Revisiting Public Ownership

1. Introduction

Public ownership has returned to the mainstream political agenda, though in different guises in different parts of the world. For many, this is most welcome in South America, where a Polanyian movement is attempting to wrest control of key resources from foreign corporate elites for more progressive ends. Even in the United Kingdom and the United States state intervention and regulation of markets have, however fleetingly, returned to the center of economic policy discourse. The recent financial crisis brought about unprecedented levels of state intervention in the banking sector with the full or partial nationalization of finance capital.

Well before the most recent financial crisis, the fragility of this phase of capitalism had become increasingly apparent (Jessop 2002; Harvey 2005; O’Connor 2002). From the bailing out of various financial institutions in the United States, to the growing role of state enterprises in underpinning globalization in China and beyond, to the renationalization of oil and gas resources by the Russian state, the profile of government interventions is increasingly marked even if it is not necessarily consistent with progressive means and ends.

Despite all this, there is little sign either in the corpus of mainstream politics or the academy of a fundamental questioning of prevailing economic orthodoxy. Indeed, discourse is confined to a damaging pre-occupation with addressing “public” finance imbalances, as if they were analogous to household finances, and an on-going adherence to the centrality of an abstract market. In a similar vein, behind the recent wave of bank nationalizations remains the clearly stated intent to return to private ownership as soon as “normal market conditions” have been restored, although it is never clear what is meant by “normal.” Indeed, nationalization appears to have been about the public sector bearing the costs of the financial crisis, with responses tailored to circumventing the inherent systemic contradictions of “money manager capitalism” (Crotty 2009; Kotz 2009; Palma 2009; Wray 2009). Public ownership remains cloaked in the language of better regulation and management of market forms with a continued commitment to private ownership as the more efficient form of service delivery. The appointment of bankers and private executives to run the nationalized companies and their personal relations with government officials and ministers in question reinforces this point (see Brummer 2009).

Yet, debate among the academic left about public ownership in recent years has been muted. ² Whilst there has been considerable analysis of the economic and financial crisis (Kliman 2008; Gowan 2009), there has been little attempt to develop an agenda that might feed into mainstream discourses. Although there have been some important recent theoretical responses to Hayekian concerns about the limits to planning, issues of liberty and democracy, under socialist forms of economy (O’Neill 2003; Burczak 2006), left thinking on the more specific issue of what forms public ownership might take in the context of globalization and contemporary economic conditions has scarcely advanced since the early 1980s and the heated debates that in the United Kingdom revolved around the alternative economic strategy (AES) and movement for workers’ control. ³

The argument presented here uses the AES approach as an entry point, the aim being to transcend the frequently abstract and therefore distant nature of traditional models of public ownership. For us, ownership resonates with rights and is therefore enabling of the individual. These rights refer, among others, to the use, appropriation, and disposal of “things.” It is a source of considerable regret that the dominant model of public ownership in the United Kingdom and indeed elsewhere from the 1940s to ‘80s frequently demonstrated a cursory regard for such rights. ⁴

In these circumstances there is an urgent imperative to advance forms of policy intervention that promote economic democracy, social equality, and environmental sustainability. Here, we seek to contribute to this through a reconceptualization of the concept of public ownership. In doing so, we refer to O’Neill’s (2003) associational socialism and Sawyer and O’Donnell’s (1999) ideal typification of ownerships, and argue for alternative and varied forms of ownership that are designed to enhance democratic decision making in the economy, to achieve greater equality and social cohesion, and wherever possible to encourage localized rather than central planning. We advocate policy solutions that recognize both the limitations of centralized planning and unfettered free markets as forms of economic organization. Whilst our contribution is framed by debates and developments in the United Kingdom, we draw upon an illustrative example of public ownership from Denmark. We believe our case is consistent with macro-oriented employment-led development where the state formulates an “employer as last resort” program (Kaboub 2008; Kregel 2006; Wray 2007), but further examination of this is beyond the scope of the current paper. Our arguments are necessarily broadly conceived and abstract; they are not intended as a blueprint to some nirvana, but as a contribution to a discussion on the potential for a reconfiguration of the meaning of public ownership.

The rest of the paper is structured as follows: previous forms of public ownership are outlined and briefly critiqued, and then some consideration is given to the AES of 1980. The limitations of this approach are outlined and followed by analysis of democracy in economic decision making. This invites considerations of the rescaling of notions of public ownership, and is followed by a case analysis. Conclusions follow.

