From Nationalism to Nationalisation

Last month, Hugo Evans asked what I would suggest as a programme to get us from nationalism to nationalisation. The short answer is that I'd focus on what he described as "functional finance state investment targeted at future energy". To explain the rationale for this choice I need to outline the relationship of nationalism and neoliberalism, as I see it, and to do that I first need to explain the difference between nationalism and nationalisation. That might appear like a category error, comparing a political and cultural construct with a method for organising and managing parts of the economy, but in fact they both represent fundamental attitudes about who constitutes "the people". Historically, nationalism and nationalisation haven't been mutually exclusive, but they have been inversely correlated in industrial societies. Nationalism tends to prosper in eras when the needs of the people are heavily subject to the market, whereas it declines in eras when more of those needs are met by services that are owned and managed for universal benefit rather than private profit.

The key then is public goods, most of which were a consequence of industrial modernity - e.g. municipal utilities, national transport and communication networks, and the capitalist demand for the state regulation of labour (public health, housing and education). The impact of modernity explains the difference between the liberal nationalism of the early to mid-19th century, which projected the nation as in opposition to supra-national monarchies and whose socio-economic premise was the primacy of private property and the superiority of the market, and the nationalism of the period between the late-19th century and WW2, which sought to re-establish an organic sense of the national community in an era distinguished by rapid urbanisation and thus the profusion of public goods. Nationalisation, as a method of socialism, argued for the primacy of common ownership and the superiority of planning over the market, however this wasn't simply a continuation of the old argument from the Diggers onwards for the common ownership of the means of production but an expanded argument for the common ownership of public goods. In other words, both nationalism and nationalisation are responses to industrial capitalism and the growth of those goods.

The essential antipathy of the two stems from the fact that public goods are non-excludable (i.e. open to all) and non-rivalrous (i.e. one person's use doesn't limit another's access). This doesn't imply abundance or ease of access, as anyone who experienced the 70s or early 80s would confirm, but the absence of discrimination on the basis of personal attributes. In contrast, nationalism believes that rights and entitlements should be dependent on personal qualifications, whether that be in the form of a passport or a yellow star. Some public goods, such as roads, may be publicly owned under nationalist regimes, but the use of nationalisation as a policy to promote nationalism is rare outside of the short-term expropriation of foreign-owned assets. In practice, nationalist regimes prefer to privatise state industries and develop a clientelistic relationship with domestic capitalists. In other words, the focus of state interference by nationalists is on moulding the people rather than adjusting the relations of production.

The nationalisation of strategic industries, many of which had little direct impact on the public, and the reliance on central planning directed by the state were features of actually-existing nationalisation in Western Europe during les trente glorieuses, however these were often contingent (e.g. the demands of postwar reconstruction or industrial consolidation that the market failed to provide) or the result of a conservative apparatus being absorbed by a state wary of workers' control (e.g. the persistence of old management in the NCB). The neoliberal drive for privatisation in the 1980s initially focused on these tactical nationalisations, not only because they were more vulnerable to the charges of inefficiency and under-investment but because they offered an easier route to normalising the idea of private provision ahead of the more fraught privatisation of public goods. The shift of focus to the latter in the 1990s marks the point at which modern nationalism gains political traction. This is not mere coincidence but reflects the promotion of national integrity and scarcity in political rhetoric.

The cost of effectively policing entitlement to public goods is high. For example, the NHS drive to bill foreign users will almost certainly be a failure relative to its ambitions, and could even cost more than it recoups, while trying to reclaim public subsidies for transport use by foreigners is a non-starter. This difficulty encourages policing of the perimeter instead, hence nationalism in the era of the welfare state has become increasingly obsessed with border security and residency rights. Where once nationalism was aggressive in expanding territory to absorb communities that included both claimed members of the "volk" and others, today it tends to be defensive and even willing to countenance the exclusion of areas within the heart of the nation state. The contemporary trope of the "no-go area", popularised by right-wing media outlets such as Fox News, riffs on traditional ideas of segregation, from the medieval ghetto to Apartheid, in which specific areas are defined not just by their inhabitants but by the withdrawal or limited provision of public goods. The initial political demand is not that these areas should be reclaimed or cleansed but that they should be denied public subsidy. Though "blood and soil" still motivates the ethno-nationalist core, it is not what gives political nationalism its modern prominence.

The nation is becoming an increasingly virtual concept, rather than one strictly co-terminus with a land, which reflects not only the diversity and dispersal produced by modern migration and integration but also the normative impact of the US right, with its history of segregation through zoning and its rhetoric of "welfare queens" and "government handouts" to favoured minorities. The history of the European right over the last 70 years can be thought of as a shift from warfare nationalism to welfare nationalism under American influence. The integrity of the nation is no longer simply a matter of ethnic or cultural homogeneity, despite the attempts by ethno-nationalists to construct a supreme antagonist out of Islam, but a question of entitlements in respect of the provision of public goods. This has produced an ideological cleavage on the right between conservatives contemptuous of all welfare and nationalists insisting on the prioritisation of certain types of welfare for the "decent people" who constitute the nation. This has an obvious class bias, so schools and health are good while unemployment benefits are bad, which allows conservatives and nationalists to find some common ground berating the lumpen elements of the "white working class".

