Corbynism, models of ownership and industrial democracy

On 10 February the Labour Party held a conference to discuss its Alternative Models of Ownership documents. We will carry reports of that event soon. In Clarion 12 our editor Simon Hannah, who is also joint secretary of Lambeth Unison, discussed the issues behind Labour’s proposals.

Considering how far neoliberalism eroded any concept of workplace democracy and set back the trade union movement, it is perhaps understandable that Corbynism starts off from a far less radical place than some of Labour’s previous positions.

Nevertheless we can look to put it in context in the historical debates. “What Corbynism is” has yet to be really theorised, as partly it is a product of the battle with the Labour right over what policies the party will adopt. John McDonnell and Jeremy Corbyn both come from a transformative wing of the party, committed to public ownership and — in a general, undefined way — socialism.

And the leadership are clearly ambitious. McDonnell has said they want to outstrip the Attlee government in the extent of their reforms.

Challenging privatisation

In 2016 McDonnell put forward the idea that workers should be able to buy shares in their companies or club together and take over companies that go bankrupt.

Placing himself in the tradition of decentralisation and local democracy, McDonnell said that Labour had to “changing the rules of the game”. Taking over bankrupt companies is similar to the movements we saw in the late 60s and early 70s where work-ins occurred to take workplaces over. That would only be effective though if the enterprises where brought into public ownership. Otherwise a small workers owned co-op probably wouldn’t survive in an economy dominated by multinationals and already established businesses.

There was concern over Labour strategy when Port Talbot steel became bankrupt. McDonnell said that under a Labour government the steel works would be taken over temporarily, stabilised before being returned to the market. This is merely a return to the old Labour right’s policy of seeing nationalisation as a short term solution to a capitalist problem, not as an alternative to capitalism itself. Why not just take steel back into public ownership but under the control of the steel workers themselves?

Despite these misgivings, a briefing document was published in early 2017 which offered up a series of very interesting proposals. Alternative Models of Ownership, commissioned by John McDonnell and Rebecca Long-Bailey the Shadow Secretary of State for Business and Industrial Strategy, outlines three possible alternatives to privately run businesses: cooperatives, municipal and national ownership.

Now in a sense this is nothing new. Co-operatives have been with us almost as long as capitalism has and made up a huge social and economic movement in the 19th century before they collapsed partly under competitive pressure from the private sector. Municipal forms of ownership were also very popular for years, sometimes contemptuously described as ‘gas and water socialism’. And nationalisation was a pretty standard form of public enterprise between 1945 and the 1980s.

Of course after 40 years of neoliberalism and worship of the free market, any argument for encroaching upon the untrammelled power of the private sector is welcome. In this sense the proposals appear very transformative in today’s context.

The proposals are couched in the language of increasing investment, boosting productivity and preparing the economy for further automation. All worthy ideas.

Co-operatives

On the concept of workers’ control, the report argues that co-operatives are always more democratic as they are voluntary endeavours usually organised without strict hierarchies. The document cites several examples of co-operatives, including Mondragon in Spain, the world’s largest cooperative.

The problem of co-operatives is that they still operate in a global market economy where they have to compete with enterprises that often have more resources and access to more capital. Mondragon has been force to lay off staff and ended up creating a two tier workforce with different levels of workplace benefits in order to survive. 20 per cent of the Mondragon workforce are on short term, part-time contracts whereas others were on full time contracts.

In addition the company has expanded into countries like Brazil and established factories where the employment relations are essentially capitalist, those ‘foreign’ workers are not considered members of the co-operative.

An article on the New Socialist blog on the Alternative Models of Ownership document argues that workers’ co operatives clearly have limitations under capitalism – they do after all have to compete with the private sector which, as described above, can lead to the logic of capitalist accumulation penetrating your cooperative despite your best intentions. However they conclude that “cultivating values of empathy, co-operation and charity” are worth doing in a prefigurative sense, as a way of generating collective consciousness under capitalism, even if cooperatives can only go so far as alternative models; “the left needs to focus on questions of culture and socialisation every bit as much as questions of economic control and planning.”