2. Public Ownership and the Past

One of the problems with the concept of public ownership is that it carries a lot of baggage, providing an easy target for detractors. The devastating (however ill-founded theoretically) critiques of nationalization made by the Thatcherites and Reaganites as part of their successful counter-attack on the “big state” in the early 1980s have not been satisfactorily addressed; witness the dominant discourse of the financial crisis: there is little mainstream reference to systemic failure. Instead, the narrative focuses on issues of regulation, and individual culpability and greed.

Concentrating our analysis here on the United Kingdom, the program of nationalizations in the 1945-51 period and subsequent nationalizations by Labour governments in the periods 1964-70 and 1974-9 reflected an essentially centrist social democratic perspective towards the economy, based on a Keynesian national welfare state model (Jessop 2002) whereby the role of state intervention was first and foremost about correcting macro failure, and then in the interests of social justice and greater equality, which differed from more recent “Third Way” approaches. The result was that nationalization did not, despite outward appearances, fundamentally challenge the power structures or organizational forms of capitalism, whilst at the same time leading to the incorporation of organized labor into state projects rather than fomenting a more radical and genuinely democratic economic agenda (Hyman and Elger 1981).

The preferred “Morrisonian” model of national and centrally organized public ownership adopted by Labour governments over the 1945-79 period had, at its heart, Keynes’s instinct to “save capitalism from itself” with the modernization and stabilization of the British market economy. ⁵ In this sense, the 1945 Labour government’s program needs to be viewed in the broader contemporary context of Cold War geopolitics and the attempt to bolster fragile Western European capitalism at a time when the Soviet Union emerged initially from the Second World War with considerable power (Armstrong et al. 1984). As a result, the forms of nationalization adopted were more often than not seen as complementary to, or even facilitating, the continued accumulation of private profit. ⁶

Although it is important here to critique the nationalization process for its failings in delivering more socialistic forms of economic organization, we should recognize the genuine radicalism and sense of injustice that inspired both politicians and theoreticians of the time. ⁷ Nevertheless, the key criticism that applies relates to the failure to inject anything approaching a more democratic form of organization into the nationalized industries, stopping short even of the concept of elected worker directors that subsequently developed in the then West Germany and the Nordic countries. Instead, ministers preferred the model of the large public corporation along the lines of the British Broadcasting Corporation (BBC) — at arms’ length from government control — but at the same time providing no effective voice for either workers or consumers (Saville 1993). Despite union opposition and protests, time and again the government bowed to the interests of establishment civil servants, managers, and private business in excluding worker representatives from the new corporations’ boards. ⁸

These criticisms were enunciated in the 1970s when a far more radical and democratic agenda was being constructed at the grassroots of the Labour Party and within the unions that was to culminate in the first AES. The AES was initially developed by Labour Party sub-committees and was prompted by dissatisfaction with the orientation of Labour governments in the 1960s and ‘70s in that they were perceived not to be vigorously pursuing a progressive agenda. The AES subsequently broadened in the late ‘70s and early ‘80s to include the Communist Party, left-leaning Labour MPs (the so-called Tribune group), Cambridge Political Economy Group, the Conference of Socialist Economists, and some trade unions, amongst others (Callaghan 2000). Addressing the perceived unpopularity of the nationalized industries, the AES stated:

Widespread nationalisation is simply not popular […] the experience of nationalisation, however much we may condemn the failure to “socialise” the public sector, has not been such as to give support for a socialist case for public ownership. The way that nationalised industries have in practice operated, particularly in so far as the socialist criteria of production for social need and democratic forms of management are concerned, has not greatly differed from firms in the private sector. Public ownership is identified, however unjustified this may be, with inefficiency and bureaucracy. (London CSE Group 1980: 74)

Rather than delivering greater democracy and involvement in economic decision making, nationalization had by the late 1970s – in the context of the growing ascendancy of the free market philosophies of Austrian, Chicago, and Virginia schools – become a pejorative term for inefficiency and state subsidy of monolithic enterprises. The continued exclusion of communities and workers from economic decision making even helped to reinforce Hayek’s (1945) contentions of the anti-democratic nature of state driven central planning and his warning about Soviet style totalitarianism. While social democratic forms of public ownership were a long way from Hayek’s and others’ caricature of the state, the charge nevertheless took hold of the public imagination in both the United Kingdom and United States, providing a boost to the nascent neoliberalism, and evoked famously in President Reagan’s inaugural address in January 1981 where he proclaimed: “in this present crisis, government is not the solution to our problem. Government is the problem” (www.reaganfoundation.org/).

