Nationalisation: a flawed idea, or an economic saving grace?

Nationalisation is often seen as a buzzword. It usually has a weird effect on people that causes them to start rabidly screaming the words “Marxist” at you every time it’s mentioned. With the Labour Manifesto in the public domain, this phenomenon is becoming more and more common. However, if you’re going to make such a comparison, at least give the Communist Manifesto a read first. The Labour party has pledged to re-nationalise industries such as the Royal Mail, British Energy, as well as Broadband services. Whether the policies put forward by Jeremy Corbyn are plausible or not isn’t the point of discussion, I’m more interested in establishing how or if nationalism fits into the modern-day.

Firstly, it must be established that nationalisation is not actually that radical. Corbyn’s manifesto has been called “Radical” by the BBC and even members of the Labour Party, but the actual policy of nationalisation isn’t as extreme at all. America has utilised nationalisation in various industries, and their Government the exact opposite of socialist. Nearly nine out of ten people in the United States receive their water service from a publicly owned utility and in the last 20 years. Since then, nationalisation of the water industry has only expanded. From 2007 to 2014, the portion of people with water from publicly owned water suppliers increased from 83% to 87%. France’s mass nationalisation of its energy industry in the 1980s, Germany’s re-nationalisation of the Print Office in 2008 after it was privatised in 2001, and Iceland’s re-nationalisation of its largest commercial banks in 2008, shows that it isn’t some outlandish or outdated idea. 

This isn’t necessarily a socialist idea, it’s simply economically liberal. What is then done with nationalised industries is what takes it a step further. Even the services stated above are only a partially nationalised industry, as the state does not have a 100% market share and neither does it legally obstruct private companies from entering the industry. The common question asked is, why on earth would the government want to do this? Simple, it’s because we can’t trust the market completely to operate fairly, and when it crashes, the market won’t protect the public.

In some industries – take water for example – it just makes more sense to have fewer entities providing the service because of the infrastructure involved. The economically savvy readers will recognise this as a natural monopoly. It’s even been used to pull banks and other private entities out of trouble. This is done by temporarily buying them to ensure they don’t collapse and cause damage to the economy as a whole. A good example was when the US government took over GM Motors. When the problem is resolved, the government simply sells the company afterwards. In the case of nationalising industry, it allows the consumer to get a cheaper or even free service whilst the government tanks the cost but runs the companies, they are purchased at a profit which can then go back into your pocket.

Some of you will be reading this and think “Why don’t we just do this for everything? Cheap Nationalised Broadband? Sounds great”. Don’t jump the gun. It’s not something to be taken lightly and isn’t always a good idea. When nationalising an industry, the assumption is the government will actually be good at running the businesses in that industry. You can very easily argue that the British Government, in combination with local government, just isn’t good at it.

To paint a picture, I’m going to use the Labour party promise to provide a state-run fibre broadband service across the country. I am a huge PC gamer nerd. I play mostly League of Legends and Counter-Strike, but anyone who plays video games regularly can unite and agree upon a common enemy, bad ping. Lag spikes are actually the worst, and usually, we all have little tricks we use to try and deal with them, but if they don’t work, we are comforted by the fact that we can just switch broadband providers or upgrade our service. If Broadband is nationalised, you might not be able to do that, leaving you with bad ping and poor gaming experience. 

The state wants to purchase broadband relevant parts of BT, but the BT group also owns Plusnet and EE which have their own broadband services. If only the state broadband service is available in the area you live in, and that service just isn’t good enough, you would have to move to get to a different service provider, because currently there are only 5 providers for commercial usage, and 3 of them (BT, Plusnet and EE) could end up under the state service. To make it even worse, Openreach (a BT Subsidiary) maintains the fibre networks that the other broadband services sell, so if a state broadband service was to exist, the government would either need control of that as well or sub-contract it to Openreach. Even with all those complications, it doesn’t even touch on the fact that everyone who currently works for those companies now becomes state employees, and that’s a whole different fiasco.

Although nationalisation isn’t a ‘pipe dream’ like some would call it. The belief that magically buying all these industries will solve itself is certainly naïve. As I have displayed by briefly exploring the result of the nationalisation of just one service, this is not a straightforward process by any means. Paul Johnson, director of the Institute for Fiscal Studies, said the nationalisation plans of the Labour Party as a whole is risky and would require a restructuring of the economy specifically in the area of taxation. This would be a slow and gradual process that would take around 10 years. This doesn’t just apply to the Labour Party’s plan, it applies the nationalisation as an idea. 10 years is two governments, maybe three, governments. Who says our economic situation doesn’t change? Who says halfway through the project it’s no longer economically viable and the whole thing gets put on hold?

