Socialism and the Campaign Against Asset Sales

Why do socialists oppose asset sales?  The answer seems obvious: socialists want state ownership because it provides popular control of the economy.  People on both the right and the left generally agree socialists stand for ‘big government’ and ‘state intervention’.  But being a revolutionary means questioning accepted wisdom and although reformists in Labour and the Greens might be happy with the equation “state ownership = socialism”, we have a different approach.

Firstly, in a society dominated by capitalism, state ownership of a corporation does not always mean the corporation is run in the interests of working class people.  The state is not aloof from society like the spirit of God hovering above the ocean, the state is run by and for the ruling class.  All the arms of the state – parliament, the judiciary, the police force, the education system and the state-owned corporations – are run by and for the capitalist class.  This doesn’t mean every part of the state has to turn a profit (although ‘State-Owned Enterprises’ like Solid Energy do), but all parts of the state have to ensure the businesses are profitable. Working people have some, limited say in how the state and its branches are run – for example, teachers unions have some control over teaching but the main aim of the education system is still to produce a trained workforce. So state ownership does not equal popular control.

In countries like New Zealand, where the state grew out of a brutal process of colonization and the dispossession of the tangata whenua , this should be doubly clear.  Nationalisation of the land and natural resources that were previously the property of Māori has been part and parcel of the systematic robbery and destruction of Māori society.  Take the latest land-grab in the foreshore and seabed as an example: in spite of all the racist rhetoric whipped up by the (Labour) government, Crown ownership of the foreshore and seabed paved the way for the sale of rights for minerals extraction to private operators – hardly a situation that benefits Pākehā workers, let alone Māori.

So why do revolutionary socialists oppose privatization, if nationalization does not lead directly to socialism, and is sometimes even a tool of oppression? While nationalization should not be confused with popular control or socialism, it does offer an alternative the unfettered action of private capitalism and the “free market”.

No government can rule by force alone, and so the capitalist class is obliged to allow some concessions to cement their rule.  People have come to expect a more comprehensive and less costly delivery of goods and services from state-owned corporations which are at least supposed to act in the interests of the people, not the board of directors or private shareholders.  The existence of an alternative model can give people hope and encourage them to dream of bigger and better things.  That’s why we see thousands of people out on the streets time and time again marching to keep state-owned companies away from greedy investors.

So what of the campaign against asset sales so far? Since the National Party announced their plans to sell shares in the three state-owned power companies and Air New Zealand during their 2011 re-election campaign, opposition to asset sales has been directed down two main channels: opposition in the courts led primarily by the Māori Council and backed by the Mana Movement, and the electorally-focused opposition of the main opposition parties, especially Labour and the Greens.  While neither campaign has been a complete success (obviously, with the first share issue in Mighty River Power proceeding apace), there have been a few positives.

The Māori Council campaign was the first to achieve any notable success by delaying the first share issue in Mighty River Power.  The Māori Council is a body established by the Māori Community Development Act of 1962, under a National government.  It has a reputation for being conservative – its long-time chief is Sir Graham Latimer, a National Party member, farmer and businessman. But pressure from below has meant the Maori Council has in the past represented working class Maori. It has been involved in negotiations with the Crown where iwi do not want to be represented separately or where some iwi or hapu feel that they are not being offered a fair deal in other forums.  There have been long-standing disputes over the rights to the water the Crown (the state) uses and administers as if it were the owner.  So when the government moved to sell shares in power companies that generated much of their electricity from hydro-electric dams, several North Island Māori groups, led by the Māori Council and backed by the Mana Movement, believed the time had come to act.

The campaign began in earnest last year, with a Mana-organized hikoi against asset sales in April 2012 and a claim that the sale of shares in state power companies could prejudice later claims on water rights put before the Waitangi Tribunal.  More marches were organized against asset sales in support of the claim, and the Waitangi Tribunal ruled in favor of the Māori Council, recommending a halt to asset sale proceedings, which the National government delayed until early 2013. Score 1 to the Māori Council!  The National Party and representatives of the Government refused to attend a nation-wide hui on the issue called for September, and instead sought to engage in its own “consultation” process region by region.  The hui, held at Turangawaewae, the marae of the Maori King, Tuheitia Paki, called for a boycott of National’s sham consultation.  The boycott was only partially successful and the legal campaign stumbled when the High Court and then the Supreme Court ruled against the claim, paving the way for the first sale to proceed.