Even for its supporters, nationalization had not delivered the changes envisaged in the heady days of postwar radicalism as these quotes from former coal miners illustrate:

I can remember standing at the pit with the banners, celebrating with my father and his friends. They thought, this was it. What a surprise they were going to get. They thought nationalisation would bring everything they’d fought for. But within a very short space of time they found out that they’d swapped one boss for another. The first boss we got was a major from the Indian Army, six months later followed by Captain Nicholson …. Later we had a banker!

We really believed it would make a difference. We really thought it was the beginning of socialism, you know, almost time to hoist the red flag. I thought that we’d be working for ourselves, that we’d be in control. But in fact the supervision and bureaucratic administration became a hundred times worse. You’d get 10 foremen where you only had one; you’d have to use 10 pieces of paper where before you’d only have one.You’d always have to go through many more channels to get anything done. That approach killed nationalisation. A lot of us felt really frustrated. Mind, I still think nationalisation is the only way, but next time it will have to be different. (Former coalminers discussing the 1940s’ nationalization in Beynon and Wainwright 1978: 180)

In reality, postwar forms of nationalization were part of social democratic attempts at capitalist modernization, undertaken by national states, with little attempt to develop more radical forms of economic governance. Indeed, capitalist modernization agendas could often be driven more effectively under state ownership than might have been possible under fragmented forms of private ownership and the right (Hudson 1989). As the work of Huw Beynon, Ray Hudson, and others on the effects of modernization policies by state-owned industries in the period from the 1960s to the 1980s powerfully demonstrated, nationalization actually resulted in the destruction of jobs and communities rather than a more progressive alternative (Beynon et al. 1986: 28; see also Hudson 1986; Sadler 1982). In the north of England for example, the publicly owned National Coal Board presided over a reduction in employment from over 180,000 in 1952 to 49,000 by 1975 (Hudson 2000: 40-41). Subsequently, the victory of the Thatcher government over the miners in the pivotal 1984-5 strike and the virtual destruction of the industry in its aftermath was arguably made possible partly by the continued state ownership of the sector.

3. Public Ownership As Workers’ Control

The AES’s response to these critiques of nationalization was to advocate a new set of relationships, between management and workers, giving the workforce a greater voice in the strategic planning of businesses. Although it was not radical enough for some (e.g. Schwarz 1981), the approach reflected an important and developing critique of the capitalist labor process (for example, Braverman 1974) and the need to challenge the social structures of accumulation, exploitation, and alienation more fundamentally through imposing greater worker control and economic democracy (Tomlinson 1980; Hyman and Elger 1981).

Whilst politically and theoretically an improvement on social democratic models of public ownership, this approach remained limited on the challenge of how to run an advanced economy along more democratic and accountable lines. In particular, the AES reflected too much emphasis on “workers,” and in particular the heroic predominantly male industrial proletariat, over other groups, and therefore neglected the need to construct a politics of class struggle around a diversity of social and political identities. Like much conventional Marxist thinking, the productivist bias of the AES neglected the spheres of consumption and social reproduction (see Callaghan 2000; Cleaver 2000). Yet, as Baran and Sweezy (1966) argued, in advanced capitalist societies where whole sectors of the economy have become dominated by monopoly interests, some of the worst exploitation by corporations takes place in the sphere of consumption. It also neglected the sweeping changes that were already evident in the workplace itself, with a shift away from male manufacturing employment to a feminized, service-based, and fragmented labor market (see also O’Connor 2002).

Thirty years on such changes have become more pronounced and the consumption sphere has become an increasingly significant area of conflict, particularly in those deregulated and privatized utilities where production for social need has been replaced by the profit motive. Thus, aside from those whose jobs are directly affected, it is low-income consumer groups, especially pensioners, single parent households, children, and those who are marginalized from full-time and permanent forms of work, that are most vulnerable to the increasing commodification brought about by the privatization of the key utilities needed for social reproduction. For example, research by Waddams, et al. (1997: 68) into the effects of U.K. privatization on households reveals that the main impact has been one of “considerable redistribution between different groups.” Their study of the privatized utilities found clear evidence that, rather than increased competition driving prices down for all consumers, it was leading privatized companies to operate strategies of “monopoly exploitation” (ibid.).

A critical point therefore in considering new forms of public ownership is that private monopolies that exploit the most vulnerable consumers are not replaced by other forms of monopoly controlled by vested interests. A return to highly centralized Morrisonian versions of nationalization or the creation purely of a worker managed economy and a productivist bias will create new forms of alienation for other groups in the population, such as consumers and those outside the employment sphere.

