2015-09-24

Should we renationalize the railways?

Should we renationalize the railways?

(or The Mighty Diamonds and why this leftie didn’t vote for Corbyn [1])

Since everyone else (well Rod Liddle at least [2]) is using music, drugs, and East Germany to illustrate their views about Corbyn, I thought I’d do the same.

I’m not actually going to answer the question I pose – for reasons that will become clear. I simply wish to use trains as vehicles for subjecting Jeremy Corbyn’s views to a bit of scrutiny – pon the lef-hand side[3].

Scroll back to 1982 and, whether you were passing the Dutchie or (more likely) the Kouchie you would probably have (assuming you considered yourself “upon the left-hand side”) agreed that privatization of British Rail – which began in that year with the selling off of British Rail’s publicly owned catering and hotel businesses – was a “bad thing”.

Public ownership or “socialism” (at least on some definitions of the term) was, pon the other hand, a “good thing”.

But our notions of “good” and “bad” here are problematic – even before we analyse them in any detail. We are already potentially conflating what is (or is not) morally superior with what is functionally superior (whatever our definitions of “superior” in these contexts). Economists on both the right (see eg Friedrich Hayek) and the left (see eg Karl Marx) are guilty (in very different ways) of the same conflation.

Approaching from the right or the left, I think we have to concede that the system of economic organization which is best at generating the most wealth may or may not be best at generating the most happiness for the most people[4]. Of course left and right wingers will care differently about human wellbeing and wealth, but even left-wingers may have to concede that there may, even in a mythical “perfect world”, be a trade-off between what is fairest and what is best overall – a subject which has been analysed in probably the greatest depth by John Rawls[5].

When we do analyse, in more detail, whether socialism is better or worse than capitalism the issues become even harder to disentangle.

Most distinctions between socialism and capitalism can be placed into one of two categories: the ownership category and the control category.

Under capitalism, the means of production, distribution, and exchange are, as we erstwhile socialists all learned, under private ownership. But were they then, and are they now, and what does this even mean?

Some businesses – like the joinery firm I use - are owned by sole traders – as some were in the German Democratic Republic (GDR) or “East Germany” as it was more often known (a “socialist” economy which I happen to know something about). Some businesses – like the shopping chain John Lewis – are workers’ cooperatives – a form of ownership also found in the GDR. Some – like the Coop shopping chain and your local building society - are consumer cooperatives (owned by their members) – see again the Konsum chain in the GDR. Some – like your local Spar – are cooperatives of private businesses – see farming in the GDR. Many UK businesses (very few today) were, back in 1982, still state owned. British Rail for example. This was the rule rather than the exception in the GDR. At one stage British Petroleum (BP) was a wholly state owned enterprise and later (for a while), even after it had gone “public” (ie private), most of its shares were still owned by the UK government. These days, nearly all larger industries in the UK are privately owned, which is to say that they are owned by their shareholders. But who are the biggest shareholders? In many cases these are pension funds that invest in industry and which are, essentially, owned collectively by everyone who has a private or company pension.

So ownership of the means of production, distribution, and exchange is a rather complicated subject – even though I have hardly scratched the surface.

What about control?

During the War (which resulted in the division of Germany and Europe into “socialist” and “capitalist” halves) both sides planned and controlled almost every aspect of production, distribution, and exchange – even though many industries and businesses continued to be privately owned. Even today in the UK, the High Speed Rail link – if it goes ahead – will be centrally planned and controlled by bureaucrats and elected politicians but executed by private firms.

“Central planning” has a bad name, but clearly has a crucial role to play when it comes to a national rail network (and many other areas). What did for the GDR (and similar economies) was not so much the presence of planning but the absence of market forces. Right-wingers ascribe all sorts of magical powers and foresight to capitalists, but I strongly suspect that the main advantage of capitalism is that it employs market forces to control the economic system in an essentially Darwinian fashion and makes competing firms that make the “wrong” decisions at any time extinct. Those “decisions” might as well be – and probably often are – made entirely randomly[6]. As Marx pointed out, capitalism constantly revolutionizes the means of production. Socialism didn’t and was left behind.

So control is complex too and, to a surprising extent, independent of ownership. You could, in theory at least, have state capitalism[7] or, at the opposite extreme, market socialism.

So what’s the best way to run a railway?

I have no idea; nor, I suspect, has Jeremy Corbyn.

I do, however, suspect that Jeremy Corbyn and I both want the same outcomes: a reliable, thriving, efficient rail network that is responsive to social, commercial, and environmental requirements and which treats its own staff well and pays them good wages. I further suspect that many on the right could not give a shit about most of the items in this list.

It is the outcomes we wish to see (I submit) that really (or really ought to) divide left and right in today’s world rather than how we best achieve those outcomes.

Perhaps renationalization of the railways is the best way to achieve those outcomes. Perhaps it isn’t. But that is an empirical question rather than a moral or philosophical question and even if a nationalized railway were better than a private one, I rather doubt that the same would apply to, say, car manufacture or grocery distribution.

Nothing I say above is particularly novel or insightful but Jeremy Corbyn shows no signs whatsoever of having ever considered the issues I raise or having matured his political outlook at all in the years since 1982.

I do not say all this because I have abandoned my left-wing principles over the years. I want the same things that Jeremy wants and that I always wanted: a fairer and more prosperous world. I still don’t want a world where a few people are allowed to shovel money into their own pockets in return for contributing little or nothing to the general good. What I have abandoned is many of the beliefs I once held about how best to get there.

Sometimes you have to “pass the knowledge from the right-hand side”. [8]



  1. I am not a member of the Labour Party but had a vote through my Trades Union.
  2. You won't believe this story about my friend, Jeremy Corbyn and the owl The real disgust wasn’t about the pig’s head. It was about the awful band Supertramp
  3. Pass the Kouchie
  4. A vaguely Millsian statement of moral superiority. Other brands of moral superiority are available.
  5. A Theory of Justice
  6. A train of thought I explore here.
  7. In a true rather than an SWP sense.
  8. Pass the Knowledge

1 comment:

  1. The railways aren't really privatised anyway. The basic network is owned and run buy a nationalised company (and it's £38bn debt is part of the public debt). The operation of the trains is just sub-contracted out for strictly limited periods.

    The only bit that is really in private hands is the rolling stock which is leased to the operating companies (with time-limited franchises, train operating companies are not going to invest capital which, in the long run, would be cheaper). I think Chiltern is a bit different as they have more responsibility for the track they run on.

    So what we have is an uncomfortable and expensive hybrid which, to be fair, is much safer and reliable than when run by BR. But then it costs vastly more, in part through Byzantine complexity, not helped by EU rules insisting that the operating companies can't own the track.

    We can also mix in with that some old-fashioned objections to efficiency and productivity.

    ReplyDelete

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