The story behind Powell Duffryn
In Regent Street, in the posh shopping area of London, is a shop called POWELL DUFFRYN. Now that nationalisation is once again a political issue it is not out of place to tell the story behind this name.
It begins in South Wales, where Powell Duffryn used to be one of the hated coal combines owning pits in the Red Rhondda valleys. Between the wars these coal combines, by their persistent attempts to worsen wages and working conditions and by their union-busting, aroused deep resentment among miners, many of whom devoted their time to campaigning for the nationalisation of the mines. And on January 1st, 1947 their aim was achieved. The mines were handed over to the National Coal Board; the NCB flag was raised amidst cheering and the singing of traditional Labour songs. Powell Duffryn was dead. Or was it?
As a side-line to mining, Powell Duffryn was also engaged in the making of heating equipment, boilers and radiators. This side of the business was not nationalised. In the years that followed, while the NCB languished, Powell Duffryn used its compensation and flourished. Today it has its shop in Regent Street; it co-operates closely with the nationalised fuel industries—the Gas Board and the NCB. Not long ago the papers carried a joint Powell Duffryn-NCB advert. All of this is a mockery of the devoted, if misguided, struggles of the miners to nationalise such outfits, and yet another monument to the futility of reformism.
It is worth spending some time looking into the concept of nationalisation a little more closely. In its modern sense, the term first appeared in 1869 when the telegraph system was nationalised, though for some time before the concept had gone under a different name. Some people had called for the nationalisation of land, and a clause in the 1844 Railway Act had allowed for the nationalisation of the railway system if necessary. The word itself—nationalisation—gives a clue as to its significance. The dominant theories, popular and philosophical, of capitalism hold that the interests of all those who make up the entity variously called the “nation” or the “public”, on the popular level, and “society” or “the community”, in the textbooks of political philosophy, are one and the same.
This is a fraud. Present-day society is composed of two mutually antagonistic classes, between which there is a conflict over the distribution of the product of labour. The interests of these two classes are completely opposed; they have no interests in common. Once this is realised, it can be understood that “nation” and “public” are often little more than polite words for the owning class.
When the apologists of capitalism wish to refer to the situation which exists after the State has taken over a section of industry in the interests of the capitalist class as a whole, they sometimes call it “common ownership”. This is how the phrase is used in the famous Clause IV of the Labour Party constitution in its reference to the “common ownership . . . of the means of exchange” (i.e. financial institutions). To talk of the common ownership of financial institutions is a contradiction in terms, the purest nonsense. But to those who use “common ownership” in its capitalist sense it makes sense. As has been well said, the Labour Party stands for “socialism for the capitalist class”!
The capitalist class has been prepared to consider nationalisation as a solution when their interests as a whole have differed from those of a section. This was the position with land in the nineteenth century. The landowners, by virtue of their monopoly position, were able to extract a portion of the proceeds of working class exploitation from the capitalist class. A similar fear that the railway companies might exploit their monopoly position was responsible for the clause in the 1844 Act. In both cases nationalisation, or the assumption of ownership by the State on behalf of the rest of the ruling class, was considered. This had one drawback; it meant that the State had to assume the management of the estates or railways it might acquire.
Most capitalists were not prepared to put such power into the hands of their State officials. The institution of the public corporation was a solution to this problem. It removed the fear of the State becoming more and more powerful and eventually taking over other sections of industry as well. This fear was not groundless; there are historical examples of this happening, in Russia for instance. Here the capitalist class as well as the working class, such as they were, were subjected to a dictatorship of the State. The system remained capitalism however and it eventually evolved into a form of State capitalism.
Where such disputes break out between the capitalist class and usurping politicians or State officials, the workers are invited to take sides. But their interests are no more involved here than they were in the old landowner-capitalist struggle. Despite this, “Leftwingers” delight in backing the new usurpers against the capitalists; only to find that the usurpers end by establishing themselves as a new ruling class. So nationalisation without compensation is no more worthy of working class support that the more moderate means of nationalisation that have been applied in Britain.
With the public corporation the capitalist class felt less fear about nationalisation, so that in 1944 Herbert Morrison could declare that the Conservatives had introduced more “Socialism” than the Labour Party. The nationalisations of the post-war Labour Government however identified the Labour Party as the party of nationalisation.
Soon after 1945, a large section of the capitalist class were becoming dissatisfied with the efforts of the Labour Party on their behalf. They were becoming annoyed at having to pay taxes to prop up inefficient State-run industries. Not that they were completely opposed to all measures of State control; they just came round to the view that nationalisation was not a suitable means of such control. This is the crux of the argument about steel nationalisation.
The Iron and Steel industry has been subject to a substantial amount of State control since the 1930’s. In 1951 it was nationalised but in the succeeding years the Conservative governments sold most of it back to the former owners. Ironically they could find no-one to buy Richard Thomas and Baldwin’s which is still nationalised today. The plans recently announced by the Labour government provided for the sole shareholder of some 90 per cent of the industry to be a National Steel Corporation which can thus control the industry as it wants. The Conservatives and Liberals favour what they call a more competitive solution.
The compensation measures—since in Britain nationalisa¬ion amounts to a business deal in which the State buys out the old owners—have been described in avowedly capitalist papers as reasonable, fair and far better than expected. One referred to “jubilation in the City”. It seems that some £660 million will have to be paid out. In present at stock-market conditions much of the government stock which will be given as compensation could well be sold and the capital re-invested in more profitable fields.
This brings us back to Powell Duffryn. The same story will no doubt be repeated for the steel industry as for the coal industry and the others. We conclude by quoting from a recent survey of the State in industry in Britain:
“Nationalisation deprived many companies of their assets but left them with huge sums in cash and stock for re-investment after compensating the former shareholders, The colliery companies alone received nearly £300 million from this source. Some companies became investment trusts; others took over and developed existing businesses or established new enterprises in fields where they could use their technical and managerial skill. Typical examples are Cable and Wireless (Holdings) Ltd.—now quite unconnected with the nationalised concern, Cable and Wireless Ltd.—which has invested its free money to build an interest in about 850 different companies; and Thomas Tilling (Holdings) which continues to manage the interests of the old Tilling Group that were not acquired by the British Transport Commission, and has used its compensation to acquire holdings in some twenty-five companies in industries ranging from light engineering to glass and plastics and from insurance to book publishing” (Government and Industry in Britain, 1962, J. W. Grove, p. 250).
A.L.B.