalisation of these essential but loss-making industries. Even Edward Heath as Prime Minister nationalised Rolls Royce when it was about to collapse.

Labour governments however invariably appointed merchant bankers, industrialists and often the former owners to run public corporations primarily to serve the needs of the private sector for cheap energy, industrial goods and services. The Socialist Party always demanded that these nationalised industries should be put under the control of democratically elected representatives of the working class. We also demanded that in any future nationalisations, the small savings of ordinary people should be safeguarded but compensation to former wealthy owners and rich shareholders should only be on the basis of proven need. It's ridiculous that the capitalists should expect us to buy these services and firms which have been built up on the backs of working class people. In spite of bureaucratic control, the pressure of the trade unions ensured that wages and conditions (especially for example health and safety in the mines) were improved in the nationalised industries.

That is why workers, whilst recognising that the public sector is run by bureaucrats, are totally opposed to privatisation. The nationalised industries also ensured that services which could not be profitable but which were socially necessary, for example, postal deliveries and transport in rural areas were provided. Because these nationalised industries were run bureaucratically for the benefit of capitalism the bosses were able to discredit them. Because decisions were taken by a bureaucracy often under the direction of the government, they were able to cut back on finances and services. In this way the Tories undermined the rail and coal industries then claimed they were inefficient because they were nationalised to justify their programme of privatisation.

Since 1979 they have handed over huge state assets, financed by the taxes of working class people and built up through their hard work, to big business at knockdown prices. They squandered much of the money they made on sales in tax hand-outs to the rich. With cutbacks in the labour force, capacity and new technology paid for by us, parts at least can be profitable. It's predictable that having been bought by people wanting to make a fast buck, they will not get the investment they need to provide services to meet the real needs of society.

4. Investment - Capitalism's contradictions

Gordon Brown, Labour's Treasurer, has repeatedly said that Labour would not be going back to the "tax and spend" or "borrow and spend" policies of the past. He refers to those governments such as in 1945 and the Wilson governments of 1964-70 which pursued a policy of intervention to nationalise or at least prop up ailing industries and of financing an expansion in the welfare state. These governments were operating in a world where production was increasing, more wealth was being created and there was enough to make concessions to working class people. Capitalism no longer feels so confident. The economic crisis of 1973 - 74 led the Tories, in the name of Thatcherism, to throw these ideas out. They couldn't stabilise capitalism through state intervention and it was best left to market forces. The main economic aim of the Labour leaders is to get the capitalists to invest. In order to do this the profits and wealth of the bosses have to be left intact. So rather than pursue social justice by making them cough up the taxes they owe and pay a wealth tax, the bosses in Britain are amongst the least taxed in the industrialised countries.

Public Expenditure

At the same time the Labour Government has reduced public expenditure and are only prepared to concede a minimum wage which will not inconvenience the bosses. In other words they hope British and foreign capitalists will invest in Britain and the bait will be a workforce on poverty wages, with no rights and security. There's absolutely nothing "new" or "modern" about this. It represents a bankrupt policy of supporting an out-dated system. One of the effects will be an extension of the humiliation of the means test and the destruction of working class communities through unemployment and poverty. The bosses are not really short of money to invest. Even if their profits were boosted further, they would need profitable markets for their goods. But capitalism is based on exploiting working-class people, that's where the profits come from. So, although there are obviously many goods needed to raise the living standards of working-class people, it can never pay them enough to buy back all the goods produced.

Labour's policies won't get the capitalists to invest but it will place the burden of the declining economy more and more on the shoulders of working-class people. The Socialist Party opposes market forces and capitalism. Even though it did develop production through new factories, equipment and through the development of mass production, this was at immense cost to working-class people and to the masses in the ex-colonial countries. It has never met the needs of the overwhelming majority of people either in Britain or anywhere else. And what is more it is increasingly unable to do so.

Boom Years

In the boom years after the Second World War, many working class people felt life was improving. Women went out to work in increasing numbers providing a second wage. Further and higher education offered opportunities for their children to have better jobs than they themselves had. Very few people now expect that their children's lives will be financially securer and more fulfilling than their own. In the major capitalist countries even during the economic growth of the mid 1990's 35 million people were without jobs and now a major recession is hitting both sides of the Atlantic.