4. The Limits to Central Planning in Developing Innovation, Creativity and Democracy

The other major problem at the heart of the AES approach was its view of how economic decision making would evolve over time. Specifically, it advocated five-year strategic plans in a model that was essentially similar to the Soviet regime of centralized planning. Such a model is likely to be highly undemocratic in practice, particularly where industries remain organized on a large-scale national basis (see Clarke 1993). For an economic system to be democratic requires a level of devolved decision making, variety, and choice which is simply not present under centrally imposed planning regimes:

No convincing scheme for durable economic decentralisation has been proposed, without the equivalent decentralisation of the powers to make contracts, set prices, and exchange products and property rights, through markets or other forms of property exchange. This does not mean that markets are regarded as optimal or ideal, nor that an entire economy is made subject to “market forces.” It does mean, however, that markets and exchange are necessary to sustain genuine economic pluralism and diversity. (Hodgson 1999: 31)

This point is inescapable. A system of completely centralized planning contains serious flaws in terms of economic efficiency, social need, and democratic accountability. Economists who have been sympathetic to socialist ideals have long recognized the limits to central coordination and the need for decentered and more spontaneous mechanisms for day-to-day decisions:

Clearly in all economies, and especially socialist ones, an efficient mechanism has to be found to devolve decisions about investment to lower levels, while ensuring that the rest of the economic integument is favourable to making such ‘investments’ ‘effective.’” (McFarlane 1997: 165)

In developing our critique and alternative proposals here, Hodgson’s (1999, 2005) observations on, and criticisms of, various models of socialism, particularly Adaman and Devine’s (1996, 2001) proposals for a participatory model of socialism, provide a valuable reference point, and our following analysis draws from Cumbers and McMaster (2010).

Adaman and Devine have, in various publications, advocated limits to the market mechanism, proposing instead greater recourse to a democratic system of participatory planning. They state:

Democratic participatory planning is envisaged as a process in which the values and interests of people in all aspects of their lives interact and shape one another through negotiation and cooperation. In the course of this process tacit knowledge is discovered and articulated and, on the basis of that knowledge, economic decisions are consciously planned and coordinated. (Adaman and Devine 1996: 531-532)

Whilst the objective of participatory planning is one we would endorse and the first sentence of the quote is very much in the spirit of our argument, we think there are problems with assuming that all knowledge can be unproblematically codified to become available for planning committees, devoid of its social context (Hodgson 1999, 2005). In this regard Hodgson (1999, 2005) provides a compelling critique, noting how:

The idea that this [tacit] knowledge can be readily extracted from its institutional carriers, and freely codified and processed by a committee … perpetuates a fatal error of Enlightenment thought: that such matters can largely be made subject to reason and deliberation; and that the mind may soar free of all habits, preconceptions and institutions – of which in fact it is unavoidably obliged to make extensive use. (Hodgson 1999: 60)

This is important when considering what forms of public ownership are most appropriately geared towards delivering economic democracy and participation. Relegating considerations of the social context through which knowledge develops in practice – as both mainstream economists and some Marxists do (Hodgson 1999) – is not only flawed in understanding how innovation and social creativity operate (Cumbers and McMaster 2010), but is potentially fundamentally undemocratic, as it may create restrictive information channels reflecting rigid hierarchies, rather than allowing new forms of knowledge to emerge and develop through a freer flow and exchange of ideas.

Indeed, the main flaw in central planning is not that it is more inefficient in allocating resources than market-based systems, but rather that it stymies innovation and human creativity in the context of the evolution of real world economies. The work of Murrell (1991) in particular has shown that Soviet bloc countries performed as well as Western capitalist states in the short term in resource allocation. Where Soviet economics lagged however was in long-term dynamic efficiency, which involves “not the allocation of existing resources but the potential for dynamic and transformative growth” (Hodgson 1999: 59). This is because the forms of knowledge that lead to new innovations in products, services, and processes do not arise in the main from formal planned research, administered by committees (whether of multinational companies or state bureaucracies), but take place through social interaction in the coming together of individuals in a free, open, and democratic exchange of ideas.

The foregoing, of course, does not in any sense mean that planning or deliberative processes should not be heavily involved in addressing socio-economic problems. Indeed, our argument here is rather the contrary, as we demonstrate below. As noted above, the failure to treat knowledge production and economic action as socially embedded and interactive processes also applies to most of mainstream economics with its focus upon atomized individuals and market exchange, albeit subject to information imperfections (see Fine and Milonakis 2009). Rather the point is that socialists need to recognize the limits to central planning and statist forms of organization in the realization of more democratic and participatory forms of collective action.

