Almost 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 shout 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.).