Capital is said by a Quarterly Reviewer to fly turbulence and strife, and to be timid, which is very true; but this is very incompletely stating the question. Capital eschews no profit, or very small profit, just as Nature was form erly said to abhor a vacuum. With adequate profit, capital is very bold. A certain 10 per cent will ensure its employment anywhere; 20 per cent certain will produce eagerness; 50 per cent, positive audacity; 100 per cent will make it ready to trample on all human laws; 300 per cent, and there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged. If turbulence and strife will bring a profit, it will freely encourage both. Smuggling and the slave-trade have amply proved all that is here stated.
T. J. Dunning, Trades’ Unions and Strikes,” London, 1860, pp35-6, quoted by Marx in Capital Vol. 1 (p712, Lawrence and Wishart edition)

Rail works...

All across the world, capitalism is re-invigorating the rail network wherever it can find the capital to do so. This is because rail transport is the most economic form of mass land transport, and this fact outweighs any ideological attachment capital has to road transport.

Britain, however, is a special case. The Channel Tunnel, by connecting Britain to the European rail network, has dramatically shifted the efficiency argument even more in favour of rail than it was in the past. Also, Britain seems to hold the European record for neglecting the railways in the past.

But, to realise the potential of the railway through Channel Tunnel, it needs to be efficiently connected to the rest of the network, and not, as now, by lines with speed limits which belong to the age of steam (and not the end of that age, either).

... if you can afford the train set

Improving or restoring the railways is a very capital intensive operation. For example, the initial estimate for the West Coast Route Modernisation (WCRM) was £2.2bn (according to Iain Coucher, the managing director of Network Rail, the not for profit successor of Railtrack, speaking to the Railway Forum and reported in the International Railway Journal - IRJ, 4th July 2002).

However, as regular readers know, capitalism is suffering from its endemic cause of crisis: the falling rate of profit.

In order to attract investment when profit rates are low, and, according to the quote at the head of this article, capital is timid, the Government had to offer the Sun, the Moon and the stars, in order to artificially push up the rate of profit, and the courage of capital, in activities connected with the railway. In return for promises to run the railway well, or, as the IRJ reports Britain’s brand-new Transport Secretary as saying:

Darling said operators need to bring in the flair[!] and eficiency[!!] they promised when the railways were privatised.

ibid.

The rail operators were put under a system of regulation so lax as to constitute carte blanche to run the system as they pleased.

On top of that, they were also given such a generous amount of subsidy that the 1999-2000 operating profits of the industry (£830mn) consisted entirely of Government money, which also covered a real loss of £470mn, amounting to a total of £1.3bn.

And, when Railtrack had to be declared bankrupt, the Government threw in the planets as well, and are paying the shareholders 89% of the price of their shares at the point when trading was suspended. Where is the so-called “free market” in all this? The free-market price of shares in bankrupt companies is 0% of their price immediately before the point of bankruptcy! This is state monopoly capitalism, working so that “private” investors would not be scared off by the prospect of failure when investing in other rail projects like the later phases of the Channel Tunnel Rail Link. If this kind of attitude was prevalent in the (proper) betting industry, the Government would have stepped in on behalf of the bookies and given back the stakes of those who, whilst blinded by patriotic idiocy, bet on England to win the World Cup, so that the punters would not be frightened to back them for the European Championships!

The ideology of “privatisation”...

When the ideologues of privatisation talk, they tell you that taking things out of state hands releases the power of private initiative and of competition. They often point at BT, contrasting the inefficient dinosaur which was part of the Post Office with the highly profitable, hi-tech inspiration that it is today.

Leaving aside the fact that some of the gloss of BT has worn away, the problem with this picture is that it has nothing to do with reality. In the particular case of BT, its privatisation coincided with a technological revolution in its sector, which benefited all telecom companies across the world, including ones which remained in Government hands. The privatisation at most released some capital which eased BT’s participation in this revolution, but the technological revolution itself was the root cause of BT’s initial success.

In general, in the cases where privatisation is not simply a surrender of the control of sectors to international imperialism, the state maintains control of the industries which have been privatised, except where these lack strategic economic importance. In the case of the railways, the overall strategic plan is determined by the state, which then offers franchises to rail operators. Once these have been taken, the state is not very strict in its supervision of the operator in question, because of the need to raise capital, as we have already seen.

But we live in a world where capitalism tends to believe in miracles. It is more comforting to believe that privatisation rather than technological revolutions produce the all so elusive profitability, because privatisation is a possibility in all nationalised industries and not just where new techniques are available. The privatisation of the railways took the bizarre form that it did, with the track being owned by one company, Railtrack, and the trains being owned by many companies, all of which leased time on the lines from Railtrack, because the bourgeoisie believed that the resulting fragmentation of responsibility was a price worth paying to simulate competition (by the very nature of rail transport, there is little real competition), so necessary for the magic to work.