5. Knowledge, Dialogue, and Democracy in Economic Decision Making

As O’Neill (2003) and Hodgson (1999) have demonstrated, the philosophical underpinnings of extreme forms of markets and planning both have their limitations in their neglect of the realities through which knowledge is created and uncertainty infuses economic life. Both try to reduce economic decision making to calculable measures (e.g. a price mechanism or accounting matrix to inform planning decisions). O’Neill’s work is particularly useful for us here. Drawing upon the work of the associational socialist Otto Neurath, who was involved with socialist experiments in decentralized planning in Munich and Vienna in the 1920s and 1930s, O’Neill rejects the scientific rationality of both mainstream economics and orthodox Marxism in favor of a pluralistic perspective that recognizes the limitations and provisional nature of knowledge claims. This is important because it rejects both market and socialist solutions to economic problems which seek to universalize decision making on the basis of making so-called rational choices: “The unpredictability in science in general entails that the technocratic ideal of the discovery of an optimal solution to social decisions is untenable” (O’Neill 2003: 191).

Recognizing the imprecise nature of knowledge construction and the subsequent dangers of attempts at “capturing” knowledge, whether in the boardrooms of oligopolistic multinationals or in the politburo of a central committee, dialogue and pluralism which can facilitate open democracy should therefore be at the heart of any system of socialist economics (Cumbers and McMaster 2010). This is particularly important when considering the organizational forms taken by public ownership, for it does not imply any one dominant model of ownership or governance. Returning to O’Neill and Neurath, whilst we might agree on a common or shared set of rules and principles for public ownership, such as a commitment to production for social needs rather than exchange values, the pursuit of social equality, and economic democracy, the principle of organizational diversity and variety should also be enshrined to prevent totalizing solutions and totalitarian power structures which can quickly proscribe economic decision making to a narrow range of choices rather than the ability to contest and alter dominant economic trajectories. Open dialogue and democracy in this sense require a degree of diversity and variation in economic practice. In this respect, and in the defence of decentralized forms of democratic planning, O’Neill convincingly argues that markets – with their propensity towards commodification and alienation at the expense of all else – are no more a guarantor of individual freedoms than planning committees. Interestingly, Neurath advocated a non-market but decentralized version of socialism founded upon overlapping associations of self-government where power was dispersed rather than held in a single authority, although there would remain the need for some central coordination (O’Neill 2003).

At the core of these arguments is the need for institutional rules that are fundamentally grounded in democratic procedure. Following the work of American pragmatist philosopher John Dewey (1981), which we consider in many respects complements O’Neill’s emphasis, it is vital to recognize all inquiry as value-laden and socially embedded; the process of inquiry is thus a source of change both epistemologically and ontologically. Moreover, inquiry – its framing and conduct – has the potential to change communities. For Dewey this change should be progressive in addressing social problems, especially for the most vulnerable in society, and in this respect Dewey charges scientists with a particular duty to inform social deliberation. As Tool (1995) recognizes, power structures afford elites the ability to impose invidious distinctions in such processes. Consequently, economic decision making and valorization should be embedded in a process of deliberative democracy. This is the basis of the reform advocated in this paper. The means of achieving progress must be democratic and the ends-in-view must also be democratic. Following Samuels (1995), our concerns are with advancing a pluralist society, which is free, open, democratic, and liberal, and to advance deliberative over non-deliberative decision making. The precise nature of this emerges, will vary over time and space, and is context dependent.

6. Rethinking and Rescaling Public Ownership

As has been argued, the old Morrisonian forms of postwar nationalization chosen in the United Kingdom were ultimately more concerned with managerialist “independence” and capitalist accommodation than with economic democracy, and essentially failed to challenge the underlying and undemocratic structures of value within the industries that were nationalized. Following on from this, and in light of the foregoing, an important principle for a renewed dialogue of governance and public ownership in this sense should be to develop forms of ownership that instil both pluralism and deliberative decision making. We would argue that this is best guaranteed through a commitment to localized democratic control over central planning in economic development (Hines 2000), wherever this is technically possible. However, there are important arguments, on the grounds of enablement (see for example, Moreau 2004), power (Crotty 2009; Wray 2009), justice, as well as narrower economic issues of scale and scope, for higher level forms of economic organization and co-ordination at national, European (or regional), and even global scales (in the case of policies for addressing climate change). Clearly, there remains a role for the state, at higher scales, in regulating the economy (the most obvious recent examples being in regard to effects of “money manager capitalism”), and in establishing employer as last resort programs (Kaboub 2008; Kregel 2006; Wray 2007). However, in many other instances, economic activities can be devolved to sub-national or local scales. And, in some cases, the development of new technologies (e.g. wind and solar energy), or growing environmental concerns such as the need to reduce carbon emissions in the transportation of food supplies, make localized production and delivery of services even more desirable. Moreover, we feel this type of scalar arrangement would avoid the patterns of distribution of production activities observed in the work of Olsen (2010). Olsen presents evidence disputing agglomeration and scale economies as factors in the location of U.S. industries. Instead, using data on union density and bargaining strength, he argues class conflict has primarily shaped the location of postwar industry in order to increase the reward to capital.

