Although written in 2000, this chapter from the book Imagine on what a socialist Scotland would look like remains valid today.
Graphic above is a crop of a print the late Kenny Skeel produced for the SSP’s Calton Hill event in 2004.
A fully-fledged socialist society could never be achieved within the borders of a small country such as Scotland. The eradication of all social and economic inequality could only be achieved on an all-European, or perhaps even a world scale. Nonetheless, a Scottish socialist government could at least begin to move in the direction of socialism by taking control over key sectors of the economy, by introducing workplace and community democracy, and by implementing radical and popular reforms which would set an example for other countries to follow.
A new socialist economy would be based on a range of different types of enterprises with the emphasis on social ownership. Large-scale industry, oil, gas, electricity, the national railway network could be owned by the people of Scotland as a whole and run by democratically elected boards in which workers, consumers, and the wider socialist government were all represented. These would not be based on the old-style nationalisation projects. Instead of centralised planning by a remote bureaucracy, there could be decentralised democratic planning using the most
advanced information technology. Where practically possible, socially owned enterprises could be broken down into smaller sub-units to enable closer scrutiny by the wider public.
Social ownership could also involve community-owned and municipally-owned companies. Municipally-owned building companies could be established to build new homes, schools, community centres, sports centres and other local facilities. Local bus and underground systems too could be taken over and run by the larger councils, or jointly by neighbouring smaller councils.
Another form of social ownership that could be encouraged through the provision of cheap loans and other incentives would be workers’ co-operatives. Repeated studies have shown that when employees own and run their own companies, they work harder and more efficiently. Following one of the most in-depth studies ever carried out, based on research in the UK, Greece, Italy, Spain, Cyprus, and Malta, one expert, Dr Godfrey Baldacchino of the University of Malta concluded, ‘Worker-owners typically work better, they work harder, they offer competitive services, they distribute their gains more equitably, they enjoy high levels of participation in decision-making and they enjoy high levels of job satisfaction.’
In a socialist Scotland, some sections of the economy would most likely remain in private hands. It would be absurd for any socialist government to try to take over small shops, ice cream vans, Indian takeaways, taxi-cab firms, car mechanics yards and the multitude of other small-scale enterprises which play a central role in producing goods and delivering services.
In total, there are just under 300,000 businesses in Scotland. Only 1.2 per cent of these employ over 50 people, while at the other end of the spectrum, 93.7 per cent of businesses employ less than ten people. In a socialist Scotland, these hundreds of thousands of small businesses would thrive because they would be competing with each other on a level playing field, rather than competing with big business on similar terms that the Christians competed with the lions in ancient Rome.
Some larger companies, too, may even remain in private hands on the grounds of expediency. For example, there are now almost 40,000 workers employed in Scottish call centres, most of which have been set up by outside companies based in England or abroad. Attempting to take a call centre into public ownership is likely to be a futile gesture: it would literally stop functioning overnight, leaving banks of silent telephones. Similarly, some branch assembly plants, particularly in the electronics sector, are individual links in an international production chain.
In these instances, a socialist government could enforce certain basic standards of wages and conditions, including a minimum wage of at least a £7 an hour (at today’s values); trade-union rights; a shorter working week; and workers’ control over health, safety, and other workplace conditions.
Companies which refused to meet these conditions would forfeit their assets. They could also be forced by law to provide minimum redundancy payments, perhaps the equivalent of two to three years’ wages, to allow a reasonable time for the sacked workers to be retrained and redeployed.
Today in Scotland, each worker employed by a foreign-owned company produces on average an astonishing £184,000 of wealth. By contrast, capital investment in these companies adds up to just £7600 per employee. Even with vastly increased wages, improved conditions, shorter hours, and higher rates of corporation tax, most companies would probably still find it profitable to remain .
But, within a socialist Scotland, the private sector would be subordinate to the social sector. Profit would no longer be the raison d’etre of all economic activity. Instead of being siphoned off to shareholders, the surpluses produced by workers would be used to increase wages, reduce hours, improve working
conditions, develop public services, and boost investment. Social and environmental considerations would take precedence, as would longer-term planning and training.
