'Social ownership for the 21st century'

A review by Chris Kane of the book 'Building the new common sense: Social ownership for the 21st century'

'Social ownership for the 21st century'

The publication of Social ownership for the 21st century by the Labour Representation Committee on behalf of the Left Economics Advisory Panel is a significant development.  For the first time in nearly three decades an important section of the labour movement is at last developing a discussion on the questions of forms of social ownership, workers’ control and workers’ self-management.  The Tragedy of the historical moment is that at a time when the inadequacy of capitalist society is so glaringly apparent, there is a lack of confidence in the viability of an alternative society fit for humanity.  Amidst all the declarations that ‘another world is possible’ the traditional left has failed to conceptualise what that other world means.  Without developing an idea of what we want to replace capitalism with, the struggle of the labour movement is trapped in a spiral of fighting to ameliorate the conditions of life within capitalism.   In that regard this series of seven articles is a breath of fresh air in the arid plains of English socialism.

The fact there has been no serious discussion of these matters since the upsurge of working class struggle in the 1970s means that a lot of the lessons to be learnt from that period still remain to be worked out.  That is apparent in this pamphlet, for many of the old ambiguities clearly remain to be cleared up.  This is especially important in light of ideas of Social Partnership which are the official policy of the TUC and have had a corrosive effect in the labour movement.

Within the context of the British labour movement industrial democracy/workers’ control has become popularly defined as meaning several things, such as:

1 : Greater consultation – where management retains the final decision-making rights, but workers have direct input to the decision-making process, exercising greater influence beyond the set parameters of collective bargaining.

2 : Worker participation – where management and workers jointly participate in the decision-making process, the workers’ representatives having parity with the management and shareholders.

3 : Full workers’ control – where workers take over the responsibility of management and hold exclusive decision-making rights, overall control being the responsibility of workers’ representatives, elected from and by those working in the industry.

Clearly industrial democracy/workers’ control cannot be all these things.  Clarity is therefore necessary if we are to develop the struggle for workers’ self-government in the 21st century.  During the discussions on industrial democracy in the 1960s and 1970s these ambiguities were being ironed out, it was however an unfinished debate. We believe it is necessary to overcome these ambiguities: in light of historical experience it would more helpful to make a clear distinction between forms of workers’ control and workers’ self-management, these can be broadly defined as:

1 : Workers’ control – whose variants stretch from a lower range –  with the extension of the scope of collective bargaining and increased influence over the labour process and erosion of the managerial prerogatives –  to a higher range, with wide-scale involvement of the workers in actual decision-making.  Whilst preserving the distinction between the workers’ representatives and the management, this would mean in its highest level a form of dual-management in the workplace.

2 : Workers’ self-management – the workers would have total control: managers as such would be abolished, and management would be eliminated as a function separate from the workers themselves.  It would be a system of direct democracy: everyone would participate in the decision making and the workplace would take on a communal form, collectively run at the various levels.

The relationship between workers’ control and workers’ self-management is that of a process of struggle to realise the forms of workers’ self-management latent in capitalism today,  which can be developed in the fight to extend forms of workers’ control into workers’ self-management.   The new pamphlet by LEAP opens the discussion again on these issues and rightly links it to the question of social ownership and seeks to put the questions back on the political agenda.

Gregor Gall opens the discussion with his essay The case for industrial and economic democracy, pointing out that there is a “democratic deficit” in British society. “While there are some limited forms of political democracy through representative institutions, such as Parliament, there are no corresponding bodies for governing workplace relations.”   Gall includes in his argument for industrial democracy a point that the traditional left has largely ignored – the limitations of trade unions. Whilst workers have traditionally sought to promote their interests through unions he writes “….but unions are dependent upon other parties, namely employers and the state for acceptance, legitimacy and recognition, so workers have no automatic inalienable or inviolable rights for exercising some form of control over their working lives”.

Industrial democracy as such should not be dependent on the changing influence and power of unions.  A further point that could be made of course is that many unions now are even less democratic and do not necessarily provide a democratic channel for workers to run their workplaces.

Gall considers that it is generally accepted in liberal democracies that “workers should have a right to participate in the making of decisions that affect their working lives”. What prevents this is “the imbalance of power between “labour (workers), on the one hand, and capital (employers) and the state, on the other.”  In the UK this has take the form of de-regulation of employment relations, a hallmark of industrial relations since Thatcher, except in the case of regulations to curb union powers and discipline labour.   Gall also highlights how this system actually achieves the opposite of what capital wants –  raising productivity –  instead it leads to low productivity, “waste and duplication.”

There are problems with this analysis. Firstly this imbalance is not unique to the ‘collective laissez-faire’ form of capitalism: it is a problem of capital itself. Capital’s proclaimed equality in the contract between a worker and employer is a myth and the worker is a wage-slave with no alternative but to sell his/her capacity to work – labour power.  As such the imbalance of power is integral to the system of producing capital.