Nonetheless, we consider that markets have a potentially significant role: functionally as mediums of exchange and potentially creation. Markets are not the flimsy representations of neoliberalism and mainstream economics, and some Marxist representations for that matter. Markets are an institution and as such, following institutionalist thought, possess constraining, enabling, and constitutive properties like all other institutions (see for example, Hodgson 2004). Moreover, as Polanyi (1944) instructs us, markets are essentially political constructs that require the state to specify legitimacy in the distribution of rights and obligations. Markets by this definition cannot be “free”; markets are supported by (and supporting of) other institutions, and therefore demonstrate variety. Accordingly, markets are necessary but not sufficient for the fetishism of accumulation; this is associated with a particular configuration of institutions constituting capitalism.

Nevertheless, any commitment to decentralized forms of public ownership should not be at the expense of a more general commitment to social equity (Tool 1995; Cumbers and McMaster 2010), between localities, or take the form of a regressive protectionist agenda that frustrates the development of broader solidarity relations, which is apparent in some Green localization strategies (for overviews, see Kennet and Heinemann 2006; Woodin and Lucas 2004). Green localization strategies are informed to varying degrees by the notion of abundance (shared by other heterodox economic approaches); Georgescu-Roegen’s (1971) analysis of economics and thermodynamics, focussing on entropy; Schumacher’s (1973) Small is Beautiful; and a “bottom-up approach” (Kennet and Heinemann 2006); among others. Thus, for example, Greenwood and Holt (2010) emphasize that purposeful development is founded in the growth of all forms of “capital”: natural, human, and social. This implies that standard notions of economic growth are unnecessarily restrictive in that living standards embody non-monetary dimensions, and should extend to the broad base of the population. We feel Greenwood and Holt’s aversion to what Marx alluded to as the monetization of human relations resonates with our argument, although we have reservations about the ubiquity of the term “capital.” This strikes us as potentially reductionist and susceptible to Marx’s “capital fetishism.” Nonetheless, the stress on alternative indicators of development, as expressed by Greenwood and Holt, is compatible with the case advocated here.

Universal principles to individual economic and social rights — and in particular human dignity, the right to a decent standard of living, and the positive freedoms for individuals to realize, in as far as possible, their goals (Burczak 2006) — must be maintained, even if we are alert to the absolutism of strands of enlightenment thinking on this subject. As with any economic system, there will be an ongoing dialogue between encouraging diversity and local autonomy and ensuring a set of basic economic, social, and political rights for citizens irrespective of location. As economies evolve in a dynamic fashion, there will be a recasting of relations between different geographical scales, whereby central governments remain important in overseeing and regulating sectors and markets (including worker and consumer rights to participate in decision making), but local level actors are given the power to determine forms of organization and ownership.

In other words, there should be de facto as well as de jure devolution of power, which includes decisions regarding the level and nature of ownership of the economy. A socialist economics should aspire towards examples of dispersed and democratically controlled forms of public ownership that are technically and socially necessary at the higher scales, whilst dispersing power and decision making as far as possible to a diversity of social actors at the local level. In the interests of diversity and stimulating innovation, a mix of ownership forms, including forms of private ownership, should be encouraged, in line with local needs and aspirations so that employees and consumer groups have a genuine voice: this is our overriding concern. However, whatever the organizational form, institutional and regulatory procedures need to be directed against any attempts to concentrate economic power or lead to the misappropriation of resources on behalf of particular groups (Burczak 2006).

