Re-Imagining Public Ownership

Scottish Policy Jan 15, 2013 1 Comment

The next issue of the Scottish Left Review is out on Thursday. Here we post a preview of an article by Andy Cumbers on developing a case for public ownership in Scotland.

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.

One Response to “Re-Imagining Public Ownership”

  1. Duncan says:

    This is an important starting point for a real discussion about alternative forms of public and community ownership. Too many on the left happily parrot out nationalisation as a solution to all ills despite the negative experiences of the UK nationalised industries. Did centralised state control give workers a say in decision-making? Were consumers involved in any way?
    The one size fits all model of public ownership through state netionalisation will not work and is not a desirable option. We need to examine alternatives such as those noted in the article and other forms of multi-stakeholder cooperatives which could bring workers and consumers together as partners in determining service provision in for example the rail industry. Here’s a link to a wee piece I wrote on cooperative developments in Scotland which may be of some interest – https://network23.org/dundeeanarchists/2012/10/16/cooperative-developments/

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