Workers are opposing the privatisation of national assets and public services because it is against the general interests of society. It serves the narrow interests of monopoly capitalists, to fulfil their greed for maximum profits, at the expense of fulfilling social needs.
A major struggle is raging in our country against the privatisation of public assets and services. Workers are uniting in struggle against privatisation, rising above all differences in affiliation to political parties and trade union federations.
Spokesmen of the government and of big capitalist companies claim that public enterprises are inefficient and a drain on public funds. They claim that handing them over to privately owned companies will improve efficiency and benefit the whole population. They assert that it is not the business of the government to produce and supply any commodities, including goods and services that are essential for every-day life for crores of people in urban and rural areas.
The working class is challenging this fraudulent propaganda in favour of privatisation.
Workers of Indian Railways, Coal India, state electricity boards, petroleum and other heavy industries, public sector banks and insurance companies, ordnance factories, hospitals and other public services are all fighting to affirm the fact that their work is fulfilling an important need of society. They are convincingly arguing that these are not services which can be run with the motivation of maximising profits for private owners.
As the railway workers have observed, if rail travel is oriented towards maximising capitalist profits, it will lead to the neglect of the safety of passengers. It will also lead to a rise in passenger fares and neglect of remote areas. Working conditions of railway workers and job security will be adversely affected. Private monopoly companies will resort to retrenchment of regular workers and increasing use of contract workers. Indian Railways being the largest employer in the country, this will have a major negative impact on both the quantity and quality of employment.
Workers in state-owned banks and insurance companies are saying that the financial services they provide should be accessible and affordable to all. They should serve the needs of the masses of working people. They must not be converted into profit maximising businesses, oriented to serve the drive of monopoly capitalists for maximum profits.
Health care workers are pointing out that private hospitals and nursing homes which are out to maximise their profits put pressure on doctors to prescribe unnecessary tests. They keep patients in the hospital for longer than necessary, in order to make more money. They do not contribute to society the way public hospitals do when there is a crisis like the Corona Virus. While health care is a social need, the profit motive driving private hospitals and nursing homes makes it unaffordable for poor people.
Government spokesmen accuse the workers of being concerned only about their own jobs and not about the interests of the country. They are turning truth on its head. It is not the workers who are being narrow minded. It is the government which is acting in the narrow interests of billionaire capitalists. It is implementing a program aimed at subordinating all spheres of social production to the drive of monopoly capitalists to reap maximum profits.
The process of social production of goods and services ought to fulfil the needs of society and its extended reproduction. It must ensure secure livelihood and maximum possible prosperity for all. This is a widely accepted principle in this day and age. However, the uninterrupted fulfilment of social need is being prevented by the greed of capitalists for maximum profits.
More than 170 years ago, Karl Marx discovered that the reason why capitalist countries were periodically caught in economic crises lies in the contradiction between the social character of production and the private character of ownership of the means of production. In other words, the domination of capitalist greed over the socialised production process is the root cause of repeated crises of overproduction in every capitalist economy.
Every company which is driven by the private profit motive looks upon the wages paid to its employees as a “cost” which must be kept as low as possible. The combined effect of capitalist employers squeezing their “labour cost” is a decline in the purchasing power of the working class. Capitalism produces more and more commodities for sale in the market, while restricting growth in the purchasing power of those who are the potential buyers of the commodities they wish to sell. This inherent tendency of capitalism repeatedly leads to crises of over-production, when capitalists are unable to sell their commodities due to insufficient purchasing power and hence lack of adequate demand in the market.
Take the case of the Indian economy, which was in crisis even before the outbreak of the Corona Virus. Production was slowing down or declining in various branches in 2019. There has not been enough demand in the market for the goods and services which capitalist companies want to sell. The reason is that the workers and peasants, who make up the majority of the population, have suffered a loss of purchasing power. Their exploitation and loot by greedy monopoly capitalists has reached such a high level that it has turned into a barrier for further capitalist growth.
