By Dick Nichols
[This is an edited version of an address to the ACT Politics in the Pub on the subject of "Privatisation in the ACT".]
I'll be tackling the issue of privatisation as someone who, as secretary of the combined unions committee at Eveleigh railway workshops, was involved in the 10-year struggle to stop the Wran and Unsworth Labor governments privatising the work of the NSW railway workshops.
That struggle was full of lessons about what is needed to defeat the privatisation drive now threatening Australian Capital Territory Electricity and Water (ACTEW), as well as the South Australian electricity and Victorian gas industries.
I will try to answer two questions. The first is: why has resistance to privatisation overwhelmingly been defeated? How is it that, despite the mountains of counter-reports proving that ownership is not key to efficiency, the millions of trade unions dollars spent on publicity campaigns, the thousands of expert presentations in parliamentary committees, the rising income inequality that follows privatisation, the gas explosions, blackouts and cryptosporidium, how is it that privatisation has rolled around the world like a juggernaut?
The second issue is: should privatised industries be renationalised? If so, how?
This immediately raises the problem of whether privatisation should be treated case by case.
Maybe there are "core" and "non-core" targets for privatisation, with government business enterprises fair game, but not public infrastructure. Maybe we've reached optimal levels of privatisation now that the ALP is in opposition and Howard, Kennett, Kate Carnell and John Olsen are behind the wheel.
After all, as the Amalgamated Manufacturing Workers Union national secretary Doug Cameron (he was then a senior AMWU NSW organiser) let slip to me in an unguarded moment: "Why should the railways pay more to have their repair work done by this dinosaur [gesturing at the ancient machinery with which we at Eveleigh were being asked to compete] when private firms can do the job at a third the cost?"
Why, to generalise Cameron's question, should the worker as consumer have to pay more just to maintain an industry in public ownership?
My answer remains what I told Cameron then: that state ownership represents a step forward for all working people simply because it poses the possibility of using the resources of society in a way different from that of private "profit maximisation".
This is true even in the case of the most bureaucratically cold and capitalist nationalisations, such as those undertaken to meet the demands of wartime or those where the purpose of public industry seems to be to give the loyal retainers of the Labor Party right a place to park their backsides.
The workers at Eveleigh didn't have a theoretical position on the debate, but they had firm opinions about their own situation.
They said it was hardly surprising that they couldn't compete with private firms on machines that had been state of the art in the 1920s. (When we finally lost the fight at Eveleigh, the National Trust placed preservation orders on a score of machines, including one planer that dated back to the 1850s!)
The workers were putting their finger on the chief determinant of productivity and cost competitiveness — investment in new, especially computerised, machinery.
Their second comment was that it was impossible to be competitive when the average production run was so short: time spent resetting machines was proportionately higher than in "outside" industry.
We later learned that it was railway policy to send profitable, long-run work "outside" so that unit costs in Eveleigh, even for work done on strictly comparable machinery, could never match that of competing private firms.
Their third comment was that they had no say in the overall management of production and no knowledge of the real economics of workshop operations. We soon discovered the reason, when — after threats of industrial action — the combined unions got hold of the numbers in two important areas, brake shoe and coiled spring production.
A new spring coiler which had been lying idle for two years, and which, we had been told, would produce springs at too high a cost, was in fact state of the art and would allow Eveleigh to produce the cheapest spring coils in the whole of Australia! Also, with some small investment, efficient brake shoe production could have been guaranteed.
Why hadn't these investments taken place? Because they would have tripped up the overall plan of privatising workshop work and simply given the lie to the alleged inefficiency of railway workshop workers.
These answers contain, in a nutshell, the conditions under which public enterprise can display its superiority to private enterprise — with equal technology, full information to (and control by) the workers and where each production unit can see how its effort fits into the overall, democratically elaborated, plan.