If the minutes of the board meetings of, for example, Scotland’s giant construction companies were publicly available – which they’re not – they would no doubt be preoccupied with questions such as: `How can we cut costs? Where can we make redundancies? Where will we advertise? Where can we get cheaper materials? Is there any land up for sale that is likely to increase in value? How much can we increase the cost of a new three-bedroom house without losing market share? Can we work out a strategy for driving some of our rivals out of business?’
Within a socialist economy, the elected board of a socially owned construction firm could have a different agenda. It could discuss such questions as: `What are the latest homelessness figures and how are we tackling the problem? What are the results of the tenants’ consultation over the design options for the new council estate in the East End of Glasgow? Are the materials we are using on this project sufficiently durable? Will the houses be properly insulated to save energy? Will they be barrier-free to make them suitable for disabled residents? Can we reduce the price of a new three-bedroom home? Are safety standards on our sites being adhered to? Are we in a position yet to move from a four-day week to a three-and-ahalf-day week?’
There could be total transparency in the workings of all branches of the economy, with minutes of every board meeting of all large enterprises published online. There would be mechanisms to ensure that board members could be removed from their positions at any time by those who elected them. Although there would be the need for managerial and technical specialists, whose salaries would be subject to negotiation, board members themselves would receive no more than the average wage of a skilled worker in that industry.
To survive and thrive, any economy must constantly innovate. Yet the total amount spent on research and development in Scotland in 1999 was just £330 million, less than two per cent of the £18 billion profit bonanza made in Scotland in the same year by just 20 companies. Scotland has the skills and technology to develop its own socially owned electronics, information technology, and chemical industries which would not be at the mercy of boards of directors in distant cities.
There are hundreds of thousands of websites devoted to radical environmentalism, anti-capitalism, and socialism. A socialist Scotland could utilise communications technology, not only to generate international political solidarity, but also to open up trade with this potentially massive radical cybermarket.
Such far-reaching change could not be carried through without full political and economic independence. The devolved semiparliament at Holyrood, with its lack of economic muscle, could not even begin to scratch the surface of inequality in Scotland. Nor could the SNP’s alternative to devolution – Independence in Europe within a single European currency – offer genuine independence. Control over economic policy would simply shift from Westminster and the Bank of England to Brussels and the European Central Bank. And, like their London-based counterparts, the bankers, bureaucrats, and big-business-oriented politicians who run the European Union will fiercely resist any serious attempt to build a more egalitarian society in Scotland, or in any other European country.
A socialist government in Scotland would require to create its own central bank. It would bring the other major banks and financial institutions into the public sector and establish a network of community banks, building societies, and insurance companies. Based on the same principles on which credit unions operate in many local communities, a new socialist financial system could provide low-interest credit, attractive savings terms, and cheap insurance. It would especially benefit farmers, small businesses, and workers’ co-operatives.
For most mainstream politicians, the idea of banks being owned by the people rather than by private shareholders is unthinkable. Banks, after all, are the private property of rich individuals to run as they see fit. You can’t just deprive these people of their livelihood as though they were shipyard workers, or miners, or machine operators.
In a socialist Scotland, this culture of deference to the rich and powerful will be dissolved. just as capitalism set out to abolish `the divine right of kings’, socialism will set out to abolish the divine right of bankers, shareholders, and stockbrokers. The needs of society as a whole will eventually be elevated above convention, tradition, and sentiment.
Certainly, shareholders would be compensated. A democratically elected compensation board could be established, which was representative of society as a whole. It would try to arrive at a fair settlement with shareholders to ensure that they were not driven into debt, bankruptcy, and poverty. But there would be no question of doling out millions of pounds in compensation to wealthy individuals, as previous Labour government did when they nationalised industries such as coal, rail, and steel.
Publicly owned banks exist even in the most right-wing free-market societies. In the United States, the Federal Reserve is state-owned. The European Central Bank, too, is owned not by private shareholders but by the member states of the European Union. The Bank of France and the Bank of England are publicly owned. Even Russia under Boris Yeltsin, after privatising three quarters of all public enterprises was forced to nationalise some of the country’s biggest banks when the Moscow stock exchange went into free fall in the late 1990s.