The bosses are worried about the social consequences of such high unemployment. The capitalists often threaten that they will take their investment elsewhere if we threaten their wealth and privileges by establishing a socialist society. In those circumstances working class people of course would ensure that no machinery, equipment or other resources are removed. But in any case the capitalist system is in crisis internationally. In country after country they are confronting the opposition of the working class. That is why the Socialist Party supports the struggles of workers around the world and is part of an international organisation, the Committee for a Workers' International.

Capitalism is unable to fully utilise capacity now or new discoveries to revolutionise society. It is now a stumbling block to a potential vast improvement in people's lives. Instead of lifting the whole of society onto a new level, the introduction of information and other technology under capitalism is seen as a way of further undermining wages and conditions for working class people, throwing more onto the dole while others continue to work excessive hours. The waste of natural resources and pollution of our environment threatens not only our health but the future of the planet itself. We need Socialism.

5. Socialism and democracy

The socialism we are fighting for has nothing to do with the bureaucratic or 'top down' nationalisation of the past in Britain. Nor does it have anything to do with the former regimes of Eastern Europe and Russia which the Socialist Party has never called socialist. There, a planned economy was run by a bureaucracy who developed for themselves the lifestyles of millionaires and killed off the workers' democracy which began to develop after the Russian Revolution. Even so, because of the planned economy, production in Russia grew six and half times between 1918 and 1965. Eventually, control by the bureaucrats strangled the economy.

The bureaucrats were able to take over because of poverty and the lack of technology available to workers in what was a very backward country. The intervention of armies from eleven countries laid waste the country. The workers needed the assistance of revolutions in countries where the working class was stronger and technique more developed. Marxists always explained that it's impossible to establish socialism when enough cannot be produced to fulfil at least basic needs, or where technology cannot be applied to reduce the working week so that working-class people have the time and energy to participate in the administration of society.

To listen to the Labour leaders and the capitalists, you would think that capitalism is democratic. Due to past battles by working-class people you can cast your vote every five years for a government. But the decisions which lead to thousands of redundancies or to build motorways instead of railways or to evict thousands from their homes are made in the boardrooms of private industry and the finance companies, where working class people have no say. The only recourse you have is to strike and protest, what they call "the politics of confrontation", and they'd even like to take those rights away from us. Although in many countries working-class struggle has forced the ruling class to concede the vote and parliamentary democracy, in many countries they rule through bloody and repressive military dictatorships.

Even in Britain during the Labour government of Harold Wilson, a section of the ruling class discussed the possibility of a military coup. Whenever their system is in crisis they attack our democratic rights and are prepared to resort to dictatorial rule. Planning does not have to be done bureaucratically. The socialism we are fighting for would establish a planned economy through workers struggle, bringing the economy under workers' control and management.

6. A Planned Economy

Some socialists argue that there should be public ownership where appropriate at national, regional or local level, including co-operatives and employee share schemes. But this policy would mark a return to the old mixed economy of nationalised industries coexisting with private industry. In other words state intervention without any fundamental challenge to the power of the capitalists. This would still produce inequality and crisis. In a socialist society there would be nothing to stop people setting up cooperatives to produce specialist items and services, or running shops, small businesses or restaurants. These could play a useful role and at the same time the wages and conditions of those working in these enterprises would be safeguarded. Under capitalism some workers and middle management have been drawn to co-operatives such as Triumph Meriden motor bikes in the past or Tower pit today. Many have set up firms to tender for contracts in local authorities.

Far from being the realisation of a dream of being entrepreneurs, in most cases these have been a last-ditch stand after the workers concerned have tried to stop the sell-off of services or the closure of their workplaces. They sink their savings or redundancy pay into these enterprises. In effect they are buying back their own jobs or workplaces that they have built up in the first place. They then find themselves producing for a market controlled by capitalism and using raw material supplied by capitalism. They are not havens of socialism but are sandwiched between capitalist firms who can force them to compete by cutting wages and conditions and, if they wanted to, could force them out of business altogether.