How the fundamental contradiction can be resolved was demonstrated in the Soviet Union, the world’s first socialist country. In the first two decades following the victory of the October Revolution of 1917, the Soviet government and people carried out the conversion of the means of production into common property of the people and into the collective property of peasant cooperatives. The dominant and directing role of capitalist greed was eliminated from the sphere of social production.
With the overriding motive being the fulfilment of social need, the Soviet people and government ensured that all available resources were invested in producing more of the nutritious food, clothing, housing, education, health care and other basic needs of the entire population, and producing more of the machinery, iron and steel, cement, energy and other means of production required for producing the increased amounts of the means of consumption. Social production was organised according to an overall plan, without leaving anything to chance.
While the capitalist economies of America, Britain, France and other European countries fell into a great depression starting in 1929, the socialist economy of the Soviet Union experienced uninterrupted growth. The Soviet Union developed without any crisis and without any unemployment in the period between the two world wars.
When all available resources are invested according to a plan aimed at fulfilling the needs of all members of society, such investments and expansion in production generates new employment on a very large scale. The reason why this is not happening in India and other capitalist countries is because of the private ownership and control of the means of large-scale production by profit-hungry monopoly capitalist companies. Monopoly capitalists invest their capital only when and where they are sure of reaping maximum profits.
For the past several years, Indian monopoly houses have been earning huge profits but investing very little of it to expand productive capacity within the country. They are using most of their profits to either invest abroad or in speculative activity within the country.
Capitalist greed is the root cause of unemployment and of the repeated crises which the economy falls into. By expanding the sphere of operation of capitalist greed, the agenda of privatisation and liberalisation is paving the way for more and more severe crises, and for unbearable levels of unemployment.
Reform Agenda of the Monopoly Capitalists
The agenda of globalisation, through privatisation and liberalisation, has been set by monopoly capitalists, Indian and foreign. It is aimed at changing the course of capitalist development in India, to suit the needs of these monopoly capitalists.
The course of capitalist development that was pursued after India’s political independence in 1947 was also set by the biggest capitalist business houses of that time. However, the policies, laws and regulations that were put in place were suited to the conditions of that time, which were very different from the present conditions.
In the mid-1940s, the revolutionary struggle for socialism was advancing on the world scale. In the leading capitalist countries of Europe, the ruling bourgeoisie was resorting to a deceptive method of rule called social-democracy. To prevent the working class from marching on the road of revolution and socialism, the bourgeoisie used public funds to expand social welfare programs. Their aim was to convince the working class that the benefits of socialism can be achieved within the framework of capitalism, without any revolution.
As the prospect of India’s political independence approached, the Tatas, Birlas and other capitalist business houses started planning the course of post-colonial development, along a path best suited to their interests at that time. They had visions of heading a mighty industrial and military power in Asia. However, they did not have machine building industry or adequate steel and electricity. Their own capital was not enough to finance the huge investments that were needed.
The big capitalists decided that public funds must be used to create a state sector of heavy industry and infrastructure. They decided to restrict imports of a wide range of manufactured consumer goods, so that they themselves can dominate those markets and reap maximum profits. This entire framework was elaborated in a vision document called the Bombay Plan, published in 1944-45, written by leading representatives of the big capitalists, headed by J. R. D. Tata and G. D. Birla.
The first three five-year plans covering the period 1951-65 were based on the Bombay Plan. In typical social-democratic style, the strategy of relying on the State to develop capitalist industry was presented by the Congress Party headed by Nehru as a project to create a “socialistic pattern of society”. Presenting the plan for capitalist development as a socialist project served to deceive the workers and peasants, who aspired for socialism.
The private companies of the big business houses benefited from the state sector providing them the infrastructure and assured supply of steel, coal, electricity and rail transport at subsidised prices. They gained from the restrictions on imports of means of consumption and transport. The market for cars, buses and trucks, for instance, was dominated by Tata Motors and Birla’s Hindustan Motors, with imported vehicles being banned or subject to very high import duties.
State intervention to facilitate capitalist growth was further developed during the 1960s and 1970s, including measures to promote capitalist farming and expansion of rural markets under the banner of the Green Revolution.