There are thousands of examples of local, regional, and national banks and financial institutions that are socially owned in one form or another. Most building societies and many insurance companiesincluding one of Scotland’s biggest financial institutions, Standard Life – were built, not as profit-making businesses but as mutuals, owned by their customers. In a significant rejection of the smash-and-grab culture of free-market capitalism, Standard Life’s two million policy-holders recently voted to retain the company’s mutual status, rejecting bribes worth an average of £6000 per person to float it on the stock exchange.
Neither Standard Life nor any of these other institutions are run democratically. None are run remotely in the interests of the wider community. All of them are subservient to the demands of private capital. Nonetheless, the fact that publicly owned banks and mutual insurance companies exist and thrive even in the heartlands of free-market capitalism is an answer to those who argue that public ownership of finance is impractical.
Some politicians, even on the Left of the political spectrum, express fear that radical measures directed against the banks and other capitalist institutions would provoke a `flight of capital’. Naturally, a socialist government would try to counter that with immediate legislation restricting the amount of money that could be shifted out of the country. Before Thatcher rewrote the rules in the early 1980s, even the British government, along every other government in the world, had strict controls on the movement of capital in and out of the country.
In today’s hi-tech economy, it is much easier to shift capital around. But a financial system is more than just money. It consists of physical resources: staff, buildings, computers, cash machines. It is built upon expertise. Whether any financial system can function effectively or not depends first and foremost on the skills, the training, the know-how, the experience of the workforce at every level.
Money can be shuffled around from one country to another. But an entire financial system employing 100,000 skilled and trained workers cannot just be dismantled and moved abroad.
In any case, most of the operations of the financial sharks who shift money around are purely parasitical. They are like touts buying up tickets for a big cup final so that they can later sell them at five times their original value. They create nothing and add nothing to the general welfare of society. As things stand today, only a small fraction of the £300 billion controlled by Edinburgh’s financial institutions is actually invested in the Scottish economy.
One argument against socialism that has been checkmated by the development of information technology is the claim that democratic planning is impossible in a complex society. `Let the market decide!’ is the cry of the profiteers. They rightly denounce the centralised bureaucratic planning of the economy that contributed to the downfall of the Soviet Union.
But the creation of a democratically co-ordinated, harmonious, integrated economy is more viable today than ever before. Information technology can track sales, prices, distribution, and a mass of other relevant data. It can make instantaneous adjustments where necessary. Even now, the big supermarkets operate a system whereby every sale is recorded in a centralised database, which in turn is linked to a series of warehouses. Computerised order books then instantaneously calculate which stocks need to be replenished.
In other words, production is planned. But, under capitalism, such commercial planning is limited and fragmented. It is also highly secretive. Information is jealously hoarded by each individual company and exploited for commercial gain. If an item is selling well, the price will be jacked up to the highest level the market will tolerate. The prices of other goods will be temporarily slashed as a means of undercutting competitors and eventually driving them out of business.
Under capitalism, the flow of information that has been made possible by computer technology is abused for private profit. Under a socialist economy, these information systems would be expanded and integrated across the economy, and they would be geared to the broad needs of society as a whole, rather than to the narrow demands of company shareholders.
It would be foolhardy at this stage to even attempt to set out an exact blueprint of how a socially owned economy in Scotland would function in fine detail. There would be continual improvisation and fine-tuning on the basis of experience.
Moreover, the establishment of an independent socialist Scotland would only be a transitional step towards a wider international socialist confederation. It is an open question whether the battle for socialism across Europe will be pioneered in Scotland or whether the people in Scotland will follow a trail first blazed elsewhere.
There is no arguing with the fact that capitalism ended the 20th century triumphant. But, as the 21s’ century progresses and the mists of confusion begin to be dispelled, the idea of socialism will emerge more clearly and powerfully than ever before. Socialism’s time may not yet have come, but `it’s comin’ yet for a’ that’.