Labour's New Economics Conference: Part One, Introductory Session

The first part of our write-up and analysis of Labour's New Economics Conference on alternative models of ownership.

This is the first part of our write-up and analysis of Labour’s New Economics Conference on alternative models of ownership. The “Alternative Models of Ownership” report is available here, and our analysis of the report here.

Gareth Thomas

Thomas emphasised, in particular, John McDonnell’s long record of interest in the matters to be discussed, drawing on his role at the GLC, mentioning in particular his role in empowering of local communities to control their lives in the case of Coin Street. It’s crucial to note, despite the efforts to portray McDonnell as an Old Left dinosaur, his long, consistent record of support for and learning from social movement struggles, grassroots community organisations, including those outside the traditional working class-party relation and his openness to new ideas, social forces and modern democratic struggles.

John McDonnell

McDonnell argued that the movement had placed questions of economic ownership and, crucially, control back on the political agenda, but significant work remains to be done (and the movement is capable of this work) in developing ideas and implications. Here, and running through the conference, popular participation was stressed both in terms of policy formulation and in the capacity of a movement to generate and educate around alternative purposes.

McDonnell continued discussing two strands of what Labour in government will have to do. We would describe these as a politics of relief on the one hand and a long revolutionary transformation on the other (though at certain points, especially in the “Preston Model”, a politics of relief requires initiating policies with a long revolutionary horizon). The politics of relief describes a politics, discussed by McDonnell, of as rapid as possible repair of welfare, education and health through spending paid for by increased taxation on the highest incomes and corporations. This politics of relief is vital but, in a sense non-transformative, presuming broadly speaking, an unreformed economy except around tax and spend redistribution, it is also extremely vulnerable to capital’s class war from above resisting even a marginally increased tax burden. Corbynism’s long revolutionary politics, by contrast, is that root and branch radical transformation of the economy embodied in The Alternative Models of Ownership report and in the discussions at the conference. For Corbynism to achieve its potential both are vital and the potential risk of foregrounding the politics of relief and dragging Corbynism back into integration with existing society is perhaps the greatest, precisely because there are good, materially grounded reasons for this loss of longer, more radical horizon, threat to this potential.

Corresponding with the line of the argument suggesting the need for a politics of relief and a long revolutionary transition away from capitalism towards democratic control of the economy, McDonnell argued that the current economic model holds us back, not only in recessions and their wakes but in general- crisis is not a break from normal functioning of the system but the intensification of its general tendencies in such a way that it makes the system’s normal functioning legible. A politics of relief would correspond to attempts to address the crisis within the terms of the system’s functioning, a long revolutionary politics the transcendence of this normal functioning. For McDonnell, and even more centrally Corbyn in his closing address, a, probably the, most important aspect of the general functioning of the system is its exploitation of the environment and the malign consequences of this.

A further encouraging aspect of McDonnell’s speech was his grasp of the urgency of formulating plans to being the long revolutionary transformation coupled with not using this urgency as an alibi for authoritarian, top-down policy making in the name of efficiency. Urgency is not a question of leaving things to the (conventionally legitimated) experts but, largely, as a spur for more “fresh and challenging thinking from the movement”. There is, of course, some technical work to be carried out by these narrowly defined experts, and McDonnell pointed to John Trickett’s role in preparing for government. Central to Trickett’s work, with the collapse of Carillion a particular spur to work, is an investigation of what it would take to restore central government procurement capacity (there are analogous and perhaps harder to address questions with local government too). The current form of outsourcing entails both contracts being awarded on an extremely narrow set of criteria and companies like Carillion, Serco and Capita substituting for the procurement capacity that should be directly exercised by local and national government, as Grace Blakeley has argued, “merely act[ing] as arbiters between a Government that lacks the desire or capacity to do proper public procurement and the suppliers that end up doing the work, extracting millions from taxpayers in the process.” Insourcing would require a significant extension of civil service capacities.

However, much of the necessary and urgent development of policy ideas is much more participatory, involving a significant extension of what is recognised as expertise. This also involves the understanding that the 2017 manifesto is not as some within Corbynism or on the traditional (i.e. non-Blairite) Labour Right for whom the election result shows the viability of some left economic policies, the end point but only the beginning. As McDonnell argued, “deepening and developing our commitments requires detailed implementation plans” and we “need to hit the ground running when we come into government.” The participatory nature of these plans owes a great deal, and often this was explicitly acknowledged, to the popular planning tendency in the GLC and to Hilary Wainwright and Robin Murray’s work and the consequences to be drawn from the claim “workers are the real experts”, and for McDonnell, it is essential to learn from the everyday experience of those who really run industries, those who spend their lives in them.

