Rethinking public ownership as economic democracy

Despite the spectacular failure of market fundamentalism in Europe and the US, with a seemingly never-ending spate of corporate scandals and financial crises, the grip of a neoliberal economic policy discourse among political and economic elites seems unshakeable. If anything, neoliberal policies of privatisation, labour market deregulation and state and welfare retrenchment seem to have been ratcheted up since the 2008-9 financial crisis. How can a left and more progressive politics– even in the form of a moderate eco-Keynesianism – be reasserted in these circumstances? This chapter argues that there has, until recently, been a serious vacuum in left and progressive circles about alternative economic models that might challenge the mainstream consensus. Cumbers uses the lens of public ownership, and examples from recent research in Denmark and Germany, to argue for the need to remake and re-scale institutional structures and practices on the left to successfully contest neoliberalism and construct more progressive, egalitarian and sustainable economies and societies.

A Brexit from neoliberalism?

This conclusion brings together key points from the alternative macro-paradigms in Part I, the institutional parameters and reforms to these, discussed in Part II– and the political and economic re-structuring advocated in Part III. It argues that a new social democracy is needed to achieve the rebalancing of the market-state-civil society relationship distorted by neoliberalism. This shift, should be based on democratization and accountability in the social and economic spheres as well as in conventional politics. A paradigm and practice drawn from and substantially driven by a social base rooted in recent social movements and more progressive NGOs. Applied to ‘fictitious commodity’ fields such as housing, finance and employment, its discourse would emphasis gender and practical environmental issues to ground a post-neoliberal politics in more relevant and popular concern than the stagnant, tendentious and often obscure abstractions of economic discourse. It is argued that the related ideas and policies could, at the least, achieve a regime change within contemporary capitalism. A change comparable to the social democracy which successfully displaced the market hegemony of the nineteenth and early twentieth century.

Turning the tide: a role for social movements

This chapter continues the book’s focus on social justice and change agents by identifying these concerns in the evolution of social movements. The authors argue that, in addition to making explicit criticisms of neoliberalism, social movement campaigners and their networks could also play similar roles to those previously taken by labour movement organisations as advocates and facilitators of classical social democracy. Their emphasis on more direct democracy in socio-economic governance might stimulate a revival of this recently neglected element in the social democratic tradition. In this respect the relationship between prominent social movement activists and progressive parties is likely to be crucial in future years. In particular movement activists may need to determine whether they can achieve a strong relationship between the progressive forces of civil society and a Labour Party potentially revitalized in its egalitarian and democratic vision. The key challenge is to channel the energy and idealism of civil society groups into more far-reaching political and social transformation.

Avoiding ‘back to the future’ policies by reforming the ‘foundational economy’

Johal, Moran and Williams outline a complementary strategic policy for business accountability to those of Jones and Cumbers. Criticising unrealistic ideas for state control of an increasingly nebulous and fragmented ‘national economy’, they point to the massive potential relevance of a ‘foundational economy’ of locally-based utilities and service provision. These sectors, which range from the ’para-statal’ outsourced public services into informal sectors, such as family care, employ up to a third of the UK workforce; often as low-paid – and female – workers. These concerns are mainly sheltered from the major pressures of international markets but many depend upon approval and quasi-regulation from public and local authorities; for example local council planning permission for retail establishments. So Johal et al recommend a form of re-embedded social accountability for these sectors, through forms of business licensing that is conditional on meeting key social criteria in community responsibility; e.g. for sourcing, training and payment of living wages. A national ‘constitutional settlement’, involving democratic deliberation and multi-stakeholder participation, should construct this foundational compact.

The European Union and the UK: neoliberalism, nationalist populism, or a cry for democracy?

The UK referendum result has thrown several of the assumptions of the neoliberal order into disarray. This chapter traces opposition to the EU back to its retreat from social regulation of its markets to a stricter neoliberal framework. It examines key features of the ‘Brexit’ vote in the referendum and the likely scenarios for an ‘independent’ UK. Contrary to some popular interpretations it argues that the vote does not express a widespread nationalist populism amongst the working classes. However, the outcome seems likely to favour a renewal of neoliberal trade and de-regulation outside the protective institutions of the EU.