Workers' participation schemes likewise give the impression of democracy. In fact they are nothing more than a glorified consultation and information exercise with no real power over important decisions. What is absolutely crucial is that the major companies and financial institutions should be nationalised under workers' control and management. 150 or so control most of the wealth and make decisions which affect everyone's lives. They have to be run socially and not privately owned, for need not profit.

7. Which firms should be nationalised?

If we are to resolve the problem of homelessness we would have to control the building industry, such as Wimpey and Laing, (four or five companies control 80% of contracts), their supply industry, land and building societies. As part of the rebuilding of the NHS and solving some of today's health problems, we would take over the major pharmaceutical and chemical companies such as ICI and Wellcome. Chemical firms are also suppliers of seeds, fertilisers etc for agriculture. We would need to look not just at ensuring the wholesomeness of food but also safeguarding the environment and water supplies from chemical pollutants. We would also have to take back into public ownership the utilities such as gas, electricity, coal, water and others privatised by the Tories and Labour. In order to develop most industries, the planning and administration of society and communication, we would need to nationalise the major companies producing technology.

Similarly for transport to be effectively planned with the least possible pollution and spoiling of the environment, we would have to take over the major firms manufacturing vehicles and other forms of transport. In modern society the vast majority of production is not an individual or a family matter. It's carried out in major firms bringing together thousands of workers, often internationally, in workplaces of a variety of sizes doing different processes. The wealth is actually produced by working-class people in co-operation with one another. Even the managing and planning in detail is not done by the wealthy who reap the rewards but by white-collar workers and middle management, many of whom are now in trade unions and suffer similar insecurity to workers. That is why the working-class, especially those organised in trade unions, have such a central role to play in changing society. Without their collective work nothing would be produced, transport would not run, communication couldn't take place.

In Marxist language production has increasingly become socialised. But when it comes to the ownership of wealth or the decisions about what is produced then it is an entirely different matter. Wealth is privately owned, used primarily for the benefit of an elite and the decisions are made according to what will produce more profits, not according to what the vast majority of people need. Socialism means that just as production has become socialised so should the wealth that's produced, instead of going into the pockets of a few individuals. Instead of planning resources to allow for profit, resources should be planned to meet the needs of people. Taking into public ownership just the top 150 firms, under democratic workers' control and management, with the establishment of a democratic plan of production, would mean that the levers of economic power would be taken from the grip of the Capitalist class.

8. Would it be difficult to plan the economy?

When capitalists talk about the market they are not telling the truth about their own system. Capitalism is more and more dominated by a few big multinationals. Even the distribution of food, for example, is not done by small farms producing for corner shops or markets but is coordinated by multinationals and vast supermarket empires. Prices are fixed by the parent company. 50% of British trade is between affiliates of the same multinationals. Mass production by these multinationals needs a lot of planning. General Motors decides what product is produced where, and sets targets, specifications etc.

Market research is really about predicting trends in demand for certain goods and receptiveness to new goods. Capitalists argue we couldn't plan the economy because it's too complicated. They say that the number of consumer decisions are so vast that they can't be planned for. Yet most needs hardly vary such as hospitals, education, housing, transport, food, clothing. It's not because it's too complicated that capitalism hasn't planned to meet these needs. It's because its not profitable enough. Planning itself is not a problem. It's the degree of planning and what the purpose of it is that counts.

9. Democratic workers' control and management

Under socialism all the resources would be brought together with the working class to plan production. From what was produced we would have to decide:

· How much to spend on common needs such as health, education, housing. Many Items such as food, transport and housing would have very low charges or none at all

· How much to allocate for those who weren't directly involved in production at the time, for example, old people, the young, the sick.

· How much to allocate for replacing worn out material or replacing old technology with new inventions.

· How much for the administration of society.

· How much for individual consumption.

Increasingly as we developed production more goods and services would be directly allocated, cutting out the market and exchange through prices and money. In a socialist society, even without an increase in production, the vast billions of profits and dividend payments, fat cat salaries and bonuses would become available for society as a whole to benefit from. The capitalists argue there are limited resources so you can't fulfil everybody's needs. Socialism is not just about redistributing wealth that's unequally shared now. it's also about generating new wealth.

