Monday, 18 February 2008

Northern Rock Nationalisation: Statism, not Socialism.

So the government has made its move: Northern Rock is to be nationalised.

What are we to make of it? The (most recent) Tory line is that Labour dithered and dithered, costing taxpayers millions whilst making up their minds. But what seems to have happened is that the Labour Party were unwilling to nationalise Northern Rock if a buyer could be found on reasonable terms, but the jokers at Virgin wanted a ridiculously good deal, including protection from risk in case of the firm collapsing again.

In the government's favour, we are not simply socialising the risk and privatising the profit: instead both will now be placed in a half-way position. Commercialisation at arms-length is basically the same deal as devolution in Scotland: the firm does the business and we pick up some of the cheques at the end of the day. It's not socialism, which would demand that working people both within and without the company would have control over it. It's simple statism, and in the circumstances probably a good solution to a difficult problem.


John Angliss said...
Dave has written along a similar vein here.

Jackson Jeffrey Jackson said...

And one of the key differences between statism and socialism is that the staff of NR are likely to suffer in order to make it profitable again.

A Labour Government that truly believed in nationalisation could have used this opportunity to do something radical: to merge it with National Savings as an institution run by, for example, a board elected one third by staff, one third by customers and one third by government (as the RMT suggests for the railways).

As it is we will get an attempt to "turn the business round" and make it attractive again for the same pigs who ran it down in the first place to take over again.

Still, better than the alternative I suppose.

Red Flagger said...

One of the most interesting things to come out of this nationalisation is how far the EU's competition laws affect us- could be a good pointer for a future socialist government.

Howard Wilson said...

If only this could be the catalyst that restarts Labour Socialist ideals, re-nationalisation of the railways and utilities, but it's the end of a stumbling and dithering caused by the indecision of Brown and the apathy of Darling.
When Lloyds/TSB were giving serious consideration to Northern Rock last September, guarantees could have been offered, but Brown was fumbling his way around the possibility of General Election like a drunken relation doing the hokey cokey and this is where we've ended up!