Labour's Alternative Models of Ownership Report

Today Labour launch a report, Alternative Models of Ownership, commissioned by Shadow Chancellor John McDonnell and Shadow Secretary of State for Business and Industrial Strategy Rebecca Long-Bailey, that could mark a major milestone in the development of the Corbyn project and its ambitious attempt to re-make the British left. The report, authored by a group of theorists and practitioners at the cutting edge of ‘new economics’ thinking in the UK, potentially provides the basis for the most far-reaching, radical, yet practical, economic strategy to be argued for within the Labour Party in forty years. In a political landscape long characterised by triviality and a sullen lack of imagination, the authors of the report – as well as McDonnell and Long-Bailey – deserve enormous credit and have further demonstrated that it is the left that is producing the only serious, grown-up ideas for tackling our deepening social, economic, and ecological crises. The ideas contained in the report manage to be both justifiably pessimistic about the consequences of continued business-as-usual for the vast majority of people and for the environment, while also demonstrating powerful optimism regarding our capacity to change things for the better – for the many, not the few.

Our economy is clearly not working, and the report provides an indispensable analysis of why, situating present outcomes in fundamental structural flaws that flow directly (as the authors bravely and correctly argue in the very first paragraph of the executive summary) from

The predominance of private property ownership [which] has led to a lack of long-term investment and declining rates of productivity, undermined democracy, left regions of the country economically forgotten, and contributed to increasing levels of inequality and financial insecurity (p. 5).

In considerable detail, the report sets out the practicality and necessity of a shift to a variety of alternative forms of ownership and control of productive enterprises, including co-operatives, municipal and locally-led ownership forms, and finally – and most ambitiously – new democratic forms of national ownership. Ultimately, Alternative Models of Ownership is a remarkable document to be circulating at the highest levels of a major political party, combining a sober and plausible practicality with a profound radicalism in demanding a new socialist political economy that goes beyond nostalgia for a reheated, golden-age social democracy and instead amounts to

Nothing other than the creation of an economy which is fairer, more democratic, and more sustainable; that would overturn the hierarchies of power in our economy, placing those who create the real wealth in charge; that would end decades of under-investment and wasted potential by tearing down the vested interests that hold this country back (p. 32).

It’s worth noting too, that for all the undoubted radicalism of the report, there is no reason that these proposals can’t be massively popular with the general public. In a YouGov poll asking about issues of workplace power and authority, 66 per cent of respondents thought that running a business through collective decision-making rather than with a CEO was better compared to just 11 per cent who thought it was worse. Polling also suggests widespread public support for renationalising railways, water companies and other utilities as well as for having workers on company boards[1].

More generally, the report also contains certain policy themes that have not always been the preserve of the left – or at least of the left exclusively. Such themes include co-operatives, which formed a large part of the Big Society agenda; greater devolution of budgets to regions and councils, which superficially parallels both the “Northern Powerhouse” and the reason given for the support of some right-wing Labour council leaders for Liz Kendall’s 2015 leadership bid; a concern with automation and Unconditional Basic Income, which have interested figures like Tom Watson and Jonathan Reynolds; and a suspicion of how far states subject to the discipline of globalised capitalism can redistribute that underpinned Ed Miliband’s “predistribution” agenda[2]. This, however, points to a further strength of the report, which takes as its starting point the understanding that there are not piecemeal policy solutions to the condition of the UK economy but that radical changes in ownership are required. What this means, politically, is that such an agenda may be able to be bring along some of the more imaginative thinkers of the right, showing how their objectives can only be realised within a wider economic framework and set of values – of solidarity and cooperation – that break with private ownership and control. Within a piecemeal, technocratic framework, the values and relations of capitalism go unchallenged; within the framework of the Alternative Models of Ownership report, such fragmentary themes can be unified and made productive.

For New Socialist, Alternative Models of Ownership poses two questions. Firstly, does the general economic analysis hold, and can it and its policy implications be extended further? We believe that it does, although the attention to the international context is sometimes one-sided – the pressures exerted by international capital and the challenge it poses to any desire to return to technocratic social democracy are strongly developed, whilst the UK’s position as an imperial core country and the implications that flow from that are far less articulated. This inattention to UK’s imperial position poses problems of both an analytical and a moral-political nature. The second set of questions, which are far less discussed in the report require asking what political, social and cultural forces are required to develop and carry forward such a programme – and to struggle against the powerful interests, including within government institutions and the Labour Party, who would attempt to frustrate its development and realisation.

The Political Context

The Alternative Models of Ownership report is compatible with commitments and themes in Labour’s election manifesto and campaign, and fleshes out how these could be realised in practice. It also goes beyond the letter of the manifesto and points towards concrete implementation of the spirit of campaign materials like Labour’s recent “Labour stands with you” Party Political Broadcast addressing the insecurities of work and the UK’s uneven geographical development. It challenges these in the name of an economy that efficiently meets people’s needs, like the remarkable #WeDemand video, with its insistence that the satisfaction of needs is not to be “subject to grand profiteering” but “planned, transparent, executed in efficient fashion under democratic control using our intelligence and imagination” and the demand for “the full fruits of our labour.”

The most obvious policy significance relates to manifesto promises around nationalisation of utilities, with an emphasis on local accountability (pp. 19-20) but also on changing procurement rules so that wider public policy objectives are considered (p. 14. 30). The stress – particularly in the section on co-operatives – on the need for adequate funding that the current banking system will not provide, as well as on the investment needed to build an environmentally sound infrastructure, also links to and expands upon manifesto commitments for a national investment bank and “a network of regional development banks that unlike City of London firms will be dedicated to supporting inclusive growth in their communities” (p. 16). This is part of the more general campaign theme, strongly articulated in the report, around the deep geographical inequalities and spatial contradictions within the UK, primarily the concentration and capture of wealth in and by London and the South East, and within them by specific economic sectors. “Over the last 40 years,” the report argues, “inequality in Britain has increased dramatically across households and regions, with wealth becoming increasingly concentrated around landed property and finance, particularly in London and the South East” (p. 7). A key change in the campaign and manifesto, one expressed in slightly different terms by Corbyn and McDonnell, is the centrality of a radical notion of efficiency, understood not as allocative efficiency determined by market mechanisms but as the economy’s ability to satisfy human needs. There is also, crucially, an effort to expand upon what counts as a human need. This notion of efficiency is notable in McDonnell’s conclusion to the “Labour stands with you” broadcast – that “a fairer society is happier, more united, more efficient” – and in Corbyn’s regular criticisms of the inefficiency of a society which wastes so many people’s talents.

The broader political context of the report, however, goes beyond its compatibility with and extension of the 2017 election campaign, into the personal histories and experiences of key figures in the current leadership, most notably McDonnell as Deputy Leader and Chair of Finance of the Greater London Council (GLC), but also Corbyn and Abbott’s positions as key figures in the world of the 1980s London radical left. The question of both efficiency and human needs, as well as the possibility of translating a radical economic strategy intended for implementation on a national basis into a municipal context, with versions the Bennite Alternative Economic Strategy[3] imaginatively redeployed by various Labour councils, is an important background to the report, which refers to some of the policies of the GLC and Sheffield council in the 1980s.

Hilary Wainwright has offered an important theorising of the GLC experience in her account of “the economics of need” in Labour: A Tale of Two Parties. Wainwright’s conception of the economics of need emerged from “parts of local government, among some trade unionists, among socialist feminists and in socialist wings of the peace movement” to focus on “the purpose and social relations which could be achieved through social control of production”. It goes beyond Keynesian and social democratic forms of planning and efficiency to a radically different conception, involving “planning production on the basis of the full use of resources to meet social need. The distinctive new influence of recent social movements is to refine and expand the scope and diversity involved in the notion of need among workers and consumers”. Significantly, these notions of democratic planning went far beyond limited labourist considerations regarding the distribution of wealth or economistic and sectional trade union struggles for a greater wage within a particular firm to wider concerns over “principles for organising the economy: the principle of accumulation for private or at any rate unaccountable profit versus the belief in production for democratically decided need[4].”