Gall holds out the possibility of change not only to make work more effective and democratic but “more fulfilling and enriching”. It is heartening to hear anyone on the left pointing to the possibility of eradicating the alienation of work. This is to be achieved by a system of “joint-control and co-determination”.  This must be of “considerable depth and breadth” and not merely the use of the existing frameworks already established by senior management.  The conditions for “democracy and participation” which are set out combine elements of existing negotiating frameworks, such as rights to information and initiative proposals, and also new rights to “impose obligations on management” and restrict their ability to unilaterally impose their will.  In a nutshell, this would amount to representative structures “balanced between workers and employers”.

Gall’s proposals would represent a major step forward compared to the current situation in which the labour movement accepts collective bargaining and social partnership as the most we can ever achieve.  But Gall’s proposals cannot be an end in itself.  If workers do not manage production then clearly someone else does, and such is the nature of our class-divided society, inevitably capital will re-assert itself with new techniques of control. This is similar to what happened when the working class gained access to Parliament: more and more power was centralised, away from Parliament itself.

Achieving new forms of workers’ control will require a real cultural shift: this is addressed in Rosamund Stock’s Why we need a Culture of Social Ownership. This starts with a precondition which undermines her own proposals.  That is that she will “not deal with the forms of social ownership” but starts with the assumption that “social ownership will take many forms, from state ownership to small co-operatives”.   It is difficult however to see how we can develop the “supporting culture of social ownership” necessary for its success separate from conceptualising  what social ownership means. This is no small matter.

From our 21st century vantage point, from all our experience of the last century of failed state-socialist models, we need to take a firm stand to exclude, not include, the equation of state-ownership with social ownership.  These days many socialists use the term “social ownership” instead of nationalisation.  But whether “public ownership” or “social-ownership” – they both mean the same things – state-ownership.  But they are in fact two very different things.  One cannot equate the state with society, social ownership with state ownership, without advocating the recasting of the capitalist system.

Stock, to be fair, does pose various forms of social ownership, such as cooperatives. Her aim is to build a counter culture to that of anti-cooperative capitalist ideas.  Her conception is of social ownership which is very different from just membership of an association but truly participatory.  This is an important question and her plea for a cultural revolution to enable social ownership is an important question.  The process of developing workers’ self-management does involve a cultural revolution: this is directly linked to how social-ownership is created. If it is developed through the solidarity of struggle from below then by its very nature it involves cooperation in its very foundations.

The other forms, both state-socialist and the “cooperatives”, are something brought about externally to workers themselves. For example she writes that: “people learn from doing: if people are put into a structure of co-operative relations, they will not only start to co-operate more, see others as more similar to themselves, and support egalitarian outcomes such as redistribution and equality of outcome”.   In fact experience has shown otherwise: for real lasting social ownership cannot come from above.  As she herself writes “you have changed the concept of ownership from being an individual one to an inherently social one. Such accountability would be a spur to grassroots organisation.”  This is precisely what we need to do.

The essay by Jerry Jones, former economics correspondent for the Morning Star, is entitled The economic case for worker-owned co-operatives.  In his opening line he states that: “An economy based on worker-owned co-operatives would not look much different from the economy we now have”.  The reader won’t be disappointed: the economy he depicts is indeed not much different. Essentially what Jones conceptualises is a worker-controlled capitalist economy, where “the major difference would be that the profit would go to the workers rather than the capitalist owners”.  The political economy is Keynesian, “it is likely that workers would choose to pay themselves more” which “in turn, would stimulate more investment and employment in production”, etc.  Jones knows the dangers inherent in this system, such as the drive to reduce labour costs to be more competitive: his solution to the workers engaging in such practices is minimum wage legislation.   This is partly connected to Jones’s mistaken view of the crisis which can occur in capitalist society as being caused by the workers not earning enough to buy goods and the bizarre idea that capital is accumulated because of it having nowhere else to go due to lack of investment opportunities.

Jones’s problem is he sees the importance of production relations and the need to change them but does not see the market as a manifestation of these production relations.   Marx long ago showed that crisis is not caused by a shortage of consumer demand. On the contrary, it is the crisis that causes a shortage of demand. A crisis occurs not because there has been a scarcity of markets but because from the capitalist viewpoint there is an unsatisfactory distribution of income,  Marx, based as he was on the capital-labour relationship, saw the decay in capitalist production in the tendency in the rate of profit to decline, which has nothing whatever to do with the inability sell.  On the other hand, like Jones, the bourgeois economists see the decline in the rate of profit merely as a result of a deficiency in effective demand.

