Special Reports



It is rather obvious that nationalisation is a process that involves some entity appropriating the property of another entity for the advantage of yet another entity. Who are these entities?

Clearly the first is a nation-state; while the second is assuredly the property of private individuals of means, or congeries of the same, such as joint-stock companies.

The third are ostensibly the people!

The historic origins
This immediately restricts the phenomenon in modern times to only a very few countries until recently. The nation-state really only came about with the great cycle of revolutions that created the modern bourgeois world, the Dutch War of Independence, the English Civil War and the French Revolution, which all involved massive popular participation, prefiguring democracy. As an authoritarian reaction there came about the unifications of Italy and Germany, with rather different results.

In the first three cases of revolution, they involved revolts against absolutist states - in the latter two the recreation of them, those of Piedmont and Prussia, in a new more inclusive form, becoming precisely Italy and Germany. Their economies were all converting or being converted to free market capitalism, involving private ownership of vast amounts of property - and yet at the other end of the social scale a lot of poverty and deprivation, more especially in the underclass, the workless and the joyless.

The Industrial Revolution was under way, with a huge polarisation of society as a consequence. In these perilous circumstances it is hardly surprising that there were those who advocated condign expropriation of the rich for redistribution of their property to the poor. The first stage of this planned social redemption was to be precisely nationalisation, as a prelude to universal emancipation.

In The idea cropped up all over the place, notably in the great cycle of revolutions in France from 1789, through 1830 and 1848 to 1871.

But none of them came off. There was something impractical in the implementation of the same. That is as regards the West.

Yet there were prescient people who understood that socialism, viz nationalisation, had a future all the same. They were not in their own persons true believers; far from it. But they understood that a historic phenomenon of no small proportions was in the making.

Hence Heine in the 1840s when he knew Marx, but did not share his radical sentiments: “Communism is at the moment lurking in the dingy garrets of obscure intellectuals. But one day it will turn the world upside down. What will be the consequences of that I do not know.”

Then Nietzsche in the 1880s: “Socialism (then much the same as Communism) has a great career ahead of it. It will do better and better. But however well it does, the reaction against it will prove to be the stronger. And that will be the defining moment of human civilisation.”

The latter is perhaps the mos t brilliant prophecy ever made. But then it was made by an intellectual titan, who also, before he went quite mad in 1889, prophesied that the twentieth century would be one of world wars ('when the blonde Teutonic beast goes on the rampage the the world will shudder'), culminating in the greatest ideological battle of all time, the Cold War, but subsiding as a massive anticlimax into an endless vista of Anglo-Saxon suburbia.

Nietzsche foresaw that war would bring extreme solutions to the fore. The advent of war in 1914 gave a fantastic boost to nationalism – and hence to ideas of nationalisation as the answer to many a problem in a people's extremity!

The First World War gave the fanatics and the revolutionaries their chance. The war was being fought after all by the one indisputably nationalised ins titution, the army. Actually the armed forces as a whole. The people were being mobilised as never before – ostensibly f or national survival and regeneration – but why not for an even greater cause?

The Bolshevik Revolution
In 1917 came violent eruptions in the East. First came the tumult – then the downfall of an autocracy - that in Russia no less - in February of that year.

Then there came a most momentous event in human history, the October Bolshevik Revolution. This involved, after various shifts and turns, inter alia, the first extended attempt in history to implement a planned, totally nationalised economy.

The nationalisation of industry, the collectisation of agriculture, the common ownership of everything was proclaimed and decreed. It didn't quite work out. Indeed it led, not to the enrichment of the multitude, but to the pauperisation of the entire society, excepting the ideologues in charge. Even they had only a furtive, indeed frugal, prosperity. A dire time for all.

Marx would have been horrified beyond belief at the consequences of his ideas being implemented in Russia, a country he always despised. So did Engels.

The very idea that the birth of human liberation should have taken place in the very citadel of tyranny, 'the prisoner of nationalities,' would have revolted him. So, indeed, t he ultimate irony, did it the very people who set this absurd project up, Lenin and Trotsky.

If there was one thing that these brilliant intellectuals, westerners to the core of their being, shared with Marx and Engels, it was supreme contempt for the backwardness of the Russian world and all it stood for. It all ended up with Stalin and his infernal cult, Stalinism, the very antithesis of everything they believed in and fought for. An obscurantist Oriental dispensation of fanatics, which led straight to the Gulag and untold horrors.

But they we re not all untold – Solzhenitsyn to the fore is the supreme exemplar of the human spirit in a crisis. He bore witness to the terrors and crimes – and to the effect!

The end-story here comes with 1989 and the collapse of communism. But this was only with the totalitarian version of the protean idea of a planned utopia.


There was always an alternative vision – to combine the sublime socialist ideas with democracy.

There is no=2 0starker statement of intent here than the notorious Clause Four of the Labour Party in the very cradle of the Industrial Revolution, the UK, the very place that the Marxists hoped and expected it would all happen. It called for “the socialisation of the means of production, distribution and exchange.” It was always intensely controversial, threatening a political revolution even more comprehensive than the industrial one.