For Wainwright, as for broader new left critiques of the postwar nationalisations, the persistence of essentially capitalist values, modes of organisation and objectives in the nationalised industries represented both a failing in socialist terms and a strategic disadvantage in undermining as public support for nationalisation and the welfare state – and for the Labour Party with which they were associated. As Raymond Williams argued, “in being dragged back to the processes of the old system, yet at the same time offered as witnesses of the new,” Britain’s nationalised industries, “so deeply damaged any alternative principle in the economy as to have emptied British socialism of any effective meaning[5], invites capitalist counter-moves (which are, as the report acknowledges, increasingly difficult to resist in a globalised economy), relies on technocratic lever-pulling by distant political authorities, and creates a bureaucratised and repressive welfare state.

In essence, the report returns to the fundamental left recognition, going back to Marx[6], but reanimated in the new left, that we must alter (socialise) the underlying economic relationships – i.e. the ownership and control of productive capital – in order to produce the outcomes we are seeking – equality, investment, community economic stability, ecological sustainability – as a matter of course. Considerations of the difficulties of sustaining the social democratic state’s capacity to redistribute under globalised capitalism have certain parallels with the Milibandite notion of “predistribution” and overlap a little with the fact that the tax changes proposed in this Labour manifesto, while extremely radical in the current situation, are historically very moderate. However, the predistributive measures prescribed by Miliband were extremely mild, reliant almost entirely on labour market interventions such as education and training to attempt to alter distributional outcomes. This report – and the general direction offered by Corbyn and McDonnell – is far more robust, pointing to real changes to the nature of the ownership and control of productive wealth as well as being comfortable with a far greater level of redistribution.

Labourist social democracy essentially accepted the capitalist split between the economy and politics. Even among Marxists, as Ellen Meiksins Wood has argued,

There has been a tendency to perpetuate the rigid conceptual separation of the ‘economic’ and the ‘political’ which has served capitalist ideology so well ever since the classical economists discovered the ‘economy’ in the abstract and began emptying capitalism of its social and political content[7].

This split also grounds the “economism” of large sections of the workers’ movement – the reduction, historically, of the struggle to particular workplaces – and is explicitly challenged in the emphasis on values rooted in class experience (but not only class, also women’s experience and that of members of Black and Minority Ethnic communities) over sectional conflict in the economics of need. The strong emphasis running through Alternative Models of Ownership undermines in many ways the same economistic split between politics and the economy, pushing back against the reduced scope of the sphere of democracy through privatisation. As the authors argue,

There is a commonplace implicit assumption in UK society that there is a natural separation between the political and economic realms, with democratic structures and processes only applying to the former. The economic realm, unlike the political realm, is deemed too complex and sensitive to be treated in the same way, and in consequence of the lack of democratic process, economic decisions are often made by, and on behalf of, a narrow elite, with scant consideration of the well-being of the general population. The process of privatisation has further increased the areas of society that are not subject to democratic decision-making (pp. 6-7).

However, certain problems of economism continue to haunt the report, particularly in the section on co-operatives.

Values and Politics

The centrality of the struggle to articulate and institutionalise new values and new patterns of social organisation for society and even the world as a whole by the labour movement in the struggle for socialism is most clearly set out by Raymond Williams in Culture and Society and in his refinement and qualification of his position in The Long Revolution[8]”.

For Williams, the “remarkable creative achievement” of the working class in Britain is in the generation and institutionalisation in the Labour Party, in trade unions and in co-operatives of the idea of

Society... as the positive means for all kinds of development, including individual development. Development and advantage are not individually but commonly interpreted. The provision of the means of life will alike in production and distribution be collective and mutual. Improvement is sought, not in the opportunity to escape from one’s class or to make a career but in the general and controlled advance of all[9].

The articulation and institutionalisation of new values is extended by Wainwright in the centrality she gives to social movements, especially the peace and feminist movement (and their intersections). In both Williams and Wainwright, moreover, these institutionalisations of value have a prefigurative character. For Williams, they are “the right basis for the whole organization of any good society in the future[10].” In The Long Revolution, however, Williams also suggests there has been a moral degradation in these institutions which is marked by the loss of the capacity to generate alternative values, rooted in the integration of these working class institutions into capitalist purposes and the limitation of their values to mere sections of society, which limited

The steady offering and discovery of ways of living that could be extended to the whole of society, which could quite reasonably be organised on the basis of collective democratic institutions and the substitution of co-operative equality for competition as the principle of social and economic policy[11].

This led to a situation where it was felt

The co-operatives should be simply trading organisations, the trade unions simply industrial organizations with no other interests, each union committing to its own sphere, and the Labour Party simply an alternative government in the present system—the country needs an effective opposition[12].

Wainwright in her argument over the development and municipal institutionalisation of an economics of need notes how the growth of nationalised industries in the postwar period and “the growth of relatively independent workplace trade union organisations and a dense network of movements and initiatives in the community among groups with diverse needs enabled us to imagine and take steps in another direction[13].”

Crucial to understanding the problems of today, as can be seen in the excellent recreation of the mid-1970s world of labour and industrial militancy as the backdrop to the Alternative Economic Strategy in John Medhurst’s That Option No Longer Exists, is the degree to which the generation of values and capacities is rooted in a radical labour movement and in other social movements. This is a question, firstly, of where the social power lies to demand of the government a transformed economy.A second concern is the development of capacities and values for the self-management of the economy rooted in communities and workplaces. Here we can recall the vital insights from Mike Cooley of the Lucas Aerospace Combine Shop Stewards’ Committee that “the workers are the experts” and of Valerie Wise from the GLC Women’s Committee that “women are the experts[14].” A major part of the task of socialists today, therefore, is the recreation, in a form appropriate to the 21st century, of new labour and associated institutions which will allow the generation of alternative values and popular capacities to carry forward the radical programme of co-operation and economic democracy envisioned in Alternative Models of Ownership.

The Diagnosis

It’s worth noting again the radicalism, bravery, and correctness of the claim that it is the predominance of private property that leads to the deep structural flaws in the UK economy that are destructive of economic strength and societal well-being. As the authors insist, these deep structural flaws cannot be resolvedpiecemeal or through technocratic policy fixes. Inequality, disinvestment, concentrated ownership, uneven geographical development—all these are neither accidental outcomes nor the sole result of policy aims (though under neoliberalism they were in line with the latter) but rather the natural consequence of the fundamental institutional design and relationships of the present system. The dominance of private property has a particular impact on regional inequalities (p. 7) and the environment. The likelihood, at present, that greater automation will not be realised (and that, if it does happen, that its consequences will be not be emancipatory but hellish) is determined by the intensified dominance of capital over labour (p. 7). A related set of problems stems from stagnant or even worsening productivity, with UK productivity previously comparable to that of other G7 economies from 2000-2005 but now 18 per cent lower than the average for the other G7 economies (p. 6). All these problems are interlinked and grounded in the necessarily short-term horizon of an economy organised in the interest of shareholder value, oriented to dividend payments and asset-stripping rather than useful investment (p. 6). By contrast, as the authors argue, both the workforce and other stakeholders, on the one hand, and the government, on the other, have interests in a longer-term productive horizon beyond the simple extraction of value (p. 6).

