You can't control what you don't own

If there's one lesson of the banking crisis and bailouts of 2007-09, it's that 'you can't control what you don't own'.

Today the government implores the banks to lend more to businesses and to constrain executive bonuses, but to little avail. Perhaps the irony is that we do still own large stakes in several banks. Indeed if it were not for the various guarantee schemes that underpinned UK banking, we would have ended up owning most of them as they fell like dominoes. However, the ownership model devised was arms-length, temporary, and was in reality the privatisation of public money rather than the nationalisation of private assets (or liabilities).

The New Labour government had introduced the market further into areas such as welfare, education and health, had part-privatised the London Underground, and more of the civil service than the governments of Thatcher and Major combined. But here it was facing the possibility that its golden child - the finance sector - was about to collapse.

In 2007, what struck LEAP was the lack of debate about public ownership. What really sent the message home clearly for me was this press release from Unite, the union that represents Northern Rock staff, from 20 November 2007. It sets out a six point 'Charter for Northern Rock' the sixth point is "To retain Northern Rock as a UK listed company".

I don't use this example to in anyway demean Unite, but simply to highlight how little issues of ownership and control were being discussed and debated in the labour movement.


Today, Southern Cross - which owns 753 care homes across the UK - remains on the verge of collapse. The 2011 GMB Congress asked 'If private equity and the private sector are places fit for the care of our elderly, our most vulnerable and our most dependant?' Indeed.

A new debate is starting up about media ownership in the wake of the News of the World hacking scandal. With energy and supermarket prices both rising above inflation to enable gratuitous profiteering, the demand for public ownership should be made.

Earlier this week it was also revealed that Virgin Trains received £40 million in public subsidy, and paid out nearly £35 million in dividends. The case for rail re-nationalisation is overwhelming.

It therefore seems an opportune time to publish free online for the first time LEAP's 2008 publication Building the new common sense: Social ownership for the 21st century (you can buy a hard copy here).

The pamphlet looks at different forms of public ownership from the Morrisonian post-war model to workers' co-operatives.

Download chapter by chapter

• Preface by Andrew Fisher
• The Case for Industrial and Economic Democracy by Gregor Gall
• Why we need a culture of social ownership by Rosamund Stock
• The economic case for worker-owned co-operatives by Jerry Jones
• Telecommunications of the future under public ownership by Maria Exall & Gary Heather
• Rail privatisation - a failed experiment by Bob Crow
• The Growing Case for Social Ownership by Gerry Gold
• The Campaign for Social Ownership in the 21st century by John McDonnell MP

Democracy and Capitalism

A flagrant re-post from the Roe Valley Socialist blog:

I was recently reading over an excellent pamphlet published by the Left Economics Advisory Panel, a panel of economists linked to the Labour Representation Committee. The pamphlet, 'Building the new common sense: Social Ownership for the 21st century' discusses in a series of chapters the complete lack of democracy in the workplace and the disparity between the power of capital and labour.

As the pamphlet points out, citizens spend a significant period of time in their workplaces but leave their democratic rights at the door in the morning. When it comes to making serious strategic decisions about the direction of a company, decisions which could considerably affect conditions at work and even the direction of peoples' whole lives, workers are at the mercy of the tyranny of capital. Some firms obviously have a consultation process with their workforce but this is limited in the extreme; missing are the powers for workers to initiate reforms themselves, the ability to work outside an agenda already been determined by management, and the means to effectively challenge decisions short of industrial action.

Obviously, this comes down to the nature of private ownership of the means of production. Why, ask liberals, should workers have any say in what is in effect someone else's property; why, ask social democrats, should property owners wield such unaccountable power over the great majority of the population in a so-called democratic state; why, ask socialists, should production be in private hands in the first place, as private property is the foundation of this unbalance in democratic entitlements.

Beyond the micro-economics of the individual firm, the problem runs much deeper than this of course. The outcome of the next General Election might just be made by the currency markets rather than the electorate, if a Labour victory or a hung parliament is portrayed in the media to threaten the value of sterling. It might also be decided in marginal constituencies where the Tory tax-dodger and Belize-based businessman, Michael Ashcroft, is providing the cash for glossy leaflets and phonecall canvassing. On Newsnight on Tuesday, Justin Rowlatt followed a financial speculator who saw it as his rule to dictate to the Greek government how they should solve their fiscal crisis. His solutions were predictable- massive cuts and attacks on the standard of living of the Greek people. We can argue over whether this is necessary or not to ensure the survival of the Greek economy or not under capitalism but the boundaries of the debate are severely proscribed by the actions of those short-selling Greek debt. Unelected speculators have set the agenda for democratic governments; in a democracy it should be the other way around.

