Time for a grown up debate about public ownership

Photo of Citizen Energy Berlin

10 July 2014

Andrew Cumbers, Professor of Urban and Regional Political Economy at the University of Glasgow, makes the case for new forms of public ownership after the failures of privatisation. 

For the mainstream political classes, public ownership remains anathema. For New Labour types, nationalisation in particular is the political equivalent of the word “MacBeth” for the acting fraternity; words that cannot be spoken for fear they will bring bad luck or, more to the point, undermine their pro-business credentials. Suggestions by the Tories - and their pro-business friends in the media and the City of London - that nationalisation presages a return to the dark days of the 1970s lead Labour to beat a hasty retreat from raising any serious critique of how our economy is owned and controlled. 

The irony is that it is the UK’s political class that is out of step with the times. Public ownership is back on the public policy agenda in much of the rest of the world as the failures of three decades of privatisation become increasingly apparent. In Germany and France, but also in large swathes of Africa, Latin America and even the United States, new forms of public ownership at local, regional and national levels are being introduced that take whole sectors back into democratic control. Even the European Union’s commissioner for energy policy has recently suggested that if key strategic priorities around tackling climate change are going to be met, the electricity grid across the continent should be returned to public hands.

In the UK, of the London-based parties only the Greens have departed from the consensus that “free” markets (whatever that means in a corporate dominated global economy) and private ownership remain sacrosanct, with further privatisation cutting deep into the heart of the public realm in areas such as health and education. Yet even here, the state is being brought back in to correct for free market capitalism’s contradictions. We see this in the recent bank nationalisations following the financial crisis, but also in the rail and energy sectors where increased state subsidy and regulation and even ownership is brought “when markets fail” in order to allow privatised regimes to survive.

In a new paper published today for the think tank CLASS, I argue that to combat this we need to radically re-engage with the idea of public ownership. Not as an older top down form of nationalisation, or in the “socialism for the rich” bank nationalisations that followed the financial crisis. Instead, I offer a range of new forms of collective ownership that allow citizens, workers and consumer groups to have more decision-making power in our economy.

As the failings of privatisation and market deregulation policies create more inequalities and tensions in society, we need to develop new arguments and forms of public ownership to shape the progressive politics of the twenty first century. Paramount is the need to remind people why public ownership matters and why it remains stubbornly popular. 

In this regard, there are two compelling arguments for public ownership. The first is that those who own the means of production get to decide what is produced. Dealing with social inequality and environmental destruction needs far more than just progressive taxes. It needs common or public ownership of economic decision-making. With ownership resting in the hands of a few rich individuals, we are unlikely to find lasting solutions to the common problems facing humanity such as climate change. 

The second argument is a democratic one. The decreasing number of people who turn out to vote at elections is often taken as a sign of apathy, but it is more correctly viewed as disenchantment with ‘the system’ itself. What is the point of having a vote every five years if the most important decisions affecting your life on a day-to-day basis are taken without your participation? 

In the wake of the financial crisis there has been some creative thinking about how the banking sector might be transformed to more socially useful purposes with discussions of community banks, green banks, regional development banks and so on. Across the North Sea in Denmark, the country’s wind power revolution has been founded upon cooperative and municipal forms of ownership, with one in seven of the population having shares in a wind farm. There are numerous other interesting hybrid forms of collective ownership developing that offer alternatives to the creeping financialisation and corporatisation of our economy. A questioning of the rationale behind private ownership should not take us back to the monolithic state enterprises of yesteryear, but we should be open to the possibilities that new and diverse forms of public ownership offer to create a more equal and democratic economy and society.

Photo of Citizen Energy Berlin

Photo used under Creative Commons licensing, thanks to UweHiksch.

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Comments

Julie Watt replied on Permalink

I just hope Scotland votes Yes and then we're not in thrall to the capitalist nincompoops in Westminster.

Peter Davis replied on Permalink

No you won't hand over a large chunk of your coast to Donald Trump or allow a swedish capitalist to throw farmers off their land will you?

Jean Cole replied on Permalink

I'm for public ownership of utilities and transport - it's impossible to design a strategy for either without overall control

David Williams replied on Permalink

Armed forces' establishments and services, electricity generation, gas distribution, public transport, telephone and postal services, and water treatment have all been disastrous in private hands, and many of them have been allowed to be snaffled-up at ridiculously low prices (some to foreigners) while the private owners claim huge public subsidies. Now, as if the government has not learnt any lessons in the last 30 years, it is proposing to sell-off its pipeline and storage system, which supplies fuels to aerodromes. One must question how long the N.H.S. will remain in public hands too.

The common denominator of all these services is that they are national networks, strategic national assets in fact, which can never function in small private parcels, as is painfully obvious to all except MPs. The other common factor is that we the public owned these, paid for dearly with our own taxable wages, and they were just given away to greedy money-manufacturers.

Anonymous replied on Permalink

From comprehenivisation to the National Grid, I am beginning to believe monolithic isn't so bad. At least with public ownership plus freedom of information and legal challenge there can be real(ish) control and benefit from publically owned infrastructure. Private does not mean a lack of being monolithic. We have seen decades of concentration of ownership and power, for example, Google, the big five energy companies and supermarkets, SERCO, the big five accountants. KPMG now say they hold the history of the british civil service, they have been running it for so long. Capita run state pensions, council tax for over 50% of councils. Where do they pay tax?

Jen replied on Permalink

Todays news - Serco have decided to opt out of NHS procurement.

Hopefully more will follow when they realise it's not going to make them vast profits.

We want our money back from them, as well. They have messed up a few contracts as it is. We should not have to pay for their incompetence and greed.