The electorally focused campaign of the opposition parties began more slowly.  The Greens called the National Party plans “privatization by stealth” during the 2011 election campaign, but National won the election and became the government, despite 70% of voters opposing their privatization policies, and despite the momentous gains of the Green Party.  Labour and the Greens embarked on a petition campaign to secure a referendum at the next election.  Although the campaign for a referendum on asset sales was successful, it will likely be too little too late and Key has already announced his plan: simply ignore the result.  Protests were held too: the biggest by civic organizations like Grey Power that are broadly against neo-liberalism.  With no alternative direction, both Labour and the Greens joined the xenophobic nationalism of the New Zealand First Party, seeking to build opposition by whipping up fear that “foreigners” might come to own New Zealand assets.  This betrays the business-centered worldview of all the major parties, who seek to act in the ‘national interest’ of bosses while ignoring the fact that the main conflict is right here, between local corporations and a working class that is increasingly diverse and international in character.

Most recently, the Labour Party announced its new policy aimed at regulating the electricity market.  The policy, supported by the Greens, is to create a government body called ‘NZ Power’ to be the sole buyer of electricity from power-generating companies (like those up for privatization), in place of the current spot market that operates between power  generators and the retail companies who on-sell it to consumers such as ourselves.  The announcement put a small spanner National’s privatization plans – trading in Mighty River Power shares was briefly halted last week – but it failed to stop the sale and less than 10% of investors taking advantage of the opportunity to hand back shares they’d pre-ordered.  What has been suprising is the venom of John Key’s response. Key called Labour and the Greens “far left” and claimed the policy would make New Zealand like the Soviet Union.  The media back up National by trotting out stock-exchange analysts and hedge-fund managers squealing about the money wiped off the stock exchange after the announcement (all of which was regained less than 5 days later).

In spite of all the vitriol however, the policy can hardly be called ‘left-wing’, let alone communist!  Labour and the Greens don’t plan to renationalize the power companies, much less run them in the public interest.  The policy isn’t the result of a rebellion from below, as some left-leaning bloggers have suggested.

To be sure, the proposal for enhanced regulation is a welcome change from the prostration before the free-market that’s dominated politics for the past 30 years, but as regulation goes it’s mild.   In actual fact it’s more in line with the pro-business, pro-market policies both parties have adhered to since Labour began market-orientated reforms in electricity in 1987.  It’s quite possible the profit-driven State-Owned Enterprise model will be applied to NZ Power itself and David Shearer has been at pains to explain the gains for households from the resulting “increased competition amongst electricity retailers”.    The final paragraph of Labour’s policy document, which talks of the “value added strategy” they envisage for “NZ Inc” is perhaps symbolic of Labour and the Green’s outlook.

So what do we need?

The weakness in both the campaigns of the Māori Council and the Labour Party is the neither has been able to go beyond the status quo of a profit-driven society.  The Māori Council, while delaying the sale, remains locked into negotiating concessions from the state via the legal system.  Any concessions are to be celebrated, but as long as the capitalism continues, it will drive the priorities of the state and the ability of working-class Māori to share in the benefits will be limited.  Labour and the Greens, for their part, remain bound hand and foot to serving the profit system every bit as much as National – which explains why it was Labour who made the first steps towards privatization in the 1980s, and why both Labour and the Greens have had difficulty distinguishing themselves from National.

What we really need is an alternative to the parties of the profit system.  We need a political party that puts the interests and benefit of working-people first, and dares to dream of a world beyond competition and profit.  That’s what socialists stand for.  Such a party could fight to raise such an uproar that the power companies would have to be renationalized no matter who is in power, and force change beneficial to working people as a preparation for wholly re-ordering society, without the xenophobic nationalism of Labour, the Greens and NZ First.  Such a movement would be the natural allies of the tangata whenua, and could guarantee their rights.  At the moment, we’re a long way from that movement – but we can get there.  A real, fighting left needs to be built, and the road runs through protest.