Yesterday I attended the Labour Party’s conference on Alternative Methods of Ownership in London. The idea can be traced back to a report which was produced before last year’s General Election, along with the manifesto it set out in broad strokes Labour’s thinking on public ownership and economic transformation. It should be noted that this isn’t Labour policy, but it does closely reflect the dominant thinking within the party and physical copies of the report were circulated at yesterday’s conference. There’s a pdf online here if you want to read it.
For me, the most important development in the report, and in yesterday’s conference, was an unblinking focus on industrial democracy. This is most clearly expressed in a critical approach to nationalisation. Taking key sectors of the economy into state hands does not by itself solve questions of ownership and control. Nationalisation and municipalisation are features of socialist economy, because in a rather loose sense if the people control the state, and the state controls the economy, then the people also control the economy. This of course applies more to socialist states than it does to capitalist ones, and there are plenty of examples where simply handing ownership to the state does not alter relations of production within the firm. After the Royal Bank of Scotland was nationalised, the management structure stayed the same, the bank continued to function just the same. What happened? Her Majesty’s Treasury became the majority shareholder, and it used its power as a shareholder to promote the long-term interests of capital. So, the radical element of Labour’s attitude is that it’s trying to think more critically about questions of ownership and control in the economy. This doesn’t preclude nationalisation, but nationalisation by itself is not enough.
McDonnell’s speech ran with this theme. Here he is talking about co-operative enterprise:
He went on Sky News before the conference, and again counterposed the old model of nationalised industries against Labour’s new proposals.
There’s a view among some in Labour that the centre of real change in the party is not Jeremy Corbyn in the leader’s office, it’s John McDonnell as Shadow Chancellor. McDonnell, the ‘first socialist in the tradition of the Labour Party.’ I remember reading in Labour Briefing shortly after Jeremy was first elected in 2015 that the unions were against selecting McDonnell. He was too divisive, too far out from the mainstream. Now he appears to have replaced Tom Watson as Jeremy’s second-in-command. I know Tom Watson still technically remains deputy leader, but he clearly doesn’t have the same relationship to Corbyn that McDonnell has.
There was a well-established institutional background reflected in the conference, I’m thinking primarily of the Institute for Workers Control, but also the Socialist Economic Bulletin and the Left Economics Advisory Panel. McDonnell himself was (and still is?) involved with the Left Economics Advisory Panel. These were organisations which existed on the fringe of the Labour Party, tirelessly generating research on what Labour policy could look like. The difference now is that their ideas are (quite literally) centre-stage, and are being discussed at a high level within the party.
It’s also difficult to ignore the parallels with Tony Benn’s ideas around industrial democracy. There’s a fantastic documentary about his time in government the 1970s which does well to explain his vision. Benn’s project is now deeply embedded within what Labour seeks to achieve. The historical context of the Alternative Economic Strategy also shares similarities with a post-Brexit Britain. If we assume Britain will experience a sharp period of crisis, a Corbyn-led Labour government will need to have some kind of plan ready. And if you want to understand the form that plan might take, it’s worth looking again at Tony Benn.
There are two potential pitfalls to the ‘New Economics’. The first is the problem faced by Scandanavian-style social democracy. This is where elected representatives of the workers get seats on company boards, they’re brought into management and consulted on company decisions. The danger in this scenario is that consultation falls short of real control, and ultimately the workforce has little tangible power. It is helpful, in that company executives are forced to listen to the workforce, but the company hierarchy remains unchanged. Call this the John Lewis model. If Labour’s plans are watered down, they could easily devolve into something which seems inclusive and radical, but which in reality amounts to little more than a listening exercise.
The second problem is that of co-operatives operating within a competitive market. This is where co-operatives are internally democratic and participatory, but workers remain subjected to capitalist market discipline through competition with other enterprises. I do understand the argument that the market is just ‘a method of controlling economic activity’, fine, but in a capitalist economy, markets control the economy at the service of capital. Workers can only determine their own conditions of production within the limits of market competition. This means that in a co-operative enterprise, workers are forced to exploit themselves in order to remain competitive. Britain has a healthy co-operative sector, and although it remains a column of ethical business, the mere existence of co-operatives does not by itself imply a socialist transformation. To paraphrase Spiros Sgouras of the Vio.Me Workers Union - ‘our aim is not to have workers self-management within capitalism but to extend it beyond capitalism, this is socialism.’
It’s partly because of these problems that there’s a certain tendency on the left which is wary of diffused public ownership. I’ve spoken to people who accept nothing less than nationalisation, because they see ‘public ownership’ as too vague or too fragile a concept. But again, I think that misses the varieties of different ownership models which Labour is trying to define. What works for a non-hierarchical co-operative of 20 employees will not apply to, say, a large power plant or a water utility company. The cheap answer to these problems is that the creation of a socialist economy is also a political project, one undertaken hand-in-hand with the state. Socialist construction would rely on the working class as the leading force in society, and this implies that ‘New Economics’ is viable only within the context of working class power. That’s why the arguments about inefficiency and redundancy within the public sector are almost irrelevant, because the central question is about power. Still, if anything the conference participants were quite happy to discuss the potential problems with Labour’s programme.
Jeremy Corbyn closed the conference with a speech, and it wasn’t great. Partly because I was wearing thermal underwear and the hall was too warm, and because Corbyn is sometimes… not a great speaker. There wasn’t much he could announce which hadn’t already been dissected down to the bone in the previous 6 hours. He nevertheless got a standing ovation at the end.
The last point on the conference, was one of the discussions around ‘platform co-ops and the digital era’. I liked this discussion. I really, really enjoyed it and it deserves a writeup all on its own. It started off with a few comments by Chi Onwurah (MP for Newcastle Central) around the question of US monopoly corporations in the computing sector. These corporations are difficult to regulate, and they actively resist attempts to hold them to account. Fairly standard complaints. Then she moved on to cloud computing and suggested the resources of the state could be put to use in creating socialised computing centres for individuals and businesses. Alright, that’s pretty innovative. Then someone from the IPPR started talking about the routinisation of cognitive work and where the returns from automation are distributed.
The panel of speakers just gradually circled up into all sorts of funky concepts, to the point where it peaked with Francesca Bria. She talked forthrightly about paying a universal basic income with local city or regional cryptocurrencies, digital democracy, issuing every citizen with a cryptographic identity, and making encryption a human right! The debate was right out of something you’d hear at a particularly edgy free software conference, not something I expected at a meeting on Labour Party economic policy. Automation/universal basic income/the gig economy/platform monopolies/etc. are important issues and I’m glad that Labour is genuinely interested in talking about them.