Of course, none of these conditions have prevailed in the state enterprises that have fallen victim to privatisation in the last 20 years. They have been either a subordinate part of capitalist industry and under the control of capitalist administrations, with only a very minor role at best for worker input, or they have been units within a bureaucratically run state socialism under which "They pretend to pay us and we pretend to work."
But all three of these conditions needn't be present to make state industry profitable. Even where not a skerrick of worker democracy or control exists, as in the French national car-maker Renault or any number of telcos, state-of-the-art technology combined with long production runs means that public can compete with private.
So why, given the rationality of the case for public ownership on economic and social grounds, has the battle generally been lost so badly? We can rule out two explanations straightaway.
In no case where public opinion was accurately consulted did a majority of "society" support particular privatisations, even in such apparently attractive deals as Thatcher's privatisation of British Telecom.
Secondly, in no case, not even where the workers were given free shares in the newly privatised firms, did a majority of the workers in state-owned enterprises support privatisation.
No, the fundamental flaw lies not with the overwhelming strength of the enemy, but with the weaknesses on our side. Let me discuss a number of them:
- Firstly, very rarely has the whole union movement seriously opposed privatisation. The success of the NSW right-dominated unions last year in defeating the proposed privatisation of NSW electricity is the exception that proves the rule. These unions, under extreme pressure from the delegates of the Electrical Division of the Communication, Electrical and Plumbing Union, told the Labour Council it wasn't on and the Labour Council told Bob and Michael Egan. End of story.
At Eveleigh Loco, we faced the particularly difficult position that the AMWU was split over the issue, the organiser for the railways supporting the fight while the more senior officials couldn't have cared less — all that work was going to go to AMWU shops anyway.
At the same time, while nothing was said openly, other railway workshops were told not to suffer too much for Eveleigh — they we're going to get the same Eveleigh work that had been promised to private firms!
- The second vice in fighting is to think that a "community campaign" and lots of parliamentary lobbying are sufficient to win the fight. The "community campaign" is a favourite in unions where leaders lack confidence in themselves or their members to engage in or seriously threaten the absolutely indispensable industrial action.
The most serious recent example of this was the failure of the Telstra unions and the ACTU to offer industrial resistance to the Telstra privatisation, all eggs going into the basket of mass distribution of propaganda combined with public meetings.
But at least the Communications Division of the CEPU put serious energy and money into its "community campaign", unlike the national Community and Public Sector Union of Wendy Caird, whose secret weapons against privatisation and closure of the Commonwealth Employment Service were parliamentary lobbying (circumvented by Howard through launching his CES replacement via government regulation), and the protest lamington stall.
Unsurprisingly, this failed to generate much fighting spirit in CPSU members in CES, whose demoralisation can now be blamed for the disaster.
- The third, and most disabling, vice is to attempt to fight the privatisers exclusively on their own ground.
Here there are a number of ploys which anti-privatisation forces are taking a very long time to absorb. For example, every proposal to privatise starts with the bogus trade-off that's aimed at splitting any potential opposition: privatise the Commonwealth Bank or lose Working Nation (Keating working a split in the ALP); privatise a third of Telstra or lose the environment fund (Howard working a split in the environment movement); privatise ACTEW or face unfunded superannuation liabilities (Carnell talking as if retiring ACT public servants could end up in the gutter).
More importantly, the broad left unions are split all over the place on the basic ideological issues around privatisation. Some, like the AMWU based in private industry, basically accept that private is more efficient, and that the real task is union "intervention" in the capitalists' investment decision or countering "globalisation"— anything but tackling the core issue of big business's ownership of the means of production and domination of the state.
It pays to recall a little history here. The public sector that has been dismantled over the past 15-20 years was essentially the creation in the advanced capitalist countries of the labour movement and its parties, the product of the struggles that began in the Great Depression and reached their peak after World War II.
The more intense those struggles, the higher the tide of nationalisations ran. In France and Italy, the factories of capitalist collaborators with the Nazis were nationalised.