... and the failure of ideology

But no miracle arrived. The born-again private railway was just as unprofitable as it was in its nationalised life. Worse still, birth is a difficult process to be undergone as few times as possible, and the newborn suffered from the nature of its rebirth (this is also observable in many Christians!). A centralised state railway was unable to overcome its basic problem of a lack of investment. The privatisation, although not a reversion to the days of laissez faire, did introduce a lack of centralisation and co-ordination. Indeed, this lack is very attractive to the companies involved, and probably is behind their continued interest in further schemes like the British bonanza. For example, First Group, one of the British operators, is seeking involvement in the running of US railways (in the light of the Amtrak crisis there), and another, Stagecoach is trying to take over the passenger operation in Wellington, New Zealand (see IRJ, June 6th). Obviously, they are doing quite well out of the crisis of the British rail system and want to repeat the experience elsewhere.

Remember Mr Coucher, and his £2.2bn initial estimate for the WCRM? Well, he went on to say that he was puzzled as to why this had gone up to £6.8bn in April 2001 and stood at more than £13bn in July this year. But his boss, Transport Secretary Darling, has the explanation: “Not enough attention is being paid to ensure that sub-contractors do what they are supposed to do” (IRJ, July 4th, again). Isn’t “losing” £6.2bn in little over a year on a single project a little careless? Or is it a case of giving the private companies an inch in the hope that they will provide investment, and finding that they take a mile, and leave you still in need of investment?

Naturally, the outcome of this farce was that the Government paid out more than it would have done if the railways had remained directly under its control. But, don’t worry, there is still the milch cow of the working class, in its guise of taxpayer and commuter, as well as worker per se, to pay for the crisis of capitalism as it manifests itself in the transport sector, as well as this botched attempt to conjure the crisis away.

Let’s all pretend it didn’t go wrong

The collapse of Railtrack left £9bn of debt. This debt has been handed down to the successor, not for profit, company, Network Rail. Apart from the fact that this figure will certainly help Network Rail to be without profit, it is highly embarrassing for this “prudent” Government to have it on its books. It is alleged that the Government’s decision to keep the £9bn off the Public Sector Borrowing Requirement is “Enron-style” accounting. But Enron wasn’t so stupid as to tell people that it was going to defraud them before it defrauded them!

Renationalisation?

Clearly, the fragmentation of responsibility which has occurred under privatisation cannot be good for safety.

But the real problem is not privatisation or nationalisation but the lack of investment in the network. A look at the record (in the Table) of fatal accidents over the last 20 years shows that this is true.

The railways were privatised between December 1995 and April 1997, according to a timetable established in March 1994. There is clearly no pattern of increased numbers of fatal accidents after privatisation, which is what reformists like the Socialist Workers’ Party are forever arguing. Capitalism simply cannot generate enough profit to rebuild the railways with much concern for the safety of passengers. Renationalisation of the railways will not absolve them from the operation of the laws of capitalism. On the contrary, it will not provide an iota of extra investment, and it won’t remove the pressure to cut corners on safety or to push down workers’ wages.

In no way will reversing the privatisation at all help provide the efficient, comfortable and safe transport service which is a human need. Fighting for renationalisation is a complete waste of time. It is a pointless struggle which can only waste the energy of workers and prevent them mounting a successful struggle for their real interests. Whether the railways are private or nationalised the laws of capitalism will still ensure that rail workers conditions and pay are under attack and that their jobs are at risk.

Fighting back

The proletariat is being asked to pay for a capitalist crisis, with its effects in every sector of the economy, which is not of its own making. The railworkers, too, are under attack, being offered derisory increases which will maintain them in low pay.

But, to fight back, they need to organise their own struggle and extend it to other workers. The unions have a loyalty to the capitalist system which gives them the role of managing labour power. Even the left union leaders defend their industry and its capitalist framework. For example, Bob Crow, the present darling of the SWP, welcomes state help for the very companies “his” workers will be fighting against: reacting to the news that the Government has given the infrastructure companies Metronet and Tube Lines, which have won contracts to manage tube lines in London, immunity from fines incurred as the result of industrial action, said that the protection was “better than winning the National Lottery” (Financial Times, 19th July 2002). Although it is clear that the Government, in the event of industrial action, is very likely to do this sort of thing to protect the employers, it is illuminating that Bob Crow supports this move to reduce the impact of strike action.

Although the unions cannot be trusted to do anything but serve capitalism, this does not mean that workers cannot fight back. They can, but they will have to do so outside and against the unions, organising their own fight. This movement to defend themselves is the first step in the fight for a better world.

Capitalism is only interested in profit, not in satisfying human needs such as decent transport. Only a society which produces in general to satisfy need, will satisfy the particular need for real freedom of movement, which requires free access to the material means of movement. Only communism will truly enable us to enjoy the fruits of the whole of our world.