The limitations of the domination of private property and its necessary short-termism can be clearly seen when it comes to the value (in both the moral and financial sense) of future generations and nature when it comes to climate change. The report argues that private firms, through financial intermediaries, “weigh near-term outcomes too heavily” (p. 6) — a consequence of the prevailing economic system generally, but also something turbocharged by the emphasis on shareholder value of more recent decades. With particular reference to climate change, the disjuncture between what is sayable politically, and what is admitted even by orthodox economists is striking. While decisions regarding the appropriate discount rate—used to value future states of the world—are commonly presented as merely technical, they involve vital assumptions regarding matters of fact and matters of value. Even voices as moderate as Angus Deaton, Nobel Llaureate in Economics in 2015, attest, the determination of a socially optimal discount rate requires consideration of who is affected by a decision, and in what way they ought to be treated. While conventional economics would read these discount rates (at least in part) directly from bond markets, Deaton rightly draws attention to the manifold problems inherent in such a method—especially its failure to incorporate attention to the unborn, and bias towards the preferences of the rich compared to those of the poor (both within the United Kingdom and, perhaps more importantly, internationally). Deaton’s verdict is worth considering at length, incorporating many of the left’s criticisms of the market economy—even a market that comes as close to fulfilling the standard microeconomic assumptions as does that for government bonds:

Do we really think that saving rates, whether by individuals or governments, are the results of optimal intertemporal planning by individuals, even over their own lives, let alone over those of their unknown descendents who will live as far in the future as King George III and George Washington lived in the past? ... Whatever it is that is generating market behaviour, it is not the outcome of an infinitely lived and infinitely far-sighted representative agent whose market and moral behaviours are perfectly aligned, and who we can use as some sort of infallible guide to our own decisions and policies[15].

The implications of these questions are far-reaching. The particular failure to correct for the impact of current decisions on unborn generations when setting a discount rate will imply a rate that is higher than is socially optimal, and explains in large part the capitalist short-termism rightly decried by the report. While Deaton focuses on decisions made with regard to public policy, his conclusions are all the more pertinent when applied to decisions made by private, profit-maximising companies, facing borrowing rates greater than those implied by prices in government bond markets. The reintroduction of political and ethical questions into the choice of discount rate, possible only under different forms of ownership than that prevailing under capitalism, is of crucial importance in addressing the concerns raised by the authors of the report.

Finally, in the dominance of private property has intensified as a result of privatisation, narrowing the area of social activity that is subject to democratic power. Privatisation has also led to worse, and more unequal services. All of these problems create the need for new forms of ownership and this also demands attention (though this is mostly only signalled at in the report) to “social and cultural aspects of ownership models.”

Automation

The chapter on automation amounts to a serious consideration of vital questions, presented in a way that largely avoids technological determination (whether optimistic or pessimistic) and which grasps that the future will involve an intensification and development of present tendencies rather than a total break. Deterministic approaches (Tom Watson’s intervention has some of these features) tend to operate in a speculative and passive way that displaces political consideration from the problems of the present situation and treats automation as a given to be managed in the future, usually by benevolent state intervention, rather than something that can be shaped now by political interventions. Moreover, precisely, because the strength of the entire report, even if the predictions and arguments around automation do not hold, the wider arguments about different forms of ownership remain valid as they address both existing problems and potential future problems.

At some points, indeed, the argument around automation may be overstated, and the line taken here is certainly not the only possible interpretation of the facts. The report presents automation as both a promise—of material abundance and greater leisure—and a threat—of intensified economic inequality and mass unemployment (p. 8). It also argues that automation is not new, with the trend of decision making becoming increasingly independent of human control a process that has been unfolding for centuries. But a combination of various new technologies may mean the coming wave will be different, with both cognitive and physical, routine and non-routine work being subject to possible automation. An immediate concern here may be what happens to what is often described as affective work, and perhaps care work more generally, although care includes physical and cognitive aspects, the report pays only passing attention to this sort of work, with most discussion of care relegated to the appendices, and we would argue there is substantial need for alternative forms of ownership in care provision and, below, set out some arguments for these in the case of childcare. Up to this point the argument is potentially fairly standard and continues with itemising various possible consequences of automation under current relations of production and could fit with some of the more speculative, less immediately political treatments of automation that risk, as the Marxist intellectual and Vice-President of Bolivia Alvaro García Linera has argued, mystification in presenting “technology as the motor or halo that sets history into motion or slows it down[16].”

The report continues, more usefully, by arguing that the bigger immediate challenge is

Not the rise of the robots but that too many people will remain trapped in robotic drudgery-filled and low productivity jobs. In this context accelerating automation is a key political project. The goal should be to embrace the technological potential of modernity, accelerating into a more automated productive future with all its liberating possibilities while building new institutions around ownership, work, leisure and investment, where technological change is shaped by the common good. (p. 9)

There is, therefore, a significant difference between speculating about what benevolent forms of state intervention may be required in future to manage the effects of automation—treated as inevitable through the “natural” development of the productive forces—and centring interventions and new forms of ownership to make those developments possible.

However, even this stronger argument around the necessity of transformed social relations to shape the development of productive forces has potential problems, and these come largely from the tendency of the report to ignore Britain’s position as an imperial core country. It could be argued that we are actually living in a time of remarkably little innovation, and manufacturers have compensated for this by relocating key parts of the production process to the global south—those areas with large labour reserves and established infrastructure complexes and institutions, such as China, that enable the expansion of low-wage manufacturing at an extremely competitive cost. The Fourth Industrial revolution, for all the hype, never happened, and failed to make an impression in productivity statistics. As Gopal Balakrishnan notes

Rather than leading to any ‘New Economy’ in the productive base, the innovations of this period of capitalism have powered transformations in the Lebenswelt of diversion and sociability, an expansion of discount and luxury shopping, but above all a heroic age of what was until recently called ‘financial technology’. Internet and mobile phones, Walmart and Prada, Black–Scholes and subprime—such are the technological landmarks of the period...[17]

The point, therefore, is that policies to drive automation would have to be, on some level, global, with wage floors to encourage automation not restricted to the UK, as Srnicek and Williams argue in Inventing the Future. This poses a question of what political actors are to carry forward this policy and also whether even this would be sufficient[18]. There may, of course, post-Brexit be a set of policies to enable “on-shoring”, a considerably less globalised UK economy with more domestic production, for example, in green high-tech and self-provisioning, with higher wages, transformed patterns of ownership, and domestic multipliers created from fewer leakages, which may limit these relocations and the consequent limits on the development of the productive forces. However, if these policies were successful on these terms, there would still be a political-moral question about how far consequent UK prosperity was based on the exploitation of the resources and manufacturing labour of the Global South. Mariana Mazzucato (whose work underpins parts of Labour’s economic strategy and this report) argues, innovation has often been cultivated most successfully by state initiative, not market actors in the private sector, and any solution to the UK’s economic woes requires a greater role for the state in undertaking research and bearing risk burdens that the private sector is mostly unwilling to take. Just as the key role of the state has been essential for the developmental process of countries in the Global South such as South Korea, so the key role of the state in innovation in the advanced capitalist economies must be acknowledged as well.

However, as in Mazzucato’s example of the iPhone, a problem exists. The iPhone, as she demonstrates, was heavily dependent on U.S. government research—but is also dependent on global supply chains, particularly in China, for production and assembly. The bulk of value in the iPhone and similar manufactured goods is captured in the United States, and increasingly by an ever narrower minority, through tight control of intellectual property rights, strictly enforced investor protections, and monopolisation of design and marketing, but it is not created there[19]. There is a risk that, even within a high-tech, onshoring strategy, low-wage workers in Guangdong and Dhaka would continue to be exploited as the soft underbelly of Labour’s socialist future.

One possible position that could be developed to counter this is the commitment in the manifesto to “ensuring respect for human rights, workers’ rights and environmental sustainability in the operations of British businesses around the world … we will work to tighten the rules governing corporate accountability for abuses in global supply chains.” (p. 122-3). By itself, this provision would be a start, but in going beyond the national limit of the ethical it opens up these questions for politics. More generally, these ethical concerns could entail Labour being more radical on regulating patterns of trade and investment as they effect the Global South, which could involve debt relief, technology transfer, market access or development loans at favourable rates—all of which could have enormous beneficial effects. Britain maintains its imperialist position by acting as the world’s financier and clearing house, which plays a key role in producing and reproducing global inequality and uneven development[20]. Any British government that acted to alter this relationship would face enormous resistance from our ruling class. However, even if we face enormous constraints, there are still meaningful measures that can, and ought to be, taken in the here and now.