(This wave of nationalisations was also a poor consolation prize from the western European Communist parties to the insurgent working-class movement, compensation for their failure to lead it in a revolutionary struggle against capitalism.)
Big business grumbled and demanded compensation, and conservative oppositions screamed. But when they came back into government, the conservatives rarely reversed the nationalisations that they had denounced, because the booming capitalism of the day easily absorbed, and even benefited from, their presence in the economy.
However, with the end of the long postwar boom in 1974-5, the pressure was on capital to find new fields of profitable operations, hitherto the domain of the state. The increase in the size of the average big firm also meant that the sums needed to buy out state industries could now be more readily marshalled.
The search by capital for new fields in which to rescue its sagging rate of profit intersected with what has been called "the fiscal crisis of the state" — that growing deficit in nearly all capitalist state budgets due to the impossibility (1) of cutting state expenditure past a certain point (especially in the welfare area), (2) of running an expansionary policy that would reduce unemployment and (3) of maintaining company tax rates on increasingly mobile capital.
The left unions based in the public sector certainly oppose further privatisation and public sector cuts. But, because they don't grasp the underlying dynamic driving privatisation, they tend to fight it on grounds tolerable to capital and expressed in the concepts of orthodox economics: public ownership is justified because it corresponds to "natural monopoly" or can more readily counter "market failure".
This approach is "respectable", but it puts opponents of privatisation permanently on the back foot. Having accepted the legitimacy and superiority of private production for profit in the majority of the economy, they have always to justify why it shouldn't apply in their bailiwick.
Thus, while the mainstream (read: ALP) case for keeping Telstra in public hands focuses nearly exclusively on the need to guarantee subsidised services in remote areas, competition policy, the partner of privatisation, goes uncontested.
No-one, with the partial exception of the Greens, questions the right of government to deregulate, flood the market with multiple providers who will force prices down in the short run and a goodly percentage of whom will go broke — making way inevitably for private oligopoly in place of public monopoly.
Nobody explains that a publicly monopoly, provided it is run by a board representing the workers and the public at large, can achieve as good a result for the consumer — given access to the latest technology.
No-one refers to the historical evidence which confirms that the combination of public ownership and workers' democracy can achieve miracles, as in the case of Cuba's development of world best practice biotechnology and biologically benign systems of pest control, and as was even achieved in Stalin's Russia when winning the war against the Nazis required a relaxation of the monstrous Stalinist factory regime and a call on the initiative and commitment of ordinary workers.
In short, no-one of any profile puts the case for public ownership in its right perspective, the socialist perspective. Yet, the more that perspective sets the tone of the fight against privatisation schemes, the less defensive we have to be and the more we prepare a revived commitment among masses of working people to the essential principles of public ownership combined with democratic workers' control.
It's high time left unions started counterattacking around public ownership. What would be wrong, for example, with going on a propaganda offensive against the big four banks, their closures on country branches and their slaughter of bank workers' jobs? Why don't the unions call for the nationalisation of the banks? Why leave organised expression of anti-bank sentiment to Hansonism?
And whatever happened to nationalising BHP? Are the unions so intimidated by big capital's need to make a decent return on investment, so in thrall to the Labor Party which is so terribly sensitive to that need, that they can't say boo to a goose?
However, despite all these weaknesses, there are signs that the tide is beginning to turn. And the victory of the NSW CEPU against Egan and Carr proved the most important thing of all — that privatisation is not some overwhelming political el niño effect, but an organised political project demanding counter-organisation.
If the NSW right can stop privatisation, there's something very wrong if we can't stop it in Canberra, with a broad coalition in support of ACTEW already established and 80% opposition in the polls.
More importantly, a successful campaign here, when combined with similar possibilities in Victoria and South Australia, would be about more than privatisation.
It would mark a very important new phase in Australian politics — one in which the working people, after years of retreat under the Accord and Howard, began again to emerge as confident political actors in their own interests.
[Dick Nichols is industrial work coordinator for the Democratic Socialist Party.]