Nationalisation isn’t the Marxist evil that many claim it to be, but it isn’t necessarily the undeniable saving grace of the British population that it is being peddled as either.

A land value tax won’t save the amazon rainforest: Instead we should look to indigenous communities to lead the way

Recently, an article published on this site by one of my colleagues attempted to revive the concept of a land value tax (or Georgism) as the answer to environmental degradation, specifically the tragic and rapid destruction of the amazon rainforest.

This tax is supposedly an excellent counter to the “demonstrations and other forms of virtue signalling from the left”. Although I agree that demonstrations in the UK will do very little, I wholeheartedly disagree that free market reform policies, like a land value tax, will be either implementable or have any effect in combating what is essentially a market driven process. It’s neither pragmatic nor possible. Instead there is a far more practical and proven method to protect the rain-forest already at play and it lies in the inherent power of indigenous communities.

To address the proposal of a land value tax, which i will preface, is not an idea without merit in specific contexts, such as urban and suburban plots of land but in this context it has significant barriers to its implementation.

Firstly, the concepts of a land value tax and the eco-tax mentioned in the article are two fundamentally different financial tools and in order to implement them in concert you have to radically alter the idea of a land value tax from a 100% (or near 100% tax) to one that is adjustable depending on the land that is being taxed. The reason for this is that the tax relies on the market determining the “highest and best use which can be obtained” for the land itself, which contradicts the need to value land in the rainforest as inherently useful in it’s current “undeveloped” state, to prevent further deforestation. Deforestation which is done to clear land to meet market demand from developed, so called ‘western nations’, for meat, soy and other practices like mining. The system of a land value tax ultimately pushes for the development of open land and has the potential for the premature release of farmland for development.

Secondly, there have only been a few instances of land value taxes being implemented with varying degrees of success and often not in the true (Georgian) sense of the idea. Furthermore, these reforms in ‘developing’ nations have led to an “exacerbation of the concentration of wealth”. In addition to this, the method of using international sanctions to enforce this tax has the potential to harm those very communities who’s land has been taken in the first place.

It’s within these communities that a practical and implementable way in which to improve the situation in the amazon can be found. It revolves around recognising the inherent power held by the many diverse indigenous communities of the amazon rain-forest. These individuals have been resisting colonial and then imperialist forces for many generations. Instead of using a theoretical concept of a global common ownership of land which can then be used to levy taxes, instead the international community should directly demand and support indigenous claims to the right over the land they live on.

By listening to the leaders from the amazon itself, those individuals and communities who are and have always been at the front line of a battle with state-backed corporate land grabs, we can formulate the best way, as an international bloc, to support, bolster, and work with them in saving the rainforest.

Many lands that are mandated by the government for indigenous use are still legally owned by the government itself. This is where many of the illegal activities associated with agribusiness are occurring. Bolsonaro, the Brazilian President, has been targeting these very indigenous groups, freezing the demarcation of new indigenous land and stripping the national indigenous foundation, known as Funai, of its powers. This is exactly what must be stopped and soon. It’s widely held that supporting indigenous land rights is a key process in preventing deforestation and destruction. It has been show that in some cases it can reduce forest fire incidents by 16% compared to areas that are simply ‘protected’ without land rights. This makes sense because these communities have been successfully and actively managing the rain-forest for countless generations. Initial reports from the world bank state that: “it will cost far less to save carbon by recognising forest community rights rather than relying on the future money markets”. Furthermore, one report outlined that it would cost £2 per hectare to recognise indigenous land rights.

Compared to a cut and paste tax requiring hoards of land valuers, this is a method that is both steeped in history and has already been implemented and measured. It’s ethical, anti-imperialist, and efficient. The World Resource Institute showed in their research that: “securing community forest tenure is a low-cost, high-benefit investment that benefits communities, countries, and global society”. However, this will not be the only way we can quickly and decisively stop the destruction of the rain forest. Perhaps an Eco-tax in some form and other international methods of pressure will be key in this collective endeavour, but this should always be fronted and led by those communities who live and resist within the amazon rain-forest itself.

For virtue signalling flag wavers, here are some ways you can help below:

Support the rainforest action network working directly with indigenous communities

Follow and support resistance on the ground and indigenous groups

Choose alternatives and pressure your own government