Co-operatives, or Can we go beyond Socialism in one Company?

There may be certain reservations on the left about co-operatives given their deployment as part of Cameron’s Big Society agenda or the use of a stress on “mutualisation” as a Trojan Horse for privatisation. The argument, however, in Alternative Models of Ownership is radically different, and co-operatives are presented not as the answer but as part of an answer within a whole set of radical changes including but not limited to legal changes and other forms of support to nurture the growth and ethical soundness of co-operative enterprises. The report is also deeply critical of certain forms of co-operatives, including Housing Associations, which are held to largely “behave like mainstream property developers.” (p. 36)

The central distinction to be made can be illuminated by returning to Raymond Williams, who argues that the contrast between the working class idea of socialism or co-operation and bourgeois individualism as well as being muddied by the imperialist position of England is also muddied by the development of the Victorian imperialist-bourgeois idea of “service”[21]. The notions around co-operatives developed in the report aim at developing values of socialism and co-operation, while the Big Society, with its recent denoument in John Lewis boss Andy Street being elected Mayor of the West Midlands, represents co-operatives within a value system of service. Put in more practical terms, there is an abstractly coherent idea of the Big Society in which co-operatives are part of the Burkean “little platoons”, but in reality this idea is incoherent, because—as the Alternative Models of Ownership report demonstrates—the nurturing of co-operatives requires considerable legal change and, almost definitely, requires the support of a world of labour and an expansive, large political party of the left to support it.

The report then breaks considerably from Big Society thinking in its grasp of what co-operatives can and can’t do, both within the current framework and more generally. The biggest limiting factor regarding co-operatives is investment. In terms of static production, co-operatives tend to be equally or marginally more productive than privately owned and controlled firms. However, co-operatives often struggle to attract investment, with financial institutions reluctant to lend to firms over which they would have little control, and this limits investment in technology and therefore improvements in dynamic production, making them vulnerable to acquisition by private firms (p. 12-13). The report advocates the need for shelter organisations, which could be supportive trading organisations or bank-type institutions like the Caja Laboral Popular, which was key to the development of the famous Mondragón complex in the Basque country in the funding and promotion of its co-operatives. There are also legal reforms that could help sustain co-operatives in the UK, for example the Italian Marcora law that a significant portion of profits be paid into a reserve that cannot be accessed by members or investors and is donated to other co-operative activity. This both partially relieves capital funding problems and makes private acquisition less attractive (p. 15). There could also be significant changes to procurement regulations to help support co-operatives, which would be compatible with and extend the manifesto commitments. Moreover, as with various radical left councils in the 1980s, notably Sheffield and the GLC, there are many things that Labour local authorities could do to support the growth of co-operatives (p. 19).

There are considerable opportunities for nurturing co-operatives in the UK today, while Brexit will also allow for changes to procurement law and the introduction of a law similar to the one in Italy that was eventually struck down by the EU. There is also a huge opportunity, though with a limited time-window, in the form of the “silver tsunami” retirement of the baby-boomer generation of business owners, which could see the transfer of ownership of many of these companies to their employees rather than their being wound down or acquired and then asset-stripped by hedge funds. Despite the modern cooperative movement originating in Rochdale, the UK has a comparatively small co-op sector and would benefit from its growth in terms of employment creation and densification of local economies. The document rightly notes the problems with attracting finance, and the need for more supportive legislation and regulation.

The report is exceptionally strong on the problems co-operatives face and the potential legal changes that would improve their viability. However, certain problems remain in terms of the relation between the co-operative and the rest of the economy, with co-operatives still subject to the capitalist law of value even with all the necessary support detailed above. Firstly, significant regulation of wages and conditions in privately owned firms remains absolutely necessary, not only for the sake of their workers but so that they do not undercut co-operatives. Secondly, a set of questions exists around relations to workers external to the co-operative even if they work for the company and whether successful co-operatives inevitably produce a class of worker-capitalists. A notable UK case of this is the struggle of John Lewis cleaners against their exclusion from being partners and the resultant exploitation[22]. This can also apply on a global scale, as with Mondragón. The report mentions, to prove the efficiency of co-operative enterprises, Mondragón’s 73 overseas plants, but it doesn’t address the implications of this for the ethics and politics of the model (p. 16).

Erik Olin Wright has described how the pressures of globalised capitalism, in the form of the Fagor Elian subsidiary co-operative’s need to maintain its relations with Volkswagen, led to the setting up of a Brazilian manufacturing plant. The workers in the Brazilian plant are not members of the Mondragón co-operative. This exploitation by Spanish members of Brazilian workers may represent an ethical degeneration of the co-operative ideal, but it is not autonomous as it is rooted in globalised capitalism. Olin Wright therefore argues that

The leadership of MCC believes that, given market pressures linked to globalization, this strategy of national and global expansion is necessary for the survival of the Mondragón cooperatives in the 21st century. Whether or not this diagnosis is correct is a matter of considerable controversy, but in any case the result of this expansion is to intensify the capitalist dimension of the Mondragón economic hybrid [and the non-inclusion of many workers in the co-operative produces] a global configuration of economic and class relations within the conglomerate structure of the Mondragón cooperatives [which] is in deep tension with its cooperativist principles[23].

So far three possible resolutions to the problem of the non-inclusion of Brazilian workers have been discussed and rejected—firstly, the inclusion of Brazilian workers into Mondragón itself; secondly, the conversion of the Brazilian plants into autonomous co-operatives, linked federatively to Mondragón; and thirdly, “to actively encourage the formation of strong unions and other forms of worker empowerment within the subsidiary firms, including such things as the works councils and worker co-determination.” In the absence of any of these measures, the Brazilian subsidiaries were still, at the time Olin Wright was writing, “run pretty much like a conventional capitalist firm[23:1].” There may also be a question of political consciousness—though again, this is perhaps best seen as an expression of economism or sectional interest, as in the U.S. plywood co-operatives discussed in the report whose worker-owners, as studies found, were often deeply conservative.

The question of the values of worker-owners beyond the firm itself, however, may be partially resolved by considering what would be required to nurture co-operatives. In this way, the means to build co-operatives serve the ends of expanding the ethical realm over the whole of society, the limitation of which Williams regretted so much in The Long Revolution. Firstly, the reliance on new policies which could only come from socialist activity either on a local or national level would have its role in reforming consciousness. Secondly, as Williams roots the values of co-operation in the whole of the creative achievement of working class culture, or if we consider to central role of the Italian Communist Party in supporting co-operatives, their development probably requires not only a socialist Labour local or central government but a powerful world of labour to institutionalise values and quite possibly provide funding and direction. This again would support the integration of new co-operatives into a socialist system of values. The role for the institutions of the world of labour also points to a task for local government even if we are not in power nationally, and even for grassroots Labour members it may be possible for us to launch co-operative means of satisfying human needs, which would demonstrate the practicality of our values and create new associational political forms.

Integrated into a world of labour and a set of practical socialist values, co-operatives could plausibly be launched and nurtured and potential problems of the limitation of their values challenged. Despite existing within a sea of competitive market production, subject to the law of value just as much as any other capitalist firm, the left needs to focus on questions of culture and socialisation every bit as much as questions of economic control and planning. Co-operatives are one way of achieving that. Much as some may scoff at it, values of co-operation and solidarity are just as important in sustaining a socialist society as state ownership. The basic premise of scientific socialism is that it arises out of potentialities emerging from within actually existing capitalist society, these are not just technological but include features that are cultural in the broadest sense, embracing values and capabilities; and we should also take seriously the internationalisation of the economy and the world market of recent decades. There are no easy national solutions to the problem of capitalism, but there are better and worse ways of governing the market and greater opportunities are made possible by advances that precede them. And what better way to spend our time than cultivating values of empathy, co-operation and charity?