Emphasising and mobilising popular capacities to run industries is not only a moral claim but one that is pragmatic both economically and politically. It is economically pragmatic precisely because the knowledge of workers (and also service users) will allow industries to be run more efficiently. It is worth noting here the very strong emphasis on efficiency but a different sort of efficiency to the narrow capitalist version in the tradition coming out of the GLC, one that emphasises the efficient satisfaction of needs and the inability of market mechanisms to do this, as the 1985 London Industrial Strategy begins (a document discussed by both Hilary Wainwright and Jeremy Corbyn), “when the history of Britain’s experiment with monetarism comes to be written, the contrast between unmet needs and vast human and financial waste will be the theme” 1- it should be clear the same could be said with British neoliberalism of whatever political stripe more widely. Alongside this economically pragmatic justification, popular participation also has a politically pragmatic justification, the long revolutionary or becoming hegemonic aspect involves the changes in forms of ownership becoming irreversible, and, as McDonnell argued everyone owning, everyone controlling, everyone taking an interest, will build the kinds of broad and where necessary intense popular support that will make the new forms of public ownership significantly less vulnerable to privatisation compared to the old nationalised industries where the lack of a democratic stake limited popular defence.

The critique, sometimes implied, sometimes explicit of the postwar nationalisations and the stress on the future oriented implications of welcoming in popular creativity force long revolutionary policies beyond nostalgia, beyond Tony Judt’s “social democracy of fear”, beyond “The Spirit of ‘45”, beyond treating 1979 as the fall and a return to pre-Thatcherite economic and welfare forms as the best than can be hoped for. Firstly, McDonnell insisted that the new alternative forms of ownership would extend far beyond those industries privatised by the Tories. More generally, against Corbynism as an Old Labour (whether of left or right) politics, McDonnell made central the New Left critique of 1945-79 and even more significantly its energies, attitudes and styles, to allow for the possibility of constructing something genuinely modern.

The rejection of 1945-79 as the limit of socialist ambition not only involves rethinking public ownership but at the very least an extension and modernisation of the post-’45 welfare settlement. UBI was mentioned in passing but it increasingly feels like (and this is welcome) it is no longer being considered as a viable, serious solution. Instead of UBI McDonnell emphasised Universal Basic Services, with the question posed, “why are the basic needs of life not free at the point of use?”. This free access to the necessities of life, moreover, was posed as an extension of the widely accepted principles of the NHS. Grace Blakeley has explored the notion of UBS for us, and it is clear that its superiority to both UBI and the current welfare settlement lies in the decommodification of the meeting of needs, and indeed, in the prioritising of the meeting of needs over the demands and forms of organisation of the market. Again, there is not only a moral claim here but an efficiency as with the contrast between the NHS and US healthcare, the likely far greater efficiency in meeting needs through collective provision. UBS even beyond the mean, affordability focused version of the UCL report, however, should only be seen as a minimum programme and one that cannot be detached from the wider transformation of economy to ensure the efficient, democratically controlled meeting of the most expansive understanding of need. Indeed, with what actually constitutes a need being understood as a major reformist, with potentially revolutionary implications, struggle under capitalism as with Marx’s “historical and moral element” of the value of labour power. Moreover, even an expansive, struggled for definition of need is insufficient, it is also necessary to insist on collective human development, as Raymond Williams wrote, describing the ethical, institutional culture and values of the working class,

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.2

Going beyond the post-1945 nationalisations, particularly their lack of democratic control, also entails a striking hegemonic move (and implicit at various points in the Alternative Models agenda are moves that aim at integrating people and arguments who might be thought of likely opponents). McDonnell, on the one hand, concedes an aspect of the right-wing critique (but only an aspect, quite rightly, for example, it was insisted that the nationalised industries were efficient on conventional terms) that both the welfare settlement and the nationalisations had bureaucratic and alienating features. This experience and argument, however, is polarised leftwards, not into a rejection of public ownership in favour of privatisation but into a much more radical argument that the lack of democracy was not a feature of socialism but a mark of a continued integration into the purposes of capitalism (these arguments were expanded usefully by Andrew Cumbers).

