Re-imagining Public Ownership

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By Andy Cumbers Scottish Left Review Issue 74

As the politics of austerity and a reheated neoliberalism bite ever further into the public realm, there is an increasing urgency for an alternative political economy framed around social and environmental justice. But, although there is no shortage of grassroots and opposition movements, there is a depressing lack of serious debate about what concrete forms such alternatives might take.

The emergency nationalisation of the banking system in North America and Western Europe has done little to challenge the political elites in their unshakeable belief in the merits of private ownership as a solution to all economic problems. As the recent ‘return’ of the Northern Rock to private ownership shows, public ownership is regarded as a temporary solution until ‘business as usual’ resumes. The reality that the Northern Rock was for its first hundred years a local mutual organisation has been conveniently airbrushed from official accounts.

On the left, with a few exceptions, we seem to shy away too readily from discussing an alternative political economy, stuck in a resistance groove, rather than rising to Gramsci’s call for a ‘war of position’. In particular, there has been a surprising silence, given recent events, about public ownership. Two particular questions are apposite. How do we learn the lessons of past experiences? And, what forms are appropriate to the dramatically changing economic landscape of the twenty first century?

Contesting the hegemony of the private

In a new book – Reclaiming Public Ownership: Making Space for Economic Democracy (Zed Books) – I argue that we need to challenge the fetishisation of ‘private good, public bad’ that retains its grip on policymakers. Adam Smith’s heroic individual and Schumpeter’s entrepreneurial innovator long ago gave way to the large, private corporation and nefarious financial institutions as the dominant agents shaping our economic reality.

More recently, what I refer to as a ‘globalised privatisation regime’ has concentrated economic assets and decision-making in fewer and fewer hands. As the Figure below shows for the UK, Thatcher’s share-holding democracy of private individuals proved a useful piece of fiction, a handy short-term electoral device for her project of remaking the British political economy in the 1980s. In the longer term, her privatisation programme, and that of subsequent governments, has concentrated economic decision-making power considerably, whilst shifting the balance of power in the economy away from productive activity to increasingly speculative finance-based capitalism. As the figure below shows, the percentage of shares held by individuals in Britain’s publicly listed companies declined from 54 per cent in 1963 to 10 per cent by 2008 while that of foreign corporations increased from seven to 40 per cent over the same period.

The left needs to be far more vocal in both revealing the creeping corporate autocracy that increasingly dominates our lives, whilst renewing a project for a more radical democratic economic vision. But it also needs to engage with the right about some of the failures of past nationalisation programmes. A questioning of the rationale behind private ownership should not take us back to the monolithic state enterprises of days gone by. Instead, we should be open to the possibilities that new and diverse forms of public ownership might offer. To do this effectively, the left needs also to wrestle back terms like freedom, democracy, and the rights of the individual from its capture by the Hayekian right.

Democratising the economy through a regime of decentred collective ownership

Invoking the late Paul Hirst, socialism’s best answer to the free market fundamentalism of the right and the centre left’s accommodation with neoliberalism remains the vision of a real radical democracy. Critically, I argue that we need new forms of collective ownership that draw upon a diverse set of institutional arrangements as the best means for stimulating economic democracy, innovation and social justice. In the book, I set out five guiding principles for a renewal of public ownership:

a commitment to social justice as class justice in the sense advocated by Marx,

where workers have decision-making power with respect to their own labour;

a renewed engagement with older forms of mutualism and collectivism to build alliances beyond the left’s traditional social base;

a commitment to the promotion of knowledge creation, innovation and diversity in economic practice;

the importance of dialogue and pluralism in economic decision-making;

a regime of decentred and distributed decision-making.

The last point is particularly important in countering the neoliberal hold on public discourse.

Following Hayek’s devastating critique of public ownership as centralised planning, it is unrealistic to imagine that all economic decisions can be subject to collective democratic planning.

Nevertheless, this does not detract from the need to try to find solutions that open up the economy to more collective and participatory decision-making processes as a general philosophy.

Whilst an alternative political economy will require the need for planning and ownership at higher geographical scales, these need not necessarily be concentrated within particular places, organisations or social groups. What it does require is a commitment to the decentring of knowledge and decision-making power wherever possible to a plurality and diversity of organisations and associations (e.g. mutual bodies, trade union research networks, small business associations, government and autonomously funded think tanks) to offer alternative and competing interpretations of economic problems.

Of course, there are no guarantees in any economic system that elite or special interests cannot capture policy agendas to the detriment of the common good, but dispersing functions, knowledge and institutional capacity does at least provide important countervailing tendencies. In the book I illustrate this point in different ways through Norway’s state-owned oil industry and Denmark’s decentralised and collectively owned renewable energy complex.

While Norway’s oil development was channelled through the institution of a state oil company, Statoil, as a means of safeguarding the nation’s interests, there was a remarkable level of public engagement and participation in energy matters in the 1970s. A radical civil society formed to contest corporate and multinational control of oil resources. An active trade union movement, the establishment of the Petroleum Directorate (hereafter PD) as a separate organisational actor to Statoil with its own knowledgeable staff, and the detailed scrutiny of Statoil and the legislative power to hold its board to account by various parliamentary committees, ensured a full and democratic debate unparalleled in any other oil producing country. Although an oil industrial complex has come to dominate Norway’s oil affairs in recent years, the country is still a beacon for a more social and environmentally responsible approach to energy development.