The increased international movement of people obviously plays a part in this growing concern with security and national integrity, but so too does the growing importance of public goods in an advanced society. This is the result of three developments: advances in technology that create new public goods (or expectations that they should be public goods), such as broadband access or new medical treatments; the increased utilisation of existing public goods (more years in education, more years in hospital or care); and the secular increase in the dependency ratio (those not working versus those who are), which means a larger percentage of the population conscious of its reliance on public goods such as the NHS. Since the 1980s, the neoliberal state has insisted that public goods are in limited supply. This is a claim that was first justified by "crowding out" (we must curtail public services to allow private enterprise to thrive), then by the need for market optimality (New Labour's "what works") and now by the need for permanent austerity. The persistent message is that we, the atomised public, are in competition for scarce resources.

This is most obvious in the area of healthcare, not just because of the sharp increase in dependency (more elderly and more chronically ill) but because the NHS has always been characterised by two features: its national scope and its implicit rationing (the rightwing media's obsession with expensive cancer treatments leverages this to promote rivalry and thus competition). That this gives rise to contempt for the disabled or those assumed to be guilty of self-indulgence (e.g. the over-weight) is repellent but rational within the confines of a narrative of scarcity: the disabled and morbidly obese will place proportionately greater demands on the NHS. What isn't rational within this narrative is xenophobic resentment: the belief that immigrants get more than their fair share and are therefore denying resources to natives (on average, they are net contributors because they are more likely to be working and not chronically ill). This irrationality is not just about the convenience of "the other" as a scapegoat but about the growing identification of beleaguered public goods as attributes of nationality during an era when traditional characteristics (ethnicity, religion) have become less salient.

It is for this reason that we can say that nationalism is a product of neoliberalism and not just of austerity. More specifically, it is a product of the assault on public goods rather than any more general promotion of the market. This means that reversing the growth of nationalism does not require the wholesale dismantling of the neoliberal state or reform of the broader economy, it simply requires the reconstitution of public goods as non-excludable and non-rivalrous, thus making national integrity and scarcity less relevant to people's everyday lives. This doesn't just mean ensuring adequate capacity to avoid divisiveness, but advocating universal provision as being in everyone's interest for reasons of effectiveness and efficiency. To this end, we should be selective in our priorities for nationalisation. Most people's leading candidate would be health and social care (i.e. integrate, reverse privatisation, adequately fund), however I'd suggest that another area should take the lead for psychological reasons.

The biggest public good of all is the environment and it faces a clear and present danger in the form of climate change, the largest contributor to which is fossil fuels used in energy production. We know that climate change cannot be adequately tackled by the free market, even when heavily regulated by the state. Profit will incentivise destructive commercial activity beyond any safe limit while resistance to regulation will ensure that negative externalities continue to be subsidised. Practically, switching to a low or zero-carbon energy production system requires central planning and thus comprehensive nationalisation of power generation and supply. The psychological value of this would be threefold: the expression of the power of nationalisation through the dramatic reordering of an entire industry for the common good; the universal impact, because the vast majority of us pay energy bills; and the high probability of tangible benefits, e.g. demonstrable reductions in CO2 emissions. A focus on the environment has the advantage of defining the scope of public provision as the whole land, thereby undermining the narrative of internal segregation, and it also emphasises quality over quantity, so scarcity becomes a second order issue. For this reason I'd recommend introducing a land value tax as an explicit environmental charge that could cross-subsidise energy bills during transition.

Renationalising health and social care should be done, but we ought to recognise that this would be less dramatic (given the limited privatisation accomplished to date and that fixing PFI is an accounting exercise), less evident to many (i.e. it is the sick and elderly who would disproportionately realise the benefits), and less likely to deliver demonstrable gains because of an ageing society and the structural inefficiencies of a labour-intensive service. For similar reasons I'd also pursue rail re-nationalisation with less urgency than the reordering of the energy sector. Rail doesn't offer the same potential for success because the fundamental challenges are to do with capacity versus a spatially-imbalanced economy, so optimising the railways will take longer than converting to green energy, plus the major beneficiaries would be middle-class commuters. What I would recommend, as a side-order, is the nationalisation of car insurance, not only because it would be relatively easy to do and would deliver immediate cost savings, but because it would be a dramatic demonstration of the power of nationalisation that would affect most people.

Liberals tend to frame the contemporary growth of nationalism as the aggregate of individual responses to economic stress since 2008, often citing the parallels with the 1930s. While an economic crash can provide nationalists with a narrative opportunity (elites, traitors etc), it tends to amplify an existing trend rather than create an inflexion point. Thus the nationalist revanche of the 1930s is inconceivable without the nationalism of the first two decades of the century, while contemporary nationalism starts its ascent in the late-80s / early-90s and owes more to globalisation and neoliberal hegemony than Lehman Brothers. The liberal attitude is rooted in religious tropes about individual weakness and temptation in the face of adversity, which reduces social formation to the madness of crowds. It ignores the communal dimension: that popular nationalism (as opposed to the minority interest of programmatic racism) is a product of how we envisage ourselves cooperating with others, hence the importance of public goods. To defeat xenophobic nationalism you need to talk the language of community, but in terms of our common interests and basic human rights rather than our cultural heritage or exclusivity. The solution to nationalism is nationalisation.