Of course, there are many different forms of public ownership as evidenced by Sawyer and O’Donnell’s (1999) typology. They identify six forms: full public ownership (FPO), partial public ownership (PPO), strategic public ownership (SPO), regional public ownership (RPO), consumer cooperates or mutualization (MU), and employee ownership (EO). In posing the question, which forms are most appropriate, they highlight the aspirations of public ownership, which are broadly: to regain the commanding heights of the economy (i.e. take into public ownership industries too important to be left in private hands); to facilitate greater community control over resources, especially in the context of globalization and increasing foreign ownership; to redistribute income and wealth; and to secure better environmental and regulatory standards. Two further rationales for us here are the dispersal of economic power, and the promotion of greater participation by and dialogue among ordinary citizens in economic decision making. The point to make is that some forms of public ownership are better at delivering economic democracy than others, although as we have noted there will be an inevitable trade-off between delivering greater local participation and securing broader distributional equity and social justice. For example, taking an industry into full public ownership (FPO) – akin to the Morrisonian model of nationalization — will in theory secure the objective of public participation through Parliament and the minister responsible, but control on a day-to-day basis still remains a long way from the grassroots. RPOs, particularly if they are organized at the local authority level and under the control of local government, are potentially more desirable in this respect, as are both MUs and EOs which bring decision making closer to the grassroots.

Given the argument articulated here, ownership forms selected should be informed by the principles of non-hierarchical participation and dialogue among all economic participants (Cumbers and McMaster 2010). These forms will vary according to the characteristics of particular activities and to varying degrees of historical, place, and scale contingencies. For instance, as of necessity our considerations are mainly related to commodity production, and the contingencies inherent here will differ significantly from the provision of health care, for example. In this sense, there can be no one model but rather a commitment to a set of values expressed in a plethora of different forms. Developing on Sawyer and O’Donnell’s work, we would advocate five principles to adhere to:

7. A Brief Illustrative Proposal: The Role of Dispersed Ownership and Associational Governance in the Danish Renewables Sector

To exemplify our argument here, we draw upon evidence from the energy sector, and in particular the Danish success story in creating a significant renewable energy sector based around wind turbine technologies. Energy is one of the priority sectors for a return to public ownership given the political importance of tackling climate change. At the same time, it is the sector most under pressure from continuing neoliberal reforms at the European level. Various ongoing directives are geared towards introducing more competition into the energy and electricity sectors across Europe with scant regard for either the environmental or social cost. U.K. and European policymakers, as well as the Obama administration in the United States, are also placing faith in market-driven mechanisms to deliver CO² reductions, despite mounting evidence of the flaws in the trading emissions scheme (see Lohman 2008).

So far, the major effect of market liberalization within the energy sector seems to have been to stimulate cross-border alliances and the concentration of ownership at the European level. Formerly nationally oriented utility groups such as Electricité de France and PowerGen of the United Kingdom are using dominant national market positions (and the stable operating income associated) as a springboard for international expansion. Rather than liberalization leading to greater competition, innovation, and improvement in customer services in domestic markets, it is leading to the redeployment of what were formerly public assets into speculative and often highly risky (foreign) ventures. At the global level, deregulation of energy markets has led to financial speculations and the emergence of dubious trading entities such as the now defunct and disgraced U.S. corporation Enron. The evidence that does exist suggests that those countries that have gone furthest down the route of reducing CO² emissions and introducing renewable forms of energy are those that retain a strong commitment to forms of public or common ownership and strategic planning (Cumbers 2007).

Denmark has been the pioneer in this regard, having increased the share of renewable energy in its electricity generation from virtually nothing in 1980 to 15 percent by 2007. This has created a wind turbine industry employing over 20,000 people with 50 percent of the world market. A less well-known aspect of the Danish success story is the role of cooperatives and local ownership; 85 percent of turbine ownership is held by individuals or cooperatives. Local ownership has been critical in gaining both public support and investment for renewables in Denmark but also in Germany (Sawin and Flavin 2004; Stoering 2004). A critical element of Danish policy until recently has been what has been termed “distance regulation” whereby ownership of turbines is restricted to those living in the municipality where the turbines are sited. This has been a major constraint on private and corporate incursions into the industry whilst simultaneously stimulating local collaborative ventures. Another key element has been strong intervention through subsidy by the central government to keep prices below the market norm, thus stimulating demand and investment.

A key element underpinning this example is the institutional basis of Danish political economy. Only the neoliberal policies of the current Conservative government – in power since 1999 – have checked the success of the Danish industry, raising questions about hitherto ambitious but realizable targets to increase renewables further, and leading to a recent decline in jobs (Sawin and Flavin 2004).