Municipal & Locally-Led Ownership

While councils can support co-operatives (and, in the 1980s, did substantially), and this could be made easier by changes to procurement regulations, including those outlined in the Labour manifesto, the potential role for councils within a landscape of alternative forms of ownership is not limited to just this. Alternative Models of Ownership is also excellent and indispensable, and without question, should Labour fail to win on Thursday, has the most potential for being useful in the struggles to come. If there is a criticism of the co-operatives section it is that it perhaps overstates what they can do and how far appropriate legal and financial support could liberate them from operating within the totality of capitalist relations and market discipline. If there’s a criticism to be made of the municipal and locally-led ownership section, it would be the opposite—that perhaps what councils can do is understated, particularly in challenging exclusions and inequalities based on gender and race.

As in every section of the report, the starting definitions are extremely clear and rigorous, and the precision of the definitions will be extremely valuable in providing a solid foundation for further research and discussion. It is worth quoting the definitions offered of municipal ownership: “Municipal ownership (that is, ownership by a town or district’s governing body) refers to municipal control and operation of property, services, and systems.” And also that of locally-led ownership:

Locally-led ownership refers to the encouragement of local involvement in the decision making of business entities operating within the region, with consequent focus from these entities in the progression of the local community … Locally-led ownership is not necessarily as simple as ownership in the physical sense. More to the point, the term indicates that the economy in an area is not ‘owned’ by corporate interests, but rather it is ‘owned’ by the local community. As such, it refers to the localisation of economic control. (p. 20)

Municipal (or sewer) socialism has, of course, been a major part of the Labour tradition, and there were Labour councils long before the first Labour government at Westminster. However, what is crucial in the report, which goes back to the experience of the GLC and other radical left councils in the 1980s, is the role of democratic rather than bureaucratic local control. This emphasis on democracy is not just an end, not just a good in itself, but part of the means of bringing in and sustaining support for municipal socialism. This argument was made quite explicitly by Ken Livingstone and John McDonnell in the 1980s and is expanded on by Wainwright. For Livingstone, in the 1981 GLC manifesto, “there was nothing that a good social democrat couldn’t do on a warm day.” As Wainwright continues, the manifesto, “was essentially a programme of modernisation and Fabian-style intervention.” However, going beyond the limits of a Herbert Morrison or mildly redistributive Municipal Fabianism were the radically democratic means, “what turned out to be revolutionary, at least in spirit, was the way that the GLC opened its buildings, its funds, its research and—very much more selectively—its decision-making process to some of the most radical and needy sections of society[24].”

Crucially, the necessity of democratic openness was not just morally correct but a vitally political part of the project, a way to bring in and sustain support, particularly in the context of the very rapid recomposition of the London working class, a recomposition which disrupted various traditional mediations between the working class and the Labour Party, meaning the Party could no longer take mass working-class support for granted and instead had to prove its usefulness. These processes of recomposition and their political consequences, are now, of course, much more generalised. Wainwright quotes Livingstone again to the effect that “we haven’t got a God-given right to demand that people accept that we are somehow a good thing. We’ve got to prove it. We’ve got to prove our goodwill and integrity to the groups that have looked to us in the past and decided we didn’t have any.” Wainwright again expands on this, “In London, perhaps more than anywhere else, such proof was near enough a condition for the GLC’s success. The party’s traditional, organised working-class support base had collapsed more rapidly than anywhere else in the country[25].”

Successful forms of municipal and locally-led ownership have obvious advantages, as detailed in Alternative Models of Ownership, as

The localisation of economic activities and control serves to strengthen economic resilience and to enhance the democratic nature of decision making. By being more closely managed, the economy can be geared in such a way as to place a priority for the well-being of its constituents above a devout commitment to the interests of private corporations. Concerning municipal ownership, as has been stated above, it is evident that service provision for communities was worsened in private hands, and that government ownership would improve community experience of service-use. (pp. 20-1)

Moreover—and here again there are parallels with the redeployment and transformation of the AES by radical left councils in the 1980s—there can be a role for local government in innovation. Mazzucato’s Entrepreneurial State is municipalised in such a strategy, and it is possible that in its municipalisation, certain problems rooted in the international division of labour and the capture of wealth by imperial core countries are sidestepped. As the report argues,

The history of economic development has taught us that the state has always played an active and essential role in achieving prosperous economic activity and increased well-being … This same economic logic applies to local development. If a given town or region wants to ensure economic well-being it requires a) that economic activity continues to function well, and b) that the benefits of economic activities are shared amongst all members of society; and to achieve these requires active involvement from local government. Municipal and local-led ownership, by entrusting local government and local communities with more power, gives communities the opportunity to shape and secure their economic future, and to avoid parts of a given country being economically forgotten. (p. 21)

This begins to outline a role for councils in challenging the deep, structurally rooted geographical inequalities and the UK’s uneven geographical development, which usefully supplements and extends themes from the manifesto and campaign.

There are two sets of questions here. Firstly, what policies from central government would support these kinds of strategies? And secondly, what can be done by Labour councils now, without national policy change, on a municipal basis? We are beginning to learn that city governments need not be as powerless as they seem when faced with footloose capital. Their own economic footprint and associated spending (by institutions stewarding public funds) is sufficiently large that, used more intentionally, it could stabilise local economies on the basis of sticky capital and anchored jobs. This in turn would reduce corporate leverage and restore the capacity for real democratic local economic decision-making. Here, Alternative Models of Ownership offers an extensive discussion of the Preston model, in which, “in response to the difficulties in securing inward investment, Preston and Lancashire have embarked on a pioneering experiment in democratic local economy, looking to replicate the “entrepreneurial state”—as described by Mariana Mazzucato—at the local level.” (p. 24-5) There is little point in our summarising this, we would urge people to look at and study this further[26].

In response to the Preston Model, an urgent political question arises. What would it take to see more Labour councils adopting these sorts of innovative policies and strategies and shaping them in response to local circumstances, needs and demands? Momentum, having largely failed to engage with Labour in local government, could clearly be taking a lead on this. Firstly—and this is something New Socialist will be undertaking in the near future—there is a need for further research and dissemination of new and existing research throughout our movement, and for discussions locally about how these lessons could be applied in order to formulate demands on councillors. Secondly, there may need to be a clearing out of some of our less imaginative Labour councillors who are a barrier to innovation, democracy, and attention to popular needs. This is not, absolutely, a left/right question—in many ways there is no reason an imaginative local councillor whose political opinions are right-wing on a national level would not support and be able to contribute to these proposals. Conservative support for the development of the Hampshire Community Bank, for example, is testament to this.

It is, as we have said, a potential strength in building a political bloc that concerns and themes that are not exclusively the preserve of the left are articulated so strongly in Alternative Models of Ownership—but also articulated in such a way that it is clear that they can only be fully developed within a radical reworking of values and social relations.

Something that is perhaps missed in the discussion, and that was a central aspect of the GLC as well as Sheffield and Manchester councils in the 1980s, is that—as Wainwright argues—the councils used municipal budgets and support for enterprises, including but not limited to co-operatives, both to resource the most needy and radical sectors of society (often working class women and Black and Minority Ethnic communities) and to make radical versions of equal opportunities policies a central part of council spending and procurement[27]. There is considerable potential for radical councils to address inequalities of gender and race in their activities whether through provision of responsive, democratically controlled services or through support for women’s or Black and Ethnic Minority enterprises or co-operatives.