But if resources were limited then we would have to decide democratically which needs should be satisfied first, the need of everyone for basics or of a few for luxuries. Planning by working class people would also eliminate waste and save expenditure on for example, social problems, by preventing them in the first place. For example, the same number of bricks can build houses or tower blocks or offices. Supposing a committee of working-class people including parents of young children and pensioners, were discussing the housing needs of their area. Would they have chosen to build high-rise flats, which have not only proved to be expensive to maintain but have led to many social and health problems? Planning an economy would also allow us to resolve some of the major problems facing workers such as those in the defence industry and nuclear power.

At the moment thousands of workers are involved in the production of armaments, especially as the British government has been willing to deal with every tyrant and dictator around the world. So we have the spectacle of workers in this country manufacturing weapons and providing services to armies which then use them in the main against workers in their own countries. These workers are often fighting for democratic rights or for the basics of life. Similarly we have a nuclear industry whose safety record is appalling and whose long-term effect on the environment could be devastating. Yet the workers in these industries feel they must defend them because the alternative is the dole and the destruction of their communities.

But capitalism offers no way forward as defence workers have discovered with the recent round of cuts where thousands of jobs have been lost. In a planned economy we would be able to discuss the best way of producing society's energy needs. We would convert the productive capacity now devoted to manufacturing weapons to manufacture socially necessary goods. New industries could be directed to regenerate areas such as Cumbria, which currently relies on both nuclear power and defence. The £billions now spent by the Tories every year on defence could also be put to immeasurably better use in building hospitals and schools and raising benefits.

Incentives

Supporters of the market argue that we have to recognise merit, that if there were no incentives of wealth then there would be no incentive to invent new technology or make discoveries. Yet most of the pioneering work on innovation doesn't enrich the people who do it but the companies who buy the patent. Many inventors lived in poverty. Many researchers today work on low pay and have uncertain futures as grants are cut. Many waste their skills on devising useless processes, like putting more air or water into food products, so the costlier ingredients go further or a new brand of washing powder or soap which is no more than duplication of existing products.

That's not to mention the wasted talents and experience of workers who have no say or have a say through suggestion boxes for which they get little reward. According to the Industrial Society 16,000 suggestions from workers were adopted by 103 companies. Dunlop saved £54,000 as a result of one suggestion from a worker. Many inventions go undeveloped because they would undermine a company's current profits. Half of Research and Development goes into defence. In a socialist society this would be freed for research into socially useful production.

10. How would decisions be taken?

In a socialist society we would be able to utilise new technology, computers and communications systems to work out what resources were available and what products or services were needed. New technology would be vital in another way. No matter what structures we decided on to involve everyone in decisions, they would only work if people had the time to participate. Through using new technology, putting the unemployed back to work, we would be able to cut the working day and week enabling everyone to participate in making decisions and in the general running of society. Many decisions would be made by elected representatives delegated by groups in local areas or workplaces.

Unlike most MPs they would not have a lifestyle or income different from the people they represent, but remain only on workers' wage. They could also be recalled, held to account and replaced at any time if those who elected them were not happy with the decisions made or the way they had represented them. Through new technology it would be possible to directly consult quite wide sections of the population. The day-to-day carrying out of decisions in individual workplaces would be under the direction of committees of workers in that workplace, industry or service.

11. Conclusion

Socialism grew out of the experience of the working class as they struggled for a better life. Working class people who live every day with the consequences of the unfairness and inequality of capitalism want to know how exactly their situation can be changed. The Labour government attempts to manage the existing economic system, and in the coming recession will find itself being forced to carry out crisis austerity measures on behalf of the bosses against working-class people.

Despite concessions before the last General Election, Blair and the rest of the Labour leadership are making it clear in advance that this is the road they intend to go down. If they do they will face the opposition of workers. Working-class people will be forced to struggle to defend themselves and to implement even the smallest of reforms. In the course of this struggle a choice will have to be made between accepting the restrictions imposed by a bankrupt and crisis-ridden capitalism or concluding that it cannot be put back on its feet that society would be better run by the working class taking control and reorganising it along socialist lines. The Socialist Party will be at the forefront of that battle - join us.