The 1980s was a decade when a massive drive to privatise public assets and services was launched in Britain, spearheaded by Prime Minister Thatcher. The American state headed by President Reagan started aggressively pushing for the lowering of national barriers and opening up of all the markets of the world to the free flow of capital and commodities. Gorbachev unleashed capitalist reforms in the Soviet Union. India came under increasing pressure from the World Bank and IMF to open up the domestic market for imports and foreign capital inflows.
The 1990s began with major abrupt changes taking place on the world scale, accompanying the disintegration of the Soviet Union. The tide of world revolution turned from flow to ebb. The bourgeoisie of all countries started claiming that socialism had failed and there is nothing better than a “market-oriented economy”, which means an economy that is oriented towards maximising private profits in the hands of those who own capital. They started asserting that what is best for the capitalists is best for the whole country.
Starting in 1991, the Indian ruling class, headed by the monopoly houses, began to openly abandon the pretence of building a socialistic pattern of society. They embraced the prescriptions of globalisation, through privatisation and liberalisation.
Having used the public sector to build up their private empires, the Indian monopoly houses decided that the time had come to grab hold of public assets at a discount, to further expand their private empires. Having built up their industrial base by restricting foreign competition, they decided that it was time to lift those restrictions in the interest of becoming globally competitive. They wanted the Government of India to open up the domestic market to imports and foreign capital investments, and foreign governments to open up their markets to Indian exports and capital investments.
In sum, the maximisation of private profit in the hands of the wealthiest monopoly houses has remained the overriding motivation of government policies, laws and regulations in post-colonial India.
In the early decades, the policy of creating and expanding state-owned heavy industry, state-owned banks and insurance companies, served to create the infrastructure for industrialisation, to expand the home market for capitalism and to guarantee maximum profits for the monopoly capitalists. In the present period, the pursuit of maximum monopoly profits is being served by the agenda of globalisation, through privatisation and liberalisation.
The agenda of globalisation, through privatisation and liberalisation, is aimed at taking advantage of the turn in the tide of revolution and socialism, to go on an unbridled offensive against the proletariat and all toiling people. It is aimed at intensifying the exploitation of workers, escalating the loot of small producers and of people at large, by monopoly companies and financial institutions. It is aimed at trampling on the rights that people have won through struggle in the 20th century.
The Real Alternative
The alternative to privatisation and liberalisation is the revolutionary program of reorienting the entire economy. It is a program to replace the motive of maximising private profits and fulfilling capitalist greed with the motive of maximising the fulfilment of social need.
The path of development followed in the early decades of Indian independence did not have the fulfilment of social need as its motive. Maximisation of private profits was the overriding motive. The public sector was built and strengthened only so long as it suited the interests of the monopoly houses. Public enterprises and services have been deliberately weakened and wrecked in recent decades. This has been done in order to justify handing over these state-owned enterprises and services to the monopoly houses, to facilitate rapid expansion of their private empires.
The goal of the working class is to end the dominant role of private greed over social production. The entire system of production of goods and services must be oriented towards the fulfilment of social needs. This is at the centre of the struggle of the proletariat against the bourgeoisie on the world scale. It is the struggle of socialism against capitalism, a struggle between two opposing social systems.
The immediate aim of our struggle is to halt the anti-social agenda of globalisation, through privatisation and liberalisation. However, the struggle does not end with that. We have to carry forward the struggle to make the fulfilment of social need the overriding motivation driving the system of social production. Capitalist greed has to be suppressed in the interest of ensuring the fulfilment of social needs.
Socialisation of ownership and control over the means of large-scale production is the real alternative to the privatisation program. The working class must carry forward the struggle to capture political power in alliance with the peasants and all other oppressed masses. The workers’ and peasants’ state must convert the means of large-scale production and exchange from being the private property of capitalists into the social property of the whole people. Only then can social production and distribution be organised according to a plan, aimed at maximum possible fulfilment of the rising material and cultural needs of the entire population. This is the strategic aim of the movement of the working class.