On the other hand, Alternative Models of Ownership poses questions of what policies a future Labour government could enact to support and extend municipal and locally-led ownership. Here it is clear, again, that certain themes that have been treated with suspicion by the left—in part because, within the context of existing relations, their consequences would almost certainly be malign—need to be re-considered, but within a context of radical potentialities. The most notable of these is some devolution of budgets to local government. In the current context, these demands from, for example, the leading London councillors writing in support of Liz Kendall would both strengthen geographical inequalities, with London keeping more of “its” money, and perhaps involve a pass-the-parcel of dodging responsibility for austerity, with central government able to blame the local governments deciding on how to share out the pain, and local government able to blame central government for budget cuts. A Corbyn Labour government, however, should be brave in following through on decentralisation (along with proper resourcing) despite the risks. The UK remains one of the most highly centralised states in Europe, despite Scottish and Welsh devolution. Instead of slick neoliberal executive mayors we should be looking to participatory local and regional budgeting and to local authorities as laboratories for experimentation in building a new economy. There may also be an opportunity around the allocation of funding to replace EU development funds, developing participatory forms to decide on how this money is allocated locally. It has been suggested, for example in areas of Wales that were the recipients of significant EU development funding but voted strongly for Brexit, that an important factor was the poor use made of this money and the complete lack of democratic local control over it[28].

Alternative Ownership of Childcare: A Possible Extension

Alternative Models of Ownership, touches, briefly, on some questions around care, although until the discussion in the appendix of Italian multistakeholder co-operatives in care services the development of these ideas is scant. We would argue, drawing partially on the development of locally-led childcare provision by radical left councils in the 1980s, most notably in Manchester, that a strong case can be made for exploring alternative forms of ownership and systems of localised democratic control in childcare.

“Before the late 1990s the English Early Years system had three distinct elements: public education, public childcare for the disadvantaged and private and voluntary provision of various types.” [29] These elements chime with three policy strands, education, early intervention and childcare, that, even after the late 1990s, have interacted in various ways in the provision of early years services.

These three strands of early years policy came together, briefly, under the last Labour government, when Sure Start Centres were transformed into Children’s Centres from 2004. Originally, targeted services in the most deprived areas offering outreach and home visiting, parenting support, play and learning opportunities, healthcare and advice, and support for parents and children with special needs; they were expanded to “each community” [30] in England, providing integrated early education and childcare. The best Centres (and as the roll out continued, Centres were allocated less and less money, providing a thinner service in general [31]) combined the services of the early Sure Starts – integrated, multi-agency teams; personalised outreach workers; a welcoming and non-threatening environment; and co-location of services [32], with universal access, which, has been shown to be key to improving outcomes for poorer children. [33] This coincided with the development of an integrated curriculum – the 2007 Early Years Foundation Stage Framework imposed a single regulatory and quality framework on all providers specifying learning and development objectives with regular inspections by OFSTED, as well as a universal entitlement to part-time early education for three and four year olds. [34]

However, despite being of higher quality [35], the Labour government continued to offer this type of integrated publicly maintained provision as part of a wider mixed childcare market, in which favourable terms were in fact given to the private and voluntary sector. The 2006 Childcare Act stipulated that, while local authorities in England had a duty to ensure sufficient childcare places for all those children whose parents wanted them, they should not directly provide the places unless no private or voluntary sector organisation was willing to do so [36]. This preferential treatment created an environment which allowed the Coalition government to take public provision out of the childcare market altogether by, in 2011, removing the requirement for Children’s Centres in the most disadvantaged 30% of areas to provide access to childcare and early education and refocusing provision on “those who are suffering the greatest disadvantage”. [37] This attack on the universal provision of Sure Start services for young children and their families led to a pulling apart of the strands of early years provision. While publicly supportive of Sure Start and the social welfare strand that it had been returned to delivering, by reformulating state funding to end the more generous subsidy for maintained settings [38] and shifting spending away in general from targeted subsidy towards employer vouchers [39] (yet requiring a higher level of service to a needier population), the Coalition were essentially pulling the financial rug from under them. With the final phase of the roll out of Children’s Centres having only ended in 2010, their dismantling began soon after, with a third having been lost since then.[40]

This left the private sector to take over the delivery of the other two strands of early years, education and care, with the 2006 Childcare Act having removed any legal distinction between them. [41] However, the market mechanism through which this dual responsibility is now mainly delivered has increasingly led to weakening the educative element of nursery provision rather than enhancing the learning experience of childcare. This is because, run according to a market logic, due to the high cost of care provision, and inability to force productivity increases through technology, there is a downward pressure on costs and quality, an analogous point is made with regard to the procurement of health and care services in Alternative Models of Ownership (p. 44). Not only does this mean a poorly paid and qualified childcare workforce, but also an increasing tendency for monopolies from the cost saving of repeating and combining organisational features. This has lead to the childcare market being increasingly dominated by larger chains of for-profit companies, some of which are listed on the stock market. [42]

Through increased lobbying by the childcare industry, the government have introduced a series of deregulatory reforms including the deprofessionalisation of staff, the relaxation of space requirements including access to an outdoor space, removing the local authority role in supporting quality improvements, and ‘slimming down’ the Early Years Foundation Stage curriculum, and making the Early Years Foundation Stage Profile optional. There were proposals to reduce the rations of staff to two year old children from 4:1 to 6:1, but they were dropped due to political pressure. [43] Because the state subsidy is also not seen to cover the real costs of provision, requiring the need to cross-subsidise from working parents paying for wrap-around care, poorer children who only use their free entitlement are discriminated against in allocation of places. This leads to worse outcomes for them, and an increasing likelihood that they will not be able to take up their entitlement in practice, as children requiring extra provision are prioritised [44], with only a third of councils predicting they will have enough places this September. [45]

The current Conservative government have, by making their promised extensions to (what was) the universal entitlement for early years only available to children of working parents, shown, at the very least, that they are not interested in all children receiving early childhood education. Labour have, on the other hand, promised that their wider extensions to the entitlement will be universal and that they will increase the number of childcare places. [46] They have also made a commitment to give £500 million to help reopen many of the Sure Start Centres that have closed. [47] However, it is, at present, unclear how the two policies relate and whether Labour will maintain public provision as targeted ‘early intervention’ while ceding universal education and care to the private sector, allowing continued downward pressure on costs to weaken ever further the quality of provision. Maintaining early intervention as targeted provision also has the potential to pathologise social problems in the ‘poor family’ rather than in the wider capitalist structuring of society [48], although, given the context of the wider measures in Labour’s manifesto, this is less likely than the last Labour administration. Even so, it segregates, and potentially stigmatises, families who use it, when not only has universalism been shown to be a beneficial strategy to children’s outcomes [49], but also, not embracing universalism prevents useful services from being used in general by everyone.

What is more, this policy strand of ‘early or family intervention’, once reformulated, can be a potential corrective to the pathologising thrust of the other two. ‘Childcare’ often utilises services for the sake of maternal employment, whilst ‘education’ is child-centred to the point of ignoring parental contributions to learning (or seeing them as inadequate or even harmful). Both policy rationales approach early years services in an unholistic, utilitarian way. While having childcare to allow mothers to work is often an economic necessity, and providing educative opportunities in settings with other children and experienced adults can also be a social good; it is provision that has the family and the community at its core that, if universal, can be potentially transformative of social relations in the family and between the family and the state. Of course, the family must not be something to be ‘intervened’ in, but, instead, control the services that they enjoy within the wider community. As Silvia Federici writes,

It is one thing to set up a day care center the way we want it, and then demand that the State pay for it. It is quite another thing to deliver our children to the State to control them not for five but for fifteen hours a day…In one case we regain some control over our lives, in the other we extend the State’s control over us. [50]

Although much has since been undone, what is left from the last Labour government’s legacy on early years are the buildings, ‘one in each community’. Alternative models of ownership could help rebuild and refashion the early years provision that takes place in them. Cooperatives of parents could involve paying parents directly to deliver services together or for one another (Federici observes how “welfare mothers, for example, denounced the absurdity of the government policy that recognizes childcare as work only when it involves the children of others” [51]), as well as parents employing childcare professionals. Parents can take democratic control of their services so that they do not necessarily need to be excluded from wider community care of their children, and they do not necessarily have high quality care for their children just to go to work.

