For as long as capitalist ownership of the economy exists, whether or not the so-called ‘free market’ is dominated by monopolies, its operations will produce crisis, destruction, inequality and waste on an enormous scale.
Capitalism’s drive to maximise profit leads it to turn every area of human need – food, clothing, shelter, healthcare, education, sex, leisure – into a market for the production and sale of commodities for profit. However, when sufficient profit cannot be realised, even the products and services to meet society’s most vital needs will not be produced.
Capitalist competition invariably means unnecessary duplication, takeovers, ‘rationalisation’, closures, asset-stripping, commercial secrecy, excessive packaging and large-scale contrivances of style and fashion – all of which represent a waste, limitation or destruction of society’s productive resources. Whole economic sectors have developed – advertising, property management, business consultancy – that perform little or no useful function in society, except to promote the interests of monopoly capital and, ultimately, to transfer income to it from the working class and intermediate strata.
The reality of monopoly power is that it is used to block or take over more efficient but smaller competitors, especially those that seek to share the benefits of economic activity more equitably with workers or consumers. Anti-trust, anti-cartel and similar laws have utterly failed to halt the march of the capitalist monopolies towards national and international domination. Breaking up the monopolies, even if achievable, would merely set the clock back for the process to begin again.
Only public ownership of the economy’s major sectors and enterprises – the economic essence of socialism – can put an end to monopoly power and fundamentally change the basis on which economic decisions are taken. Pointless and wasteful competition and duplication would be eliminated. The development and deployment of society’s productive forces would be planned in order to meet people’s real needs and aspirations. Jobs, houses and vital or useful goods and services would be created as the primary purpose of planning and production, not as the incidental consequence of maximising profits for shareholders.
In particular, public ownership is the only viable basis on which energy and public transport can be planned and developed in an integrated way, to combat global warming and climate change while ensuring renewable power supplies.
But fundamental distinctions must be drawn between the different types of public ownership as operated in different stages and conditions.
Democratic or progressive public ownership would be conducted on a fundamentally different basis from capitalist public ownership – in the interests of the working class and the people, not of monopoly capital. A left government would seek to extend it to viable enterprises and sectors, with compensation paid primarily to pension funds and small investors and on the basis of proven need. Its pricing, contracting and investment policies would be consistent with the priorities, needs and interests of society as a whole. Its administration would be democratically accountable to the elected representatives of the people at every level, with workers and local communities fully involved in decision-making.
Socialist public ownership would be based on the same approach, but after the achievement of state power. It would be carried out in all major sectors of industry and commerce in the drive to end monopoly capitalist wealth and power and build a socialist society based on democratic and, where necessary, centralised economic planning.