Fostering a culture of anti-capitalist workplace organisation would certainly help in a world dominated by Starbucks style consumerism, the gig economy and very long working hours, but the logic of cooperatives can only essentially work in a transitional phase towards a more socialised economy in general. At their best they might be considered a vanguard but unless there are radical anti-capitalist measures being put into place across the economy, cooperatives might end up as a forlorn hope, helpless to withstand the rigorous profit driven challenge of leaner, more hungry rivals.

Increasingly cooperatives would have to be protected by the state through legislation or a degree of nationalisation to prevent them either being co-opted into private sector capitalist property relations or rendered so uneconomical and therefore redundant.

The danger is that a Labour government has to provide huge amounts of funding to the co-operative sector just to keep it going, but most cooperatives will be small and medium sized enterprises, often the least productive or profitable parts of the economy.


Nationalisations after WW2 brought improvements in workers’ conditions but very little democratic control

Lessons learned?

The document talks extensively about forms of national ownership and correctly makes the points that the old post-war forms of nationalisation where too bureaucratic, too top down, too unresponsive and too much at the service of the continued expansion of the private sector.

As such the proposal is to prioritise forms of national ownership that are more democratic – a perfect opportunity to engage with forms of workers’ control. The document proposes one method might be that adopted by the French nationalisation of gas and electricity in the 1940s, namely a twelve person board which “was made up of four appointees from the state, four from technical and expert groups (including two to represent the consumer interest) and four trade union representatives”.This would be a model that excluded a separate management structure but included direct representation from the state. This is effectively what the Socialist League argued for in the 1930s – a radical alternative to the present but still leaving the bosses essentially in charge.

The key issue for elaborating arguments around genuine workers control is the superiority of working class control over the methods of production in terms of workplace democracy and also production for need. The working class has no interest in maintaining profits for a super-rich, super few. It is precisely in the mass collective nature of the working class that a potential future outside of capitalism exists.

From below

But such changes to the economic management of society cannot come from on high, as Michael Barratt Brown and Ken Coates argued in 1969 “workers’ control will be literally meaningless unless it is thought about, argued about and developed by the workers themselves precisely out of their daily experience of work”.

This poses once again the question for a Labour movement and not merely the Labour Party – can we generate these kinds of debates and discussions from below? Any successful moves towards stimulating those debates and generalising the conclusions can be facilitated by the Labour Party but without a grassroots movement of worker intellectuals there will be inevitable problems.

The major one will be the conservative pull of the trade unions. Hugh Scanlon may have been president of the Amalgamated Engineering Union when he penned a pamphlet in 1968 calling for workers’ control, but those were different times, different figures and a different union movement. Today our unions are sclerotic, tamed, bureaucratic institutions, dominated by people who recoil at independent working class activity or action. There are some notable exceptions but largely the unions are exactly what the bosses want them to be, service providers and case work managers, not class struggle organisations. Creating a movement for workers’ control will have to happen against the union bureaucracies; they are so conservative and narrow minded they have no interest in anything but the most naive Keynsianism or a return to a 1950s style mixed economy. But at least the debate has been opened up and the ‘single idea’ of neoliberalism is finally sinking.

Now socialists have an opportunity to raise radical new visions of industrial democracy, not as an abstract utopianism but as a struggle for a different form of society where work is no longer alienating and decision making happens away from corporate and political elites.

• Read the Labour Party’s report here.

Let us know what you think! Write a reply? theclarionmag@gmail.com

2 Comments

  1. The article rightly points out the difficulties of promoting co-ops in a capitalist market. Tony Benn tried it as Industry Secretary and they sunk without trace. We need to have public monopoly – in other words nationalisation of whole sectors – instead. Yet it is precisely public monopoly that the European Single Market outlaws in key sectors – in legislation which is effectively impossible to repeal.

    As for workers’ control, one has to be mindful of the need for a national planned economy and how the balance is to be struck. A planned economy, fashioned and constantly refashioned not by the super-rich but by a democratically elected and accountable government and a democratic Labour Party, is actually the heart of democratising the economy.

    1. Re the difficulties with cooperatives, might the ‘Preston Model’ have been a useful example here? Could it be thought of as a hybrid municipal cooperative? Ouch though, that sounds like a postmodern model, and thus more of a simulacrum than a real alternative – and has its roots in the US rust belt. Nevertheless, slightly disappointed the author didn’t include Preston as it surely deserves more thought.

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