National Ownership

The final part of the discussion of alternative forms of ownership, and perhaps the strongest section of all, is on national public ownership. What is essential here is the unabashed support for forms of national ownership:

While it is possible and desirable from the point of view of creating more democratic forms of ownership to encourage decentralisation, local and regional models of ownership, public ownership through national state level institutions remain important for economic and social policy. This is particularly the case where the government wishes to secure important public policy objectives, such as combating climate change, modernising infrastructure or providing ‘patient capital’ for the development of particular economic sectors. National level forms of public ownership that are capable of providing an overall strategic compass can work alongside public and collective forms of ownership at lower geographical scales (p. 27).

At the same time, the report is forthright in advocating for more democratic forms of control. The particular way in which the argument for democratic control is made is critical: firstly, the insistence that even the bureaucratic forms of national ownership of the postwar period were no more unwieldy and subject to capture by vested interests (in fact, probably less so) than large capitalist firms (p. 27); and secondly, the argument that a lack of democratic control caused the postwar nationalisations (and the post-GFC bank nationalisations) to become subservient to the needs of private capital rather than a realm of public activity embodying of socialist values (p. 29). Here the argument parallels Ralph Miliband, in Parliamentary Socialism, that the postwar nationalisations were “to achieve the sole purpose of improving the efficiency of a capitalist economy” and “government interference in economic affairs though in some aspects irksome to private industry and finance, presented no significant challenge to the power of men who continued to control the country’s economic resources[52].”

The report posits new models of national ownership that are more democratic than the Morrisonian top-down public corporation model of the post-war nationalizations, and Corbyn and McDonnell have already indicated their desire to see more pluralistic, democratic ownership forms[53]. Having listed the various reasons and sectors where national ownership is absolute necessary, the authors argue that

There remain several critical reasons for state ownership in an economy. First, in those sectors that are ‘natural monopolies’, because the technical conditions of the sector mean that it is impossible to have more than one supplier (e.g. railways, electricity, water), a private supplier will be able to extract monopoly rents against the broader common good. This is the case in many of the utility sectors today, despite government attempts at regulation and price control. Second, in areas that require significant capital investment with long horizons to realise any return on investment, private capital is often unwilling to invest unless it can be given guaranteed returns. As mentioned in Section 1, capital markets are infamously short-termist, preferring sectors that produce high returns at low risk. Private firms therefore often require massive guaranteed subsidies or government underpinning of market activities. The best recent example of this is the UK Government’s Private Finance Initiative, initially envisaged as public infrastructure investments where the private sector would supply the capital and absorb the risk. (p. 28)

A third critical argument for national state ownership is providing equality of service for customers.

Under privatised systems, poorer customers and rural areas often face either higher prices or a diminished service compared to higher income groups and those in larger urban areas where profit margins are much higher. The paucity of internet and telecoms provision in much of the UK, compared to other countries is testimony to the inequalities produced by a profit oriented system that does not invest sufficiently in national service provision. Providing a nationalised state owned service in such circumstances is more equitable. (p. 28)

The authors also argue, significantly, that national ownership is in many ways a modern necessity, much more able to deliver desirable social outcomes than other elements of the left’s traditional arsenal, especially those focused not on the organisation, function, and experience of production but on distribution, while “the growth of a more open, dynamic global economy and powerful financial markets does serve to constrain some traditional forms of national economic policy, national level state intervention is likely to become more, rather than less important.” (p. 28)

The report details cases of widespread national ownership and its achievements, most significantly Norwegian state oil and the density of nationalisation in Austria from 1945 to the late 1980s (pp. 29-31). With the case of Norway there is a particular sense of going back to the 1970s, not in the sense of a nostalgia for what happened, but a melancholy in the face of what might have been had Labour been re-elected on an AES-type programme allowing the development of North Sea Oil for the use and benefit of the whole of society rather than its exploitation within a Thatcherite context[54]. Instead, of course, Labour campaigned timidly, not offering a left resolution to the contradictions in British society, and offering no prospect of disalienating the bureaucratic institutions of the welfare state and nationalised firms, and leaving space for their right-wing resolution. As Hall remarks,

One of the most astonishing signs of the reversal in the 1979 election was to hear Mr Callaghan complain that the radical Right meant to tear the old system up by the roots. And we had been foolish enough to imagine that tearing society up by the roots was what socialism was about![55]

The Norwegian experience is doubly important for understanding socialism. On the one hand, there is the Norwegian insistence that nationalisation was about creating a “qualitatively better society” (p. 30) with the goals of the nationalised firm set by wider society, not just in Parliament, but through general democratic public discussion. Socialism is about a transformed world, different, better systems of values and production organised based on these, not about a marginally better distribution of money within the existing system, which necessarily leads to a technocratic, alien form of the state. Secondly, however, these new values need to be rooted in the present situation and in what is imagined as possible. There is a constant contradiction to reconcile and work on here. The Norwegian example, and the more general evidence that alternative forms of ownership exist and are normal in many parts of the world can help us work on changing what is deemed possible, as can the opportunity to argue for practical plans, as the report does so well. The UK is actually an extreme outlier, even compared to the United States, on privatization. 40 per cent of the total value of assets privatized across the OECD between 1980 and 1996 were in the UK. The privatized industries represent a massive rip-off and everyone knows it.

Looking Ahead

The recommendations found in the final section of the main body of the report are useful, but are largely directed at what McDonnell and Long-Bailey can do in response to the report. We should also explore what the labour movement can do in response to the report. This section includes a brave, valuable definition of socialism, stating,

We have shown, in simple, practical terms, how a government committed to addressing [the UK’s] profound, structural problems could implement key policies that would rectify them. Its goal would be nothing other than the creation of an economy which is fairer, more democratic, and more sustainable; that would overturn the hierarchies of power in our economy, placing those who create the real wealth in charge; that would end decades of under-investment and wasted potential by tearing down the vested interests that hold this country back The historic name for that society is socialism, and this is Labour’s goal. (p. 32)

In terms of what party members, trade unionists and members of social movements could do, firstly, there is a contribution to be made in the analysis of sectors in which they are workers and consumers and whether and how alternative models of ownership could operate—remembering once again that“the workers are the experts”, “women are the experts”. Here, though, it is also worth noting the vital role of experts, whether professional experts or worker, consumer, service user or community experts, external to both the Labour bureaucracy and, were Labour to come into government, potentially the civil service. (In the case of the latter group, as Benn observed with his proposals in government and their frustration by civil servants, “I don’t think anyone can beat them... the civil service is defending the class interests of owners and professional people[56]”. For all the sobriety and practical reasonableness of the proposals in the report, it is easy to see how they would be frustrated in their formulation and implementation. This does not giving up on them but requires determination to build the power, both intellectually and organisationally, to meet this challenge.

Other questions are part of a whole wider discussion to be addressed by New Socialist in the coming months, around how we rebuild the world of labour, or the culture of the working class that is necessary for any form of institutionalisation of such a programme, whether politically or in producing the values of solidarity and co-operation, as well as in the training and capacity building to develop the skills that are required in the management of production. This involves not only challenging local councils but beginning to establish co-operative forms within the party, based on solidarity and that can meet popular needs. As Wainwright argues, this would represent a significant challenge to the existing, often fossilised forms of representative democracy in the party, “the democracy the women’s movement places a high value on the social and economic organisations, formal and informal, created by women to press their needs directly without council and parliamentary mediation[57].” The Labour Party is not the only point at which the movement needs to be transformed and put to etterb to better use in order to realise the programme set out in the report. There needs to be pressure and an investigation of union and perhaps Momentum resources, both financial and organisational, to help us develop appropriate forms. Credit Unions run by UNITE and the PCS, for example, are already part of the Preston model (p. 25). Once again, there is again a question of how needs can be met directly and how this relates to local council provision.