On an even deeper level this poses a fundamental challenge to reformist socialism. It was once the case that the state had strict controls over its currency; now, this control is shared with the financial markets who can decide to destroy any government they don't like the look of. Within the EU, fiscal policy is subject to numerous limitations, and nationalisation is technically subject to the dictates of competition law. In other words, there are great barriers to state intervention in the economic life of the country, especially when capitalism is not in crisis and capitalists resist such intervention politically through their support for neoliberalism.

Socialists must develop realistic and workable models to force democracy into the economic realm- through workers' co-operatives, trades unions and genuine democratic organs of the people. Otherwise, without redressing this balance between those who work and those who own, the latter will successfully resist any reforms which fundamentally risk the rule of capital. We saw it at Copenhagen where states came under pressure from entrenched economic interests, and during the bailout of the financial system where it was done on the banks' own terms despite their culpability in the precipitation of the economic crisis. It is a simple question of democracy and one which needs serious answers.

Capitalism Isn't Working - Building the New Common Sense

Building the New Common Sense – Social Ownership for the 21st Century is the pamphlet published by LEAP last September. Thanks to many LEAP supporters we have sold enough copies to break even. Unlike the capitalist banks, we break even, haven't relied on dodgy loans or Government bailouts and are reinvesting the (very) small surplus in our forthcoming conference.

In the preface to Building the New Common Sense, I wrote:

"This pamphlet is the start of a debate and of a campaign to put the question of ownership back on the industrial and political agenda. As the UK faces recession and as job losses and business failures continue to rise, this question could not be more timely."

In the concluding contribution to the pamphlet, John McDonnell MP, LEAP Chair, wrote:

"Now is the time . . . to reinvigorate a debate about a new role for social ownership in the 21st century. This pamphlet is designed to stimulate a debate among trade unionists and all those who want a stake in their community. From this debate, we need to take forward a campaign for a worker controlled economy, accountable to our communities, into our union branches and conferences, into our workplaces, and through the TUC, and eventually even Parliament."

Since then workers have occupied workplaces at Waterford Crystal and currently at Visteon. We are hoping to have a worker from the Visteon occupation at the LEAP conference 'Capitalism Isn't Working' which takes place next Saturday, 25th April. The conference will also include a workshop entitled 'Resisting the Recession: the industrial agenda' led by Professor Gregor Gall and Jerry Jones (both contributors to Building the New Common Sense).

If you are interested in continuing the debate and building a campaign for workers' control and in solidarity with those workers taking action, I hope you will attend and participate in the conference.

Events and Opportunities

Last night was a night of events and opportunities. LEAP hosted a meeting in the House of Commons, based around our publication Building the New Common Sense - social ownership for the 21st century. Speakers at the meeting 'The Economic Crisis - what role for social ownership?' included many of the contributors to the pamphlet: Gerry Gold, Rosamund Stock, Maria Exall and Professor Gregor Gall.

There was an excellent debate about the role of social ownership in the crisis - and a poignant warning from Gregor Gall, "an opportunity is only an opportunity if we have the resources to act. Otherwise it is just an event". While the crisis brings capitalism into sharp relief, and gives us the opportunity to explain its inherent weaknesses, the opportunity to change things relies on us mobilising around these issues and that requires resources.

One contributor to the pamphlet who could not make the meeting was LEAP Chair John McDonnell MP. John was locked in the House of Commons chamber attempting to convince a Labour government to repeal a few technical measures of Thatcher's anti-trade union laws. The amendments to the Employment Bill were derived from the Trade Union Freedom Bill which was passed as both TUC and Labour Party conference policy in 2005.


John forced the largest rebellion - 45 Labour MPs - since Gordon Brown became Prime Minister, but it also showed that even with every union in support and most actively campaigning in favour only 45 MPs from the party of Labour support strengthening trade union rights.

Over the pond, and the US was electing a Democrat President to great fanfare. This was an event - with great opportunities. However, it remains to be seen whether reality will match expectations.


