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  • Writer's pictureMichael Laxer

The Construction of Socialism -- The LPP on socialist nationalization, 1952

The Communist Party of Canada on the difference between capitalist and socialist nationalization.

Socialist Canada -- Illustration for the LPP leaflet, 1952

In 1952 the Labor-Progressive Party of Canada -- as the Communist Party was known at the time -- released a leaflet Canadian Independence and People's Democracy that outlined their program.

It covered a number of issues from foreign policy to Quebec independence, but one section that remains very relevant today tackled capitalist versus socialist nationalization.

This is a very important topic for leftists and the distinction between the two is profound and essential to understand ideologically. While this was more true at the time given the statism that many western capitalist governments engaged in, it is still a key point as people's understanding of what "socialism" and "socialist" ownership are is hopelessly muddled.

Understanding what separates capitalist state ownership from actual socialist ownership is laid out here in a succinct and accessible way. The leaflet also shows how social-democrats -- in this case the CCF the Canadian social democrat predecessor to today's NDP -- used the idea of capitalist state ownership to confuse the notion of what socialism was really about:


The historical development of Canada and the new perspectives opened up by the great changes in the world, combine now to make it possible for the Canadian people to organize a new people's state. This will be done by transforming Parliament —the historically-evolved form of the state in Canada—from the tool of the capitalist minority into an instrument of the will of the majority of the people.

Capitalist democracy is only formal democracy. Rights formally established in law cannot be exercised in fact because of the economic bondage of the working class.

People's democracy will be genuine democracy. It will establish for the first time real rights for the Canadian people, in fact as well as in law. Their rights will be genuine because they will be based on a new kind of economy, a Socialist economy, and maintained by a new kind of state, a Socialist state.


Socialist nationalization will become the basis of the economic policy of the people's government. All large-scale industries, railways, banks, insurance companies, big commercial enterprises and the natural resources will be nationalized and made social property by the people's government. Partial compensation will be made to those Canadians who do not resist the policy of the people's government, who accept the national economic plan and co-operate with the people's government. The interests of small stockholders will be protected.

It will bring the banks and key industries of Canada under social, public ownership — ownership by the people who produce all the means of life.

It will put an end to the profit-making and material basis of the power of the monopolists and halt the exploitation of the working class. It will wrest control of the economic life of Canada from the irresponsible, speculative, profit-seeking private owners and place it in the hands of the people and their government.

Such a transformation of ownership will make planning possible and open up great advances in the living and cultural standards of the Canadian people.

It will be the way by which the system of private capitalist ownership of the means of production will be transformed into social, or people's ownership of the means of production.

Under a people's government the presently public-owned enterprises such as the CNR, Trans-Canada Air Lines, provincial hydro systems and local transportation systems will become part of the new people's economy and will be placed under people's control.

This Socialist nationalization will be basically different from the policy of capitalist nationalization carried out by the Liberal, Tory and CCF parties.

Capitalist nationalization has been adopted by capitalist governments at federal, provincial and municipal levels to benefit capitalism by putting public treasuries behind the payment of interest on bonds. It has in the main been applied to auxiliary industries and is intended to provide service to capitalist industry as a whole, for private monopoly benefit. Thus the Bank of Canada does not serve the people but helps private-ly-owned banks to make greater profit. These state-monopoly enterprises become the mainstays of the war economy which now characterizes Canadian imperialism.

Under capitalist nationalization such as exemplified in the CNR, no change is made in the exploitation of the workers. Only the form of the capital has been changed. Private profits are guaranteed by the state.

CCF proposals for nationalization are of the same character. Originally the CCF program proposed to extend capitalist nationalization to a number of industries and many were led to believe that a CCF government would actually nationalize industry on a large scale. Experience shows that such governments in practice never carry through real Socialist nationalization. In words they advocate "socialism"—in deeds they defend capitalism.

It is clear that the goal of a Socialist economy desired by the great majority of CCF members and followers, can never be attained through the CCF, but only through a people's democracy.

Socialist nationalization puts an end to the exploitation of the workers for the benefit of private capitalists, lifts the enormous burden of rent, interest and profit from the backs of the working people and makes the fruits of industry the property of the people, enabling them to planfully develop industry and agriculture, raise their living standards and enrich their leisure.

Capitalist nationalized enterprises are bureaucratically administered. Their governing boards are dominated directly or indirectly by representatives of the main groups of private capitalists. This is true also under a CCF government, as in Saskatchewan, and a Labor government, as was demonstrated in Britain. The change is only in form. The workers continue to be ruled by capitalist bosses.

Socialist nationalization completely eliminates the capitalists and their political representatives. Governing boards will be composed of workers, farmers and technicians. Workers in the enterprises will participate directly and authoritatively in the discussion and decision of production proposals, plans and targets. Socialist competition will lift the whole level of the utilization of the means of production. Democratic participation of workers and their unions in management is ensured at every level from top to bottom. Once the capitalists are excluded, the workers and their unions become the main force for raising production with the full knowledge that every increase in production means increased earnings and a higher standard of living for the workers instead of increased profits for the capitalists.

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