The point then of not repeating the postwar, top-down, integrated into capital’s patterns and structures, becomes the creation of an economy and social relations that express radically alternative purposes, where what is best both ethically and in thought of the movement is generalised across society as a whole. Strikingly, particularly for us, McDonnell quoted a passage from Raymond Williams’s The Long Revolution, which has been crucial for our understanding both of Corbynism’s potential and the risks of its incorporation into society’s existing purposes, for Williams, the organisations of the labour movement, particularly the Labour Party, the Trade Unions and Co-operatives rather than developing and embodying alternative purposes had experienced a moral decline (the argument is therefore significantly more pessimistic than the argument, above, from Culture and Society) grounded in them coming to be limited to a particularly place in society whereby, instead of

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…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.3

With only hints both from the actuality of the postwar settlement and the traditions of radical, decentralised socialism in the UK, the future is open, as McDonnell argued, “just because the old order is dying, it doesn’t mean we have an automatic right to remake things”. There are two vital aspects of this, firstly, we must prove our right to transform society, we cannot assume it in a top-down way, secondly we must build both a movement and a set of plans adequate to a social transformation that cannot be accomplished from above by a narrow elite. As McDonnell argued, unlike Thatcher, we cannot rely on lavishly funded think tanks, but we do have a movement, the centrality of the movement in developing plans is both right and necessary, and again the sense of expanded expertise, made practically effective by the movement is key. This process also entails, as McDonnell concluded, that we “lift the spirits of our people”, this, itself, is vital work to build the confidence and the capacity to force radical demands on the leadership to allow us to go beyond a piecemeal defence of what remains of the postwar settlement (i.e. the most limited possible version of the politics of relief), we need confidence and daring for the long revolutionary struggle.

Rebecca Long-Bailey

McDonnell’s speech was followed with a brief video message from Rebecca Long Bailey, in which she insisted, importantly, that wealth is created collectively and the real wealth creators are not capitalists (the wealth controllers) with ownership and control not reflecting the collective character of the activity which produces wealth.

Andrew Cumbers

Andrew Cumbers from Glasgow University then gave an exceptionally useful talk which overlapped with and developed a number of the themes in McDonnell’s speech. Cumbers again stressed the necessity of the collective character of work around alternative models- “a pooling of collective thoughts”. Significantly, too, Cumbers suggested that this work was in some ways 40 years too late.

It’s worth trying to unfold here the what doing this work now rather than forty years ago means. The New Left critique of the postwar settlement, powerfully developed, for example by Stuart Hall and Hilary Wainwright in the 1970s and already articulated by Raymond Williams in the early 1960s was in tense relation to an actually existing social democracy. Firstly, the New Left critique presupposed certain achievements of achieved social democracy whilst seeking, on the one hand, to challenge the racist, sexist, corporatist foundation of these achievements and the attendant limits on inclusion in those achievements and aiming at both a deepening and extending and a radical, democratic break.

Secondly, it’s necessary to contrast the degree of class struggle, including struggle internal to the working class against a limited, labour aristocratic definition, keeping the working class in a subordinate position and enforcing relations of subordination and exclusion within the working class itself. This struggle, one both about relations internal to the working class and external, to society as a whole, to the ruling class, produced assertive tendencies in trade unions and developments in social movements able to develop capacities for self-management and develop and empower alternative purposes. The situation now, after forty years of defeat, limiting the assertiveness of the working class, destroying non-market forms of ownership and control and impoverishing large sections of society is significantly less conducive to the development and empowering of alternative social purposes and to the movement necessary for a radical programme. Trade Unions, for example, are far more limited in their scope, accepting of their allotted social place and capacity to carry through radical projects of self-management than when Williams applied his critique in 1961. McDonnell’s conclusion on the importance of lifting spirits and going beyond demands for a mere politics of relief works on the consequences of these defeats.

Cumbers’s key question was “How do we get to a very different kind of public ownership- democratic public ownership?” Again, as with McDonnell, public ownership as state ownership was defended in some significant aspects with Cumbers presenting rebuttals useful for a movement that needs to make the case for public ownership across society. Cumbers noted that the claim private ownership is more efficient rests on false neoclassical models that presume full information for consumers and a situation of multiple competing firms, which is clearly impossible with many of the industries privatised since 1979. Cumbers also noted that many nationalised sectors were more efficient than foreign or private counterparts and where they faced problems of underinvestment this was by no means integral to public ownership, which in fact should make borrowing to invest cheaper than it is for private firms, but through government choices not to invest. Here too is the question of “political interference” as a criticism of public ownership, with Cumbers arguing that what political interference there was was largely elite interference of this sort and that the more general worry about “political interference” is an expression of fear at democratic, popular control instead of market mechanisms and elite control.