However, its proponents in the UK were the Fabians, people of high moral character, mostly of upper class or middle class origin, truly appalled at the distressed condition of the working class and even more of the unemployed and destitute beneath them. But they preached “the inevitability of gradualism,” along the lines of Fabius, the Roman general who confounded Hannibal, the great Carthaginian general, a titan of ancient history, by tactical retreats, drawing his adversary in, beyond the Alps, to lowland terrain more favourable for the Roman forces. The Fabians were opposed to revolution, just as Fabius was opposed to a frontal conclusive battle.

So was Keir Hardie, the founder of the Labour Party, a party admitted to power because of the advent of democracy. the advance of which, he thought, would be supported by all those of good will, in all classes of society.

The admixture of Mill
The magisterial admonition and rebuttal of Clause Four was administered avant la lettre by no less a figure than John Stuart Mill, a prodigy beyond compare, fluent in Latin and Greek at twelve, proficient in French and German at fifteen, several languages thereafter.

This is what the sage had to say:

"If the roads, the railways, the banks, the insurance offices, the great joint-stock companies, the universities, and the public charites, were all of them the branches of the government; if, in addition, the municipal corporations and local boards, with all that now devolves on them, became departments of the central administration; if the employees of all these enterprises were appointed and paid for by the government, and looked to government for every rise in life; not all the freedom of the press and popular constitution of the legislature would make this or any other country free otherwise than in name."

The Labour experiment
As it so happened, unusual circumstances brought about the most extended attempt at nationalisation in a democratic country in history, in the UK in 1945. It had just won the Second World War, albeit with the mighty assistance of the Soviet Union and of the USA.

The USSR was of course wedded to socialism and nationalisation in its most extreme form, full-scale state ownership of everything. The US was totally opposed to any such idea.

The UK precisely by being the least powerful and the most recessive of the Big Three, evidently about to disband a world empire, was also the most intriguing and attractive of them all for third parties. Was there to be a middle way?

There is no doubt that the overwhelming victory of the Labour Party in 1945 was an astonishing event, that gripped the world. Here was a victorious nation which elected a government to institute nationalisation.

Clement Atlee, the premier, to his great credit, appointed to the most important post of all a political adversary hitherto, Nye Bevan, a Welsh gadfly, He became minister of health and housing. He delivered, both a nationalised health service, the NHS, and 800,000 houses. His civil servants, who were by no means his ideological allies, esteemed him as the best minister they had ever worked for, on top of his brief, decisive and yet flexible. He won over the doctors to his nationalisation, a notoriously conservative profession. He got the private construction companies to cooperate in his national plan for housing.

He had his failings; his very gift of the gab (he was the best orator of his generation who would always fill the chamber in the House of Commons), could lead him to go over the top in his invective, comparing Churchill to Hitler, an unforgivable insult, saying that the Tories were lower than vermin, etc. But he was a great British character, who showed that you could have a romantic imagination and yet be an effective administrator of a national plan to boot.

He was the great success story of the Atlee government, who has left us a rich legacy in the NHS and well planned and capacious council houses (he insisted there should be two toilet amenities in each dewlling). He was widely mourned at his early death at 60 in 1960, the best Labour prime minister we never had.

The Atlee government also nationalised the means of transport, railways, roads and canals. It nationalised electric power, iron and steel. It even nationalised the Bank of England. Stalin was amazed and observed that you can introduce socialism into Great Britain, with a King of England as head of state, so long as you have democracy! Too dangerous a phenomenon, he concluded, for his own domains!

The UK government also gave national independence to India, Pakistan, Ceylon and Burma, starting a process of decolonisation, and consequent nationalisation, across the globe. A great and historic government.

It unfortunately held aloo f from the burgeoning European Community, an understandable act of hubris in a country that had just clinched victory in D-day on June 6, 1944 in the greatest war in history. Of course there has been a nemesis to pay thereafter - but that is another story.

The aftermath of nationalisation; privatisation
This revolution in world affairs in due course set off a collosal counter-revolution, the craze for privatisation that enveloped the globe, f rom 1979 onwards, with the advent of Margaret Thatcher and Ronald Reagan.

Like them or loathe them, they were a formidable pair of political operators. Thatcher had the brilliant idea of selling off the council houses that Nye Bevan h ad begun to build, to the very people occupying them. A property-owning democracy came into being that rewarded her with three successive electoral victories. This was turning the tables on Labour with a vengeance. Who were the true democrats now?

Privatisation – namely denationalisation - became the norm.

Every bit of public property was up for sale, the railways, the mail, the public utilities, the lot – excepting of course the monarchy and the armed forces – God saved the Queen from the depredations and depravity of the privatisers!

The new world disorder
The newly privatised economies of the Anglo-Saxon world (the idea had spread to Australasia as well) contained their own instability, however. They were prone to real estate and property booms that, under the impact of new extensive forms of credit, sub-prime mortgages, light-touch regulation and the like, got right out of control and ushered in the crisis of the world economy today.

Things have in a sense come full circle. Governments are bailing out their more feckless banks and financial institutions in a sort of backdoor nationalisation.

Sweden prefigured this whole development a decade ago. There an outright formal nationalisation took place, but in an unideological, pragmatic manner. The banks there were recapitalised and restructured by highy trained technocrats and managers, before being sold back to the private sector. This model perhaps provides the way out of the crisis elsewhere too – a wave of temporary nationalisation.

How temporary, time will tell.

Richard Blackburn.

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