LEAP's own Graham Turner said: "'Change We Need' was the popular slogan of the Obama campaign, and while it would be churlish to ignore the wider political significance of yesterday's election, there is a harsh reality. Unless the Democrats execute a major policy U-turn, there will be no change. A more expansionary fiscal policy, courtesy of a stronger grip on Congress, will not solve the crisis. It may make it worse. Paul Volcker is tipped by some to be the new Treasury Secretary, but that too provides real cause for concern. It is more of the same, ensuring that the US will slide towards a debt trap. Other candidates in the frame, including Lawrence Summers, offer little encouragement. Democrat policies to date have been contributing to the rise in mortgage rates, which has culminated in a plunge in mortgage demand. The point was underlined this morning by the steep decline in the MBA's purchase index to just 260.9, its lowest level since early January 2001. There is no chance of stabilising the housing market in 2009. Unemployment will soar. Choosing Volcker or Summers as the new Treasury Secretary will be a mistake. In the absence of a radical shift in monetary policy, Obama will not be the next Roosevelt."

Public meeting on Tuesday

The Economic Crisis – what role for social ownership?
Tuesday 4th November
7pm
Committee Room 5, House of Commons, London

Following the publication of the LEAP pamphlet Building the New Common Sense - social ownership for 21st century, LEAP leads a debate on what role for social ownership in the economic crisis.

Speakers include: Andrew Fisher (Chair), Gregor Gall, Gerry Gold, John McDonnell MP, Rosamund Stock

Also, you can download A Market Economy based on Common Ownership by Jerry Jones and download a copy of the presentation on social ownership Andrew Fisher gave to a meeting of the Commune. It is a much extended version of the preface to the new LEAP pamphlet, Building the new Common Sense - social ownership for the 21st century.

See you tomorrow – entry is free and everybody is welcome!

Debate on workers' control

Last night, I spoke at a discussion forum organised by the Commune entitled 'The Debates on Workers' Control'. The debate is part of a series of discussion forums on class struggles in the 1970s.

The debate was wide-ranging, considering different models of worker's control - from participation on boards to co-operative control under nationalisation, the role and limitations of trade unions, and the old chestnut of reformism vs. revolution. Around 20 people attended the debate.

You can download a copy of the presentation I gave, and please give any feedback in the comments section. It is a much extended version of the preface to the new LEAP pamphlet, Building the new Common Sense - social ownership for the 21st century.

You can buy Building the new common sense online for just £3 or by sending a cheque payable to 'Another World is Possible' to LEAP, PO Box 2378, London, E5 9QU.

Another review of Building the new common sense

The Commune has done a detailed review of the new LEAP pamphlet Building the new common sense. The Commune states "we fight for a new self-managed society based on collective ownership of the means of production and distribution and an economy organised not for value production but for the well-being of humanity and in harmony with our natural environment" - so who better to review our pamphlet?

You can get a copy of Building the new common sense - social ownership for the 21st century for just £3 - online at the LRC website or by sending a cheque payable to 'Another World is Possible' to LEAP, PO Box 2378, London, E5 9QU.

It’s common sense! - Review of the new LEAP pamphlet

• Review by Mary Partington, which first appeared in the October issue of Labour Briefing.

New Labour's unprecedented assault on the public sector through privatisation and PFIs combined with their refusal to repeal the anti-trade union laws has set back the debate around social ownership years.

UK industries, workplaces and public infilstructure have become more and more unaccountable. The recent collapse of Northern Rock and the Metronet consortium on the London Underground show that the Government was only willing to spend public finance industries or services in order to bail out ventures that have not succeeded within the market. The public took on the risk involved in these projects without any democratisation of either structure. In the meantime the shareholders of Northern Rock and Metronet have, over the years, pocketed huge profits. Nevertheless, these examples – as LEAP Editor Andrew Fisher points out – obliterate the Government's own rhetoric that the market is always more efficient and therefore better.

Building the New Common Sense - Social Ownership for the 21st Century is a useful contribution to reigniting the discussion about the state and the role of workers in exercising control over their workplaces and society. From Gregor Gall's essay on the importance of workplace democracy to RMT General Secretary Bob Crow's piece on the public ownership of the railways, the pamphlet provides a space for alternative arguments about how democratic public ownership is more efficient in providing the needs of society. Rosamund Stock's essay is particularly valuable. She argues that the key component of public ownership is the collective culture of democracy. It is not enough to talk simply of nationalisation or co-operatives, we have to have industries and services that are fully democratically accountable.

As with other LEAP projects, this pamphlet doesn't claim to hold the definitive answer to one clear question. It is an inclusive and discursive contribution to promote rational and informed analysis of how society is run, in whose interest and how it could be run better. These are exactly the sort of intelligent discussions we need to foster.

• To obtain this 28 page pamphlet, send a cheque for £3, payable to Another World is Possible, to LEAP, PO Box 2378, London E5 9QU or order online from the LRC website.