Alongside the rebuttal of arguments against public ownership, Cumbers made the positive case that both for reasons of efficiency in meeting needs and principles that there are large areas of life where the logic of the market should have no place, most notably social care and energy. Cumbers noted that carbon markets are incapable of delivering on climate change. This requires public ownership of energy for the necessary investment and planning. It is perhaps necessary, however, whilst acknowledging that energy is a crucial sector in causing climate change, to argue that capitalism in general, across sectors, beyond energy is destructive of the ecological conditions of life- as John Bellamy Foster puts it,

The accumulation of capital is at the same time accumulation of catastrophe, not only for a majority of the world’s people but living species generally. Hence, nothing is fairer — more just, more beautiful, and more necessary—today than the struggle to overthrow the regime of capital and to create a system of substantive equality and sustainable human development; a socialism for the twenty-first century.

However, again overlapping with McDonnell’s speech, whilst large parts of the right-wing critique of public ownership are invalid, Cumbers acknowledged the limitations of the postwar nationalisations: a lack of public engagement, whether with workers or citizens, the management of the nationalised firms remaining elite and distant (the point here is the management was about as elite and distant as the privately owned equivalents, bureaucratic elitism represents a failure to break with capitalism not a feature of socialism), a wider failure to embody and empower alternative values and all these tendencies can be put as a more general integration of the postwar nationalisations into a project of capitalist modernisation not a project of building economic democracy and a qualitatively different society. These limits on the postwar nationalisations, as Williams argues “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”, 4 are also limitations rooted in the limits of Labour as a Party and the Trade Unions. Williams’s argument on the moral decline of the labour movement (a decline that is rooted in tendencies that had always existed) and their acceptance of their existing place in society- the Labour Party becoming mere alternative state administrators and Trade Unions having a narrow, corporatist and economistic function is key. Cumbers pointed here to Labour’s perennial suspicion of syndicalist tendencies, though Benn would be an exception here (and the place of Benn and the Alternative Economic Strategy and the relation to union hierarchies was developed later by Wainwright).

By contrast to the limits of the postwar nationalisation, limits which are precisely not socialist, but limits coming from a failure to break with capitalism, what’s required is a “revitalised and democratic public ownership”. Cumbers defined the principles of this as: greater worker, consumer and citizen participation; the centrality of concern for the common good not private interests; as much local control as possible; redistribution; and embodying social and ecological values. As Cumbers argued these principles would go beyond merely repeating not only the 1945-79 settlement but also Scandinavian social democracy, going beyond a better incorporation of more of the working class into a better capitalism.

Cat Hobbs

The introductory session concluded with Cat Hobbs from We Own It. Hobbs argued that privatisation has always led to reduced accountability and worse and more expensive services. Hobbs, again mirroring McDonnell on the power of the movement and circumstances, particularly the collapse of Carillion, to force arguments onto the agenda, also argued that the argument had now shifted from whether nationalisation is a good idea to the practical question of how we do it. Hobbs made the important point, which again should be confidence building, that renationalisation is overwhelmingly popular and it’s widely acknowledged that particularly in the case of natural monopolies privatisation is an impediment to a good society. Hobbs then provided a litany of failings across private industries from water companies, noting particularly the environmental consequences of companies finding it easier and cheaper to pay fines for polluting than changing their behaviour (it’s important to note here that capitalism works by always trying to avoid paying its way, and this is particularly significant with dumping onto nature, what Jason W. Moore describes as “nature as a sink” 5), to railways, the Royal Mail energy companies, social care providers and buses.

  1. The London Industrial Strategy, (London, The GLC: 1985), p. vii. 

  2. Raymond Williams, Culture and Society, (Harmondsworth, Pelican: 1958), p. 312. 

  3. Raymond Williams, The Long Revolution, (Harmondsworth, Pelican: 1965), pp. 328-9. 

  4. Williams, The Long Revolution, p. 330. 

  5. Jason W. Moore, Capitalism in the Web of Life: Ecology and the Accumulation of Capital, (London: Verso, 2015).