Jones seems to think these problems are overcome by placing the workers in control in a profit share system.  It is basically Market Socialism, reminiscent of the form practiced in Yugoslavia, which actually undermined workers’ self-management.   Capital lives by obtaining ever more surplus value from the worker who produces it.  For this reason any effort to control capital without uprooting the basis of value production is ultimately self-defeating.   What is entirely missing in the views of Jones is the idea of transforming the economy – to end value production and exchange.  Instead with Jones we have simply capitalism with some socialist flavouring.

If Jones repeats the errors of Market-Socialism, the essay by Communication Workers’ Union activists Maria Exall and Gary Heather Telecommunications of the future under public ownership disappointingly repeats those of state-socialism.  They make a well researched indictment of the post privatisation set-up in the telecommunications industry, however their statement that “Under public ownership surplus was used to finance social investment for the many, while under privatisation was used to finance social investment for the few”, is a more than  exaggerated view of the previous forms of state-ownership in the UK.

The authors advocate a re-integration of the telecommunications industry into the state-sector and explain the tangible benefits that could thus arise. This would be achieved by the exchange of shares for interest bearing bonds. One can understand this as an ameliorative programme within an overall drive for something far better but it is not presented in that way at all.  Instead “this bright future will only become reality if communications industries are, planned, organised and democratically controlled under public ownership to serve the public good along egalitarian lines”.  But instead of painting the picture splendid the authors leave us on the arid plains of state ownership. This is far from a “bright future”.  A call centre worker remains alienated and exploited whether in a state owned or private owned call centre: this vision offers little hope to the wage slave. This proposal by the CWU activists is far cry from the views of their predecessor union the UPW who in 1956 organised a campaign to foster support for the “principles of Industrial Democracy and an appreciation of how those principles can be applied to our everyday working lives.” What they said in The Business of Workers’ Control presents a far brighter future to the generation of today:

“We believe that industry should be so organised that its social purpose should be recognised by all those who engaged within it as paramount.  In other words, while we must recognise and accept the importance of production techniques, this must not blind us to the essential importance of man as man.  This makes us hold fast to a basic belief that industry provides us with an opportunity to develop our qualities not only as producers, but as human beings and as citizens.”

The vision outlined by Bob Crow of the RMT in Rail privatisation – a failed experiment contrasts sharply to that of the CWU comrades. Crow similarly presents clearly the utter failure that privatisation has brought in the railway industry, with £1 billion being extracted each year by the private operators in guaranteed profits delivered by the government from tax-payers’ money.   But Crow makes clear that “there can be no desire to repeat the mistakes of the BR era”.  He wants a rail re-nationalisation which would see trade unions “involved at the ground floor of change, drawing up and delivering an integrated and environmentally sustainable national transport plan”. Furthermore he does not rely on government bonds, calling for re-nationalisation “without compensation”.

His immediate form of ownership would be a combination of “trade unions, national, regional and local authorities, passengers, and the industry itself”.   But he goes further: “Public ownership and democratic accountability must go hand-in-glove, but also in the context of wider social and economic change.” Crow traces the long history of the rail unions’ demands for greater workers’ control from 1914, 1917 and 1945 – in 1953 they argued that nationalisation should be a “preliminary to socialism, and it is in that context that democratic self-management becomes a realistic proposition.”  In this regard Crow stands head and shoulder above the other contributors to the LEAP pamphlet.

The essay by Gerry Gold, The Growing Case for Social Ownership, does take the pamphlet to a different level in stating clearly that “ethical production and capitalist production for profit are mutually exclusive opposites”. Gold recognises the long and often neglected history of co-operatives, which in the world provide over 100 million jobs. He does go out of his way to emphasise that lessons must be learned from the “failures of the bureaucratic, state-run forms of social ownership of the Stalinist period”. Instead – “new forms of participative democratic control and accountability will be needed“.

But he goes one step further, recognising that “self-managed organisations” will have a role in a new form of economy:  “The campaign for social ownership and control should explore ways to distribute the income from the operation of an organisation.  The key issue is the replacement of the wages-for-labour employment contract which along with ownership by investors interested solely in profits are the foundations of the failing social and economic system. Gold calls for a new kind of government resting on an independent social movement, and concludes that it is necessary to recognise “that the old politics is finished and that creative, new solutions must be found.”

The LEAP pamphlet concludes with an appeal by John McDonnell MP that now is the time to “reinvigorate the debate about a new role for social ownership in the 21st century”. From this debate he argues “we need to take forward a campaign for a worker controlled economy, accountable to our communities” into the whole labour movement.

In 1953 The TUC published an Interim Report on Public Ownership which bemoaned criticism of existing structures of industry by advocates of ‘workers control’. They were branded “out-of-date ideas” and it said that a “determined effort ought therefore to be made by education and propaganda” to rinse them out of the movement.  Fifty-five years later communists can celebrate their failure: the ‘good auld cause’ is rising again and to that end the LEAP pamphlet is a most welcome contribution.


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