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We need more public ownership, but it must be democratic & decentralised

In-Public-HandsAlmost every day brings fresh demands for public ownership, whether over energy infrastructure or transport (rail and water systems), banking, housing, pensions, let alone reversal of privatisation and outsourcing in health and education. That is certainly needed, but not a reversion to the Morrisonian brand of State corporatism.

Instead it needs to be democratic and decentralised, involving not only the workforce but the participation of the public and civil society. At present, under the current market fundamentalist regime, real economic power is increasingly concentrated in very few hands. An elite of CEOs and top executives decide how companies operate, what strategies they choose, what markets they operate in or products they make, and how these are made and where.

A key nexus of financial and political elites in the Treasury and City of London determine the setting of interest rates, levels of government investment and debt, and decisions about gilt and bond markets, and so on. The workers, the public and the wider society are simply shut out. Yet democracy isn’t just about electoral politics, it is about the accountability of power wherever it is exercised, and above all that includes the economy.

The Thatcher counter-revolution to Labour’s post-war nationalisation was the concept of a property-owning democracy, the planks of which were the sale of council housing and the privatisation of the utilities leading to the dissemination of share ownership. It had the opposite effect – a massive shift away from individual shareholding towards corporations and multinational capital. Individuals owned 53% of shares in 1963, but just 10% in 2012. Foreign ownership of shares rose from 7% to 53% over the same period. Today shareholder value trumps all public interest considerations, and we have the perverse irony of foreign State-owned corporations actually using profits generated in the UK’s privatised utilities to bolster public services at home.

Abroad the push-back against privatisation is gathering pace. Since 2000, 86 cities around the world have taken back their water systems from privatised contractors, including in the US, Paris and Berlin. Over 100 electricity distribution networks have come back under local public ownership and 44 new municipal energy companies have been established in the past decade. The key driver has been the determination of public authorities around the world to bring core services and infrastructure under their control after decades of poor performance, rising prices, and and failure to invest to modernise utility networks.

It has become clear that markets and private ownership are no more defenders of democracy and liberty than Soviet-style central planning. Labour should be championing municipal ownership, consumer co-operatives, community trust companies, worker-owned enterprises, strong worker representation in the boardroom, as well as national planning and management where that is needed (transport, communications, banking regulation, environmental protection, etc.).

2 Comments

  1. David Pavett says:

    A general call for decentralisation, as in this piece by Michael Meacher, is not very helpful. Sometimes decentralisation is desirable and sometimes it isn’t – it depends on what is being considered. Also “centralised” is not a synonym for “undemocratic”, that depends on the nature of the political system. The degree of democracy in that system will clearly reflect in its decisions. Most of us would agree that there are infrastructural issues which need to be decided at a national level. We want the Health Service and the railways to have a national steer.

    Then, of course, there are complex mixes of national and local when we deal with issues like education. Most of us want a national framework, included finance, decided at national level (which should not be equated with being decided by government) but we also want local implementation through local government. Beyond that we want decisions that are best taken by individual schools to be devolved down to them. So its a very complex picture and a generalised call for decentralisation clouds the issues rather than clarifies them.

    And lets not dismiss central planning just because we can stick the words “Soviet-style” in front of it to make the pejorative phrase “Soviet-style central planning”. What about non Soviet-style central planning i.e. democratic central planning which engages the imagination and participation of large numbers of people at many different levels?

    Above all the left should reject the small is beautiful type of judgement. Sometimes small is beautiful and sometimes it isn’t. Sometimes large-scale is beautiful too. In all cases we should judge by the facts of the matter and not by generalised rhetoric.

  2. David Ellis says:

    Well decentralised or not it certainly needs to be democratic. We must replace the fat cat executives imposed by absentee shareholders, political patronage and the Old School Tie Network that treat UKplc as their own personal trough with managers and leaders elected by the workforce. Democracy should not end at the factory gate or the office turnstyle. But we do not need to wait for some mythical government to enact such a policy. Workers in every industry, government dept, council, school, hospital, factory, office should establish committees of all grades that can challenge for management and argue for social ownership. Occupy, organise, kick out the parasites.

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