The democratic deficit: institutional democracy

The central argument of this chapter is that to achieve the various radical and progressive goals O’Donnell and the book’s other contributors propose, will require a further extension and institutionalisation of democratic participation. A historical overview establishes democratic participation as inherent to the radical trilogy of liberty, equality and solidarity. This chapter proposes a fourth element in the development of democracy in addition to the legal, political and social democratic rights outlined by Thomas Marshall. The term used to describe this is institutional democracy which is defined as the maximum practical involvement of people, including in decision making and reward distribution, in the institutions that affect their lives. Direct democracy is the ‘ideal’ form of institutional democracy but the term also applies to a much more extensive deepening of democracy from, for example, establishing school councils at the micro level to reforming and renaming the House of Lords at the macro level. Institutional democracy therefore builds on the concept and practice of participatory democracy but is wider in scope and demands secure and generally legal, implementation.

The open-market society and its opponents: an overview

This chapter provides a description and critique of neoliberalism with reference to both its Chicago School and Austrian varieties. At neoliberalism’s core is the adoption of market solutions to social as well as economic problems. The Introduction outlines the growing global impact of neoliberalism as an economic, political and cultural ideology with particular reference to the United States and Britain. It then reviews alternative approaches to neoliberalism: social democratic, Marxist, and a range of policies and ideas emerging from social movement activism, including feminism and the green movement. In summary the chapter argues that neoliberalism has disrupted the trilateral balance of the state, markets and civil society and calls for a ’rebalancing’ in favour of the re-empowerment of civil society.

Neoliberalism and social democracy

In this chapter Colin Crouch pursues a social democratic approach to social order and equity in contrast to the relentless market nostrums of neoliberalism and the over-centralised solutions of state socialism. It addresses the vexed question of which social group, groups or movements, are best positioned to act as the key agent or agents to secure and progress social democracy. Crouch sets out the case for the needs and interests of women now being the prime ‘motors’ of change; partly analogous to the role of trade unions and labour organisations in classical social democracy. Citing lifeworld aspects, such as the work-life balance and the gendered division of domestic labour, Crouch argues that a refocused and revamped social democratic state is the best mechanism for improving these areas of popular concern. The trends and projections which Crouch identifies complement and ‘materialise’ the principles of ‘natural’ well-being argued for in Part I of the book and which, if implemented, could pave the way to wider social justice including greater economic equity.

Reform from within? Central banks and the reconfiguration of neoliberal monetary policy

At the level of national economies, Grahame Thompson probes the shifting role of central banks, particularly the Bank of England, in handling the manifest inadequacies of free-market economics in the wake of the 2008 financial crash. Although the Bank has not explicitly disavowed market orthodoxy, Thompson finds that there have been distinct shifts away from the practices initiated by the rise of neo-liberal monetary policy forty years ago. While seeking to pilot the UK’s financial system into a leading role in the international economy, the Bank, like its counterparts elsewhere, has also become both the key manager as well as regulator of the national economy. Its championing of ‘quantitative easing’ to try to stimulate economic growth could, argues Thompson, be compatible with the more radical ‘people’s QE’ advocated by the Corbyn camp in the Labour Party. While such a conversion may currently be beyond the mindset of the mandarin class, its possibility and the new-found pragmatism and powers of the Bank, suggests a non-neoliberal government and a reformed Bank, could pursue a more socially sensitive and progressive path.

The corporate cuckoo in the neoliberal nest: reconnecting civil society with big business

As this book’s Introduction explains, corporations and their controllers have been the principal, organisational beneficiaries of neo-liberal ‘freedoms’. In his chapter Jones describes the abuses of their enhanced powers and the protest campaigns which this aggrandizement has generated from social movement and civil society organisations. Jones identifies the gradual shift in these campaigns from pressure for corporate social responsibility (CSR) to more radical demands for corporate accountability. After reviewing the reform proposals of these and other advocates, he isolates the shareholder ‘ownership’ as the Achilles heel of executive and therefore, corporate power; at least in the UK. He identifies relatively modest proposals to adopt Swedish-style accountability to investors; provided these reforms include a guaranteed role for the small investors which could include civil society representatives and ‘stakeholders’ such as trade unions. Reforms which could concretise the Polanyian forms of social re-embedding set out in O’Donnell’s and other chapters, particularly the Conclusion to this book.