By Ralph Miliband.
By far and away the most important characteristic of the men who assumed executive power in July 1945 was the objective modesty of their ambitions, in economic and social terms. No doubt, they thought and spoke of a “new social order” which must be built upon the ruins of the war. But in terms of basic structure, that new social order bore a very remarkable resemblance to the old.
Perhaps the best and most significant token of that fact is that, had it been left to the Labour leaders, the Labour Party would have gone into the 1945 election free from any commitment to any measure of nationalisation whatsoever, save for the half-nationalisation of the Bank of England [...] What they wanted was a continuation in peace times of controls over economic life which had been introduced during the war, i.e. a more and better regulated peace-time capitalist economy, together with a much wider system of welfare provisions. That the Labour Government did assume power committed to a programme of nationalisation was the result of rank and file pressure before and at the 1944 Labour Party Conference [...]
The nationalisation programme which the government did carry through during its period of office was a good deal less extensive than the Labour activists had wished, or than those who had voted for Labour in July 1945 would in all probability have been ready to support; but it was nevertheless substantial, including as it did the Bank of England, coal, gas, electricity, railways, a part of inland transport, cable and wireless, and, very half-heartedly, in the latter stages of the government’s life, the iron and steel industry.
Nor is it to be denied that these were measures which the economic and political forces of conservatism more or less strongly disliked, which a Conservative government would not have wished to adopt. In this sense it is perfectly appropriate to say that there was a certain unhingement between these forces and the Labour government on issues of considerable importance.
On the other hand, there are a number of considerations which need, in this context, to be taken into account. One of them was expressed by The Economist in November 1945, after the government had announced its nationalisation proposals, except for iron and steel. “An avowedly Socialist Government, with a clear parliamentary majority”, it wrote, “might well have been expected to go several steps further . . . If there is to be a Labour Government, the programme now stated is almost the least it could do without violating its election pledges” [...] In other words, the government had introduced a minimal programme, for which capitalist interests, however much they might resent it, could well, in the circumstances of the period, be grateful.
Secondly, it is hardly irrelevant to the issue that some of the nationalisation measures proposed and carried through by the government had been advocated or at least endorsed by Conservative and Liberal politicians as early as the first world war; and that, as Professor Brady has noted, a number of such nationalisation measures had been recommended “by Conservative dominated fact-finding and special investigating committees” [...]
Thirdly, and perhaps most important, the government could scarcely have been more generous to the interested parties in regard to the all-important question of compensation: all in all, capitalist interests made an excellent bargain, in many instances a much better one than they could have made had they been left in command of their property.
Finally, the exceedingly conventional, bureaucratic and “business-like” manner in which the government envisaged the administration of the nationalised industries, combined with its appointment of men drawn from large-scale enterprise to their boards, helped to ensure that the enlarged “public sector”, far from proving in any sense an embarrassment — let alone a threat — to the private sector, would in fact become an exceedingly useful adjunct to it.
In this light, it is easier to understand Attlee’s recollection that “there was not much real opposition to our nationalisation proposals, only iron and steel roused much feeling” [...] For all the talk of a “mixed economy” which these measures engendered, not to mention the often-expressed view that Britain, because of them, had undergone a “socialist revolution”, all nice and peaceful, nationalisation not only did not weaken British capitalism; in some essential regards it strengthened it.