Despite these recent setbacks, several themes inherent in the Danish case are relevant for our broader argument here. Critically, institutional and regulatory mechanisms–such as the “distance regulation” law and state support for renewables–have been important in both dispersing economic power and creating the conditions for greater public participation, deliberation, and economic democracy in the sector. The renewables sector in Denmark also emerged out of a much longer history of decentralized political and economic decision making, such that local and municipal authorities have had far more involvement in the energy sector than in more centralized states such as the United Kingdom and France, and a tradition of associational governance between a small firm dominated economy, system of strong collective decision making through business associations, and a well-organized trade union movement (with 80 percent membership) (Amin and Thomas 1996; Neilsen 2007). Indeed Denmark has been described as a “negotiated economy” (Amin and Thomas 1996) as a result of this long tradition of incorporating diverse social groups into economic decision-making processes and additionally a low level of income divergence and culture of egalitarianism relative to other advanced countries.

While there is much in the Danish case that is historically and context specific to its particular associative and negotiated economy traditions (Amin and Thomas 1996), there are nevertheless important broader lessons, particularly in the way that supportive institutions at higher spatial scales (i.e. national) can promote and foster more localized and participatory forms of public ownership. Furthermore, a commitment to local participation in the ownership of wind turbines, and the restrictions upon multinational corporations’ abilities to profit, have been critical in mediating the kinds of conflict over such developments in environmentally sensitive areas elsewhere and offer important lessons for countries in the Global North and South in developing scarce resources in ways that incorporate local social actors.

Although, as noted above, neoliberal influenced governments at the national level may undermine some of the local collectivist ethos–for example, local ownership criteria have been relaxed since 2000 (Kruse and Maegard 2008–there are more deeply entrenched historical commitments to local participation and decentralization of economic power that continue to sustain the cooperative spirit.

As I rode my bicycle about in Northern Jutland on my lecturing tours before and during the last war, it was impossible to avoid noticing the many windmills on the farms. The farms were self-sufficient in electricity. At that time I did not know that this state of things originated in an idea issuing from the folk high school of Askov, and that it was not only a technical issue, but that a far-reaching social idea was behind it: Giant business corporations must never be allowed to monopolize the power production. It should be taken care of in small local communities and on the individual farms. (School teacher Richard Andersen in the 1950s, cited in Kruse and Maegard 2008: 132)

The development of renewables through local cooperatives is in stark contrast to the situation in the United Kingdom where, in line with existing policy, government initatives seem designed to favor large-scale projects that can only be financed by larger corporate players and – with a few exceptions – pay little heed to involving local communities. This is not only undemocratic but likely to slow plans for renewable projects through local opposition. As one group of academic experts have noted: “Public ownership and/or participation are essential for the success of specific projects as well as the development of effective renewable policies” (Sawin and Flavin 2004: 29).

8. Conclusion

In this paper our aim has been to contribute to the debate about progressive alternatives to neoliberal economics by returning to the subject of economic democracy and public ownership. As the underlying problems stemming from the impact of three decades of market deregulation and privatization policies intensify, an alternative political economy is needed now more urgently than ever. As the limitations of market models at delivering social justice and environmental sustainability become daily more evident, the case needs to be made both theoretically, as well as politically, for an economy run by and for people, rather than in the interests of a capitalist financial and political elite. Under these circumstances, it is important to develop an alternative socialist economics that at the same time retains a commitment to pluralism and democracy (O’Neil 2003).

Having highlighted the flaws in both pure markets and centralized planning in delivering greater economic democracy and participation, we argue here for the importance of institutional variety over prescriptive policy models in developing a socialist economics. A commitment to egalitarian values and principles that is capable of adjusting to different contexts in time and space is more important than the adherence to a “single truth” or vision. In this respect, we have restated the importance of knowledge, innovation, and experimentation in enhancing deliberative democracy and, hence, human rights. Unlike many socialist proposals, it does not present a utopian solution; instead it offers a framework for effective processes of addressing social problems in collective and democratic ways. It is inclusive, and its strength lies in the rejection of absolute assessments of value.

Our principles for public ownership also reject past forms rooted in social democratic and conventional Marxist thinking, which either delivered over-centralized and monolithic state entities that were far removed from the ordinary citizen, or revealed a productivist bias in favor of a disappearing industrial proletariat. Crucially, we have attempted to both update and rethink public ownership for the contemporary global economy as a challenge to the increased concentration of economic power within multinational corporations. This will – as our Danish case illustrates – involve a rethinking of the relations between geographical scales, providing organizational structures that enhance local democracy but retain the commitment to broader patterns of equity and distributive justice at the national and international scales. Finally, our approach is cast in the spirit of current anti-capitalistic thinking as an open and deliberative project (Holloway 2002) that seeks to work with the grain of accumulated local knowledge and insight rather than applying a universal model or prescription imposed by central diktat.