Denmark is interesting for the way in which a diverse range of collectively owned institutions from state owned energy producers, local wind co-operatives which account for 80 per cent of the sector and municipally owned electricity distribution companies ensure a degree and diversity of public participation and engagement in economic decision-making unparalleled elsewhere. The Danish success story, in producing one of the world’s leading renewable energy sectors, is compelling in illustrating the potential for harnessing older rural traditions of mutualism, associationalism and collective practice with contemporary progressive concerns in combating climate change. There are examples of considerable public sector innovation at the local scale, notably the municipal-cooperative model of ownership piloted in the Copenhagen Mittelgrunden offshore wind development.

New forms of public ownership continue to flourish elsewhere too with interesting local examples that can be applied more generally. Latin America is rightly celebrated for its role in challenging neoliberalism with nationalisation agendas in Bolivia and Venezuela to the fore. However, some of the most interesting and novel forms of public ownership and partnership are being constructed at the municipal level, through ‘public–public’ partnerships emerging between cities in Latin America and Europe and Japan in opposition to the ‘top-down’ IMF- and World Bank-imposed models of privatisation.

Updating Marx’s vision

Karl Marx’s nineteenth-century critique of capitalism, and the appropriation of common wealth for private interests, remains as pertinent today as when he wrote it. This requires a commitment to egalitarian values and principles that can at the same time be sensitive to different contexts in time and space. There is no ‘off the shelf’ nationalisation model of public ownership that can be applied everywhere to retake the economy from elite interests. Rather, there is a need to work with existing and diverse traditions of collectivism in civil society to push forward an alternative economic project.

This is an important departure for the left in recognising affinity with very different forms of ‘anti-capitalism’, but, as the alter- globalisation movement has shown us, practices of neoliberal capitalist enclosure pose a threat to a variegated terrain of already existing collective forms of ownership and economic decision-making.

Older and even more conservative forms of cooperation and collective learning can be both learnt from and enrolled in constructing more democratic forms of economic practice.

At the core of my argument here is a sense that our ideas about ownership and control on the Left need to be radically rethought to be relevant to the changing global economy of the twenty-first century.

We need a new set of democratic structures to make the important economic decisions facing humanity in the years ahead.

Against the received wisdom in governing circles, I would argue that democratic public ownership is not only an increasingly urgent requirement in the years ahead but also, as the Danish experience shows, a practical possibility.

SCOTTISH LEFT REVIEW ISSUE 74

 

Comments
  • Annos February 24, 2013 at 11:29 pm

    “The politics behind the welfare myths”

    http://www.ekklesia.co.uk/node/17525

    • Mike Cleverley February 25, 2013 at 3:23 pm

      The original post in this thread is interesting. The author seems to think there has been no debate about how public ownership might be organised in the future. This underlines the fact that his own reading is strictly limited. The Socialist Party has consistently advocated the public ownership of the means of production on the basis of workers control involving consumers and community groups.

      In the past nationalisation was carried out on the principle used when slavery was abolished. Massive compensation of the owners and none for the victims. Leaders of the establishment got huge compensation for the loss of their property when slavery was abolished and political dynasties were founded on the proceeds which rule us today. When utilities were nationalised under the ’45-’51 Labour Government the same idea was followed and the nationalised industries were crippled by the loans taken out to pay off the old owners.

  • Jo Yelland February 25, 2013 at 9:07 am

    Similar to the Greens ideology of localism feeding into a larger, democratic economy but keeping the power primarily at the local level. It could do a great deal of good and can work but it’s costly to set up and people would prefer to keep the status quo (the idea that economic growth is the be all and end all, conveniently painting over the fact that it relies on ever increasing consumption and spending regardless of population size, growth, jobs available, jobs done and whether people need something or not).

    We need a seizmic shift in public understanding and willingness – which may only appear when there’s finally a large scale backlash against the government and the red top tabloid press.

  • Linda February 25, 2013 at 12:54 pm

    Very interesting Annos. Just today i read an article in the Daily Mail online about how you can claim DLA without any evidence. We know that, that is simply not true. How on earth do you counteract such lies.

  • Andrew Healey February 25, 2013 at 5:07 pm

    I know the following text has nothing to do with the above article, but I hope to pass on a little bit of info.. Please pass this on if possible

    The following was posted on my facebook by a friend of mine who is a journalist.

    The group Respect For the Unemployed & Benefit Claimants has banned me from adding comments and deleted my comment as well as other people’s – for suggesting that the group might get bad press from going after charities first in the war against workfare… In other words the group has been infiltrated by pro-workfare and is trying to kill itself off. Pass that on quickly if you know anyone else who is into that page like I was

  • GEOFF REYNOLDS February 25, 2013 at 10:02 pm

    How can any organisation that is not profit orientatated, be beaten on tender by a private contractor who seeks to make profits.
    The only way that this can ever happen is if figures have been distorted or insider dealing is prevalent. One or the other, or both.
    I challenge anyone to come up with one thing that has improved under the cloak of privatisation. Each and every privatised business has pushed prices up to the hilt.
    Greed the only motive………

    • JEFFREY February 28, 2013 at 2:41 am

      YOU ONLY HAVE TO SEE YOUR GAS BILL TO SEE THAT .. JEFF LPH ..

  • Justin Thyme February 26, 2013 at 9:38 am

    I can’t wait for labour to get in again and take the tory mantra even further … NOT
    This is the UK, alternatives are not permitted. What is needed is the throwing away of the royal family, removal of the state apparatus and its replacement with justice and freedom for all with a new constitution.

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