What Does It Mean To Have A Planned Economy?

There are frequent demands today, which we agree with, to nationalise various industries in order to either save them from potential bankruptcy or to reduce costs incurred through rampant profiteering. The rail industry, the energy companies, the water companies and all manner of privately owned industry have been, on many occasions, subject to call for nationalisation from the left and some in the trade union movement.

Making such demands in order to popularise the idea of removing the profit motive from some key industries is important in terms of raising consciousness, showing workers that there are alternatives etc. As British capitalism heads ever deeper into a crisis though it is important for us to start to analyse this demand further. Do we want to merely nationalise, for instance, the electricity companies? It would be a start and by removing the grotesque profiteering of the parasites who control them it would be an important step forward. But if we are talking about building a socialist system then more is required. We must recall that not too long ago, the 1970s in fact, around 20% of the industry in Britain was nationalised.

The period from the end of WW2 through to the early 1980s saw an extensive state sector built up in Britain, which was subsequently sold off. This nationalisation did not lead to socialism and in the end it was (with the exception of coal) fairly easily privatised, asset stripped and destroyed by the capitalist class when they desired to do so.  For all that the old nationalised model did have advantages for workers it is not a model we should desire a return to. 

The reforms of the 1945-51 period are important to analyse properly and the nationalisations of the time are no exception. Rail, steel, coal, energy and water were taken into public ownership at this time. It was considered by many workers in these industries at the time to be a step forward and indeed it did lead to greater union power in these sectors. There are myriad flaws in this model however, starting with a fact that should be obvious.

Even with these nationalisations Britain was still a capitalist country and the newly state owned industries would not be organised by workers but by bureaucrats and with senior management often brought in from private industry to run them. What was built up then was not a system controlled by the working class but one administered by the state on behalf of the ruling class. This meant that not only could the government privatise them with relative ease but that workers felt less and less of a sense of ownership and control over them precisely because they were not the ones running them. 

All the problems that you have in private industry in terms of alienation and unmotivated workers all replicate themselves in nationalised industries that are organised on similar lines to private industry. A nationalised industry still has a strict management hierarchy, it still has targets to meet and it still does not give the worker any real power over their daily working life.  

If we are to learn from the experience of the 20th century then there is a necessity not just for nationalisation but a planned economy that is operated by a workers state.  Putting it briefly, the state we have now is one built by and for the ruling capitalist class. It is one built to defend their ownership and control of British society as well as their imperialist looting of many other countries across the world. If we succeed in removing the capitalist class from power though, what will a workers state look like? Firstly it will be one where not only has the ownership of industry and land been taken away from the less than 1% of the population it currently belongs to.

Alongside this though we will see the very way that work is structured completely reorganised.  Rather than management in any industry dictating targets to an often demotivated workforce we will have democratic planning instituted where each workplace will participate in planning what they are to produce, how this feeds into the wider economy and how it fits into the area they are based in. It will go further than this because under a workers state the very design of how the work is done will be under democratic control.

Think of how much talent goes to waste now amongst the working class because they never get the chance to actually use or develop talents. If we have worker control of industry though every worker’s opinion can actually matter, they can all feed into the process of economic planning and design of their work and workplace.  Such participation will also see a vast increase in productivity in Britain because workers who know that they control everything from their community to their workplace and indeed the whole country will actually want to work far harder than anyone does under this failing system. 

Under capitalism today we have perpetual low pay, poor conditions and no control over anything that we do. We only need to look at the history of socialist states in the 20th century to see what can happen when, for the first time, the working class actually had some control over their lives. The explosion of productivity that made the five year plans in the USSR so successful came about because the working class knew that the economy was being built by them and for them. They knew that what they said and did in the factories, mines and fields truly mattered and that the country they would leave their children would be one that they would own. 

So as we agitate for the removal of the power of the parasitic capitalist class we must also raise the demand for a planned economy that is democratically controlled by our class.  Only this way can we harness the full potential all of us have and rebuild this nation in a way that will be built by our own industry and not by theft from the whole world as the current ruling class do. The potential of the British working class is gigantic and can only be realised under a socialist system which enables them to realise it. 

This will be the first in a series of articles covering how workers have exercised power in socialist countries.  The first country we will be exploring will Socialist Albania and that will be out next week.