Ultimately, Alternative Models of Ownership is an astonishing and in many ways—precisely because of its sober practicality—an inspiring document. Within the wider context of Labour’s engaging and inspiring election manifesto and campaign and the arrival of new ideas and forces in the party with the Corbyn leadership, this thoughtful and empowering report could (and should) become the starting point for formulating and enacting a transformative, radically democratic and egalitarian economic programme rivalled in our history only by the Alternative Economic Strategy that guided our movement in the period immediately before the onset of neoliberalism. It is only fitting that these ideas, reformulated and repurposed for a new time and new challenges, should re-surface just as they are needed, as the long dark night of neoliberalism draws to a close.


Photo: Diliff


  1. See Companies without CEOs; Working better without a boss; Taxing robots, YouGov, February 2017 and Majority support for rail nationalisation – but also policies from the 'radical' right, YouGov, August 2015. ↩︎

  2. See, David Cameron’s Big Society Speech, George Osborne on the Northern Powerhouse, Letter from various mayors of London boroughs and council leaders in support of Liz Kendall, Tom Watson on automation and industrial strategy, Jonathan Reynolds on UBI and Ed Miliband on predistribution. ↩︎

  3. For an excellent treatment of both the Alternative Economic Strategy and the wider world associated with it see John Medhurst, That Option No Longer Exists, Alresford, Zero, 2014. ↩︎

  4. Hilary Wainwright, A Tale of Two Parties, London, Hogarth, 1987, p. 255. ↩︎

  5. Raymond Williams, The Long Revolution, Harmondsworth, Pelican, 1965, p. 330. ↩︎

  6. See, most succinctly, "The Critique of the Gotha Programme" and the argument that, "vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution." ↩︎

  7. Ellen Meiksins Wood, Democracy Against Capitalism: Renewing Historical Materialism, London, Verso, 2016, p. 19. ↩︎

  8. Raymond Williams, Culture and Society, Harmondsworth, Pelican, pp. 312-4. Williams, The Long Revolution, 328-30. ↩︎

  9. Williams, Culture and Society, p. 312. ↩︎

  10. Wiliams, The Long Revolution, p. 328. ↩︎

  11. Williams, The Long Revolution, p. 328. ↩︎

  12. Williams, The Long Revolution, p. 329. ↩︎

  13. Wainwright, A Tale of Two Parties, p. 257. ↩︎

  14. Quoted in Wainwright, A Tale of Two Parties, p. 100. ↩︎

  15. Stern, Sir Nicholas, On transatlantic vices, or Stern in America. ↩︎

  16. Alvaro García Linera, Plebeian Power, Chicago, Haymarket, 2014, p.33. ↩︎

  17. Gopal Balakrishnan, “Speculations of the Stationary State”, New Left Review 59, 2009. ↩︎

  18. Nick Srnicek and Alex Williams, Inventing the Future: Postcapitalism and A World without Work, London: Verso, 2015. For the limits of the demands for global wage floors as a means of accelerating automation see Jason Smith, "Nowhere to Go: Automation, Then and Now": part 1 and part 2. ↩︎

  19. Mariana Mazzucato, The Entrepreneurial State: Debunking Public vs. Private Sector Myths, London, Anthem Press, 2013 and for the critique, Lucia Pradella, “The Entrepreneurial State by Mariana Mazzucato: A Critical Engagement”, Competition and Change, 2016. ↩︎

  20. See Tony Norfield for an excellent overview. ↩︎

  21. Williams, Culture and Society, p. 312. ↩︎

  22. John Lewis Protest: bring the Cleaners into the partnership!, UVW Union, September 2016. ↩︎

  23. Erik Olin Wright, Envisioning Real Utopias, London, Verso, 2010, pp. 170-3. ↩︎ ↩︎

  24. Wainwright, A Tale of Two Parties, p. 97. ↩︎

  25. Wainwright, A Tale of Two Parties, p. 105. ↩︎

  26. For further analysis of the Preston Model see also Clifford Singer, The Preston Model, The Next System Project, September 2016 and Matthew Brown and Martin O’Neill, The Road to Socialism is the A59: The Preston Model, Renewal, 2016. ↩︎

  27. Wainwright, A Tale of Two Parties, pp. 94-124. ↩︎

  28. On Wales, Brexit and EU funding see the excellent Desolation Radio podcast. ↩︎

  29. Jo Blanden, Kirstine Hansen and Sandra McNally, Quality in Early Years Settings and Children’s School Achievement, Centre for Economic Performance Discussion Paper No 1468, February 2017, p. 6. ↩︎

  30. 3500, one for roughly every 800 children under 4, see Kitty Stewart, Labour’s Record on the Under Fives: Policy, Spending and Outcomes 1997 – 2010, Working Paper 4, Social Policy in a Cold Climate, July 2013, LSE and CASE, p. 24. ↩︎

  31. Stewart, Labour’s Record on the Under Fives, pp. 25-6. ↩︎

  32. House of Commons, 2010. Sure Start Children’s Centres: Fifth Report of Session 2009-10. ↩︎

  33. LSE, Do poorer children receive lower quality childcare?, September 2013. ↩︎

  34. Stewart, Labour’s Record on the Under Fives, pp. 33-4. ↩︎

  35. LSE, Do poorer children receive lower quality childcare?, September 2013. ↩︎

  36. Stewart, Labour’s Record on the Under Fives, pp. 32-3. ↩︎

  37. David Cameron, 11 August 2010. ↩︎

  38. Kitty Stewart and Polina Obolenskaya, The Coalition’s Record on the Under Fives: Policy, Spending and Outcomes 2010-2015, Working Paper 12, Social Policy in a Cold Climate, January 2015, LSE and CASE, p. 17. ↩︎

  39. Stewart and Obolenskaya, The Coalition’s Record on the Under Fives, p. 22. ↩︎

  40. A third of Sure Start children’s centres in England lost, says Labour, The Guardian, April 2017. ↩︎

  41. Stewart, Labour’s Record on the Under Fives, p. 33. ↩︎

  42. Eva Lloyd, Early childhood education and care policy in England under the Coalition Government, London Review of Education, Volume 13, Number 2, September 2015, Cass School of Education and Communities, University of East London, pp. 2-3. ↩︎

  43. Lloyd, Early childhood education and care policy, p. 149. ↩︎

  44. LSE, Do poorer children receive lower quality childcare? ↩︎

  45. Angela Rayner, While The Tories Restrict Childcare To Cut Costs, Labour Will Build A Truly Universal Childcare System, Huffington Post, May 2017. ↩︎

  46. Angela Rayner, While The Tories Restrict Childcare To Cut Costs, Labour Will Build A Truly Universal Childcare System, Huffington Post, May 2017. ↩︎

  47. Angela Rayner, Labour will boost Sure Start services that changed my life, The Guardian, June 2017. ↩︎

  48. See Diane Elson, The Economic, the Political and the Domestic: Businesses, States and Households in the Organisation of Production, New Political Economy, Vol. 3, No. 2, 1998. ↩︎

  49. LSE, Do poorer children receive lower quality childcare? ↩︎

  50. Silvia Federici, Revolution at Point Zero: Housework, Reproduction and Feminist Struggle, Oakland, PM Press, p. 21. ↩︎

  51. Federici, Revolution at Point Zero, p. 43. ↩︎

  52. Miliband, Parliamentary Socialism, p. 289, 291. ↩︎

  53. For an example of possible forms of democratic national ownership see Paul Salveson of the Hannah Mitchell Foundation’s Railpolitik: Bringing Railways Back to the Community, Lawrence & Wishart, London, 2013. ↩︎

  54. Medhurst, That Option No Longer Exists, pp. 2-3. ↩︎

  55. Stuart Hall, Faith, Hope or Clarity, in Marxism Today, 1985, pp. 16-7. ↩︎

  56. Medhurst, That Option No Longer Exists, p. 101. ↩︎

  57. Wainwright, A Tale of Two Parties, p. 166. ↩︎


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