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Opinion

What Lenin got right about capitalism

Many denationalised industries live off taxpayer-funded support, meaning shareholders are effectively living on welfare, says John Bird

I am constantly reminded of a comment attributed to Lenin on the morals of money: “The capitalists will sell us the rope with which we will hang them.” You don’t have to love the trajectory of Lenin’s own course through life – as the father of the USSR, according to the blue plaque outside his 1903 home in London’s Bloomsbury – but you can embrace the wisdom of the comment. 

If you want to negotiate your way through the business wilderness of modern life it is best to bear in mind that enterprises like the water companies – bought and created out of nationalised, taxpayer-funded assets – will be there for the money. And will, as has been alleged, shift resources from fixing leaks and poor apparatus into the pockets of shareholders. Because shareholders are the reason they are in the business. And the business is the manufacturing of the opportunity to make money for the shareholder. 

I have a particular interest in water because there was precious little of it when I was born. Slums don’t throw up welters of water, and slum thinking  – the adaptation of thinking that goes with poverty – rarely sees the advantages of common, clean water. I have remained permanently thirsty therefore for water, and when I hear of leaks I am particularly aware of waste. 

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So capitalism creates a product out of a nationalised asset, which was previously nationalised out of a private asset that wasn’t working: virtually all nationalised assets were badly working private assets.

Then, later, it is returned to the bear pit of the marketplace. Sold off, it often rises to profitability because of private investment and public purchasing, ie the client has to buy the stuff – in this case water – anyway.

Where Lenin’s comment cuts deep is that privatising a nationalised service and wringing profits from it in advance of better provision – massive leaks in the case of water – will undermine and destroy the company. And will possibly lead to a regime that in desperation will expropriate the profiteers’ company without compensation. 

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The badly playing marketplace economy of today, coupled with runaway inflation, is building its enemies. Because profit comes before life. And that is one of the despairing points of today’s marketplace. “But it has always been thus”, runs the argument; although now such behaviour is creating a sense that the “unacceptable face of capitalism” is becoming visible everywhere. 

It was a Tory prime minister – Edward Heath – who used that term in the 1970s when capital and society seemed to be heading towards a clash. And a similar road seems to be opening up before us now.

The shredding of state assets, paid for by taxpayers and often former bankrupt businesses taken into state ownership – coal, railways, the car industry, steel, shipbuilding – has been a mixed blessing. Claims of efficiency levels going through the roof are often hollow, because high levels of state-sponsored support and investment, tax breaks etc underpin what looks like private enterprise. 

So honesty, and where the money comes from, is rarely talked about truthfully, because what many denationalised industries – the railways in particular – do is live off taxpayer-funded support. In some ways you could say that many of our richest shareholders are living on welfare: the teat of the state, presented in a hidden way. 

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The big crime of raiding government assets and being enriched by state money is one that won’t be addressed by whoever next sits in Number 10. This is too near the knuckle. The pork-barrelling thrown up by Covid has yet to be fully exposed, though many voices are working on it. Any enterprise that the government has to work with will throw up real issues around payola. And also what happens to former ministers when they leave the comforts of office and enter the marketplace. Many denationalised industries have boards decorated with former government ministers and civil servants. 

But back to the rope and the aphorism: we have to expect that capitalism will always put profit first, unless there is a government that disallows it. A Parliament that will not accept it. And a populace that will not sit idly by and watch the stripping and the devaluation of public life and its assets. 

Possibly the true meaning of my Lenin quote is how shortsighted and limited the eye of capitalism is. How this world is being destroyed for us all by the rapacious free run that capitalism is given, sowing seeds of anger and desperation. Which moves people to action. Political action that increasingly makes it look like capitalism is becoming unsteady and its foundations found to be built on sand.

John Bird is the founder and editor in chief of The Big Issue. Read more of his words here.

This article is taken from The Big Issue magazine. If you cannot reach your local vendor, you can still click HERE to subscribe to The Big Issue today or give a gift subscription to a friend or family member. You can also purchase one-off issues from The Big Issue Shop or The Big Issue app, available now from the App Store or Google Play.



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