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Pat Devine
© Pat Devine
2007
Historically, socialism was seen as an alternative to capitalism, a
new way of organising society, not least economic activity, based on
a new set of values, a vision of a good society based on freedom, equality
and the planned use of society's commonly owned productive resources
to meet human needs. The socialist movement was the movement working
towards this end, overlapping with the labour movement but not coterminous
with it. In right social democracy, socialism became transformed into
a set of values to be achieved within capitalist society (see Anthony
Crosland, The Future of Socialism 1956). The rise of neo-liberalism
and the historic failure of Soviet-style state planning have now resulted
in the embrace by much of left social democracy, as well, of private
ownership and market competition as the principal means of organising
economic activity. Finally, New Labour has extended market principles
and values into the heart of the welfare state, creating a social crisis
or recession which has resulted in Feelbad Britain (www.hegemonics.co.uk).
The progressive, democratic left gathered around Compass and Soundings is understandably not happy with this. Hence, Compass's three programmatic statements - The Good Society, A New Political Economy, and Democracy and the Public Realm, and the three sessions at Soundings' forthcoming conference - "Countering the Social Recession", "Financialisation and Globalisation", and "New Political Strategies". However, none of these addresses the central dilemma posed by Michael Kenny in his review of the Compass statements "if not state planning, nor the market, then what can be the agent and embodiment of progressive economic governance and public management?". This contribution offers a possible answer to this dilemma in the form of the concept of social ownership.
Faced with the shortcomings of state ownership, there were two possibilities - to move forward to social ownership, or backward to private ownership. Confronted with the weaknesses of top-down state planning, there were also two possibilities - democratisation or marketisation. One of the reasons why neo-liberalism, with its programme of privatisation, deregulation, commodification and consumerism, triumphed was the failure of the left to develop an alternative perspective of radical democratisation based on social ownership and participation. Social ownership is best defined as ownership by those affected by the use of the assets involved, in proportion to the extent to which they are affected. It has much in common with the green concept of stakeholding. Following the principle of subsidiarity which underpins the multi-layered governance structure of the European Community, on this definition the social owners will be different according to the level,and the reach, of the decisions to be made. At each level, the social owners need to negotiate with one another to agree on what is in their collective social interest, as defined by them.
This governance structure can be illustrated in relation to health and education. Primary Health Care and Hospital Trusts would consist of representatives of the relevant social owners: elected by local community groups, patient groups, medical and support staff; and appointed by other, interdependent, Trusts, relevant Local Authorities, and Area or Regional Health Committees. They would decide on the use of the resources made available through the democratically decided national allocation process. The Area or Regional Committees, which would be responsible for planning health care provision in their jurisdiction, allocating resources accordingly, and ensuring that nationally agreed universal standards were complied with, would in turn consist of representatives of the relevant social owners at their level - community and patient groups, the various Trusts and Local Authorities covered by them, and representatives of the regional or national government bodies responsible for health policy and monitoring standards. Such a governance structure, combining direct representation of people as members of affected groups and indirect representation of people as citizens, would enable pluralism and universalism to coexist and reach decisions through a democratic process of negotiated coordination. A comparable structure for education and the public sector more generally can readily be envisaged.
Can the same principle be applied to what is currently the private sector? How could negotiated coordination by social owners at different levels be extended to the production of goods and services that are not supplied free at the point of use? At the enterprise level, social ownership would embrace the workers in the enterprise, the communities in which it is located, the users of its output, other enterprises in the same industry, major suppliers, advocacy groups concerned with equal opportunities and the environment, and so on - those with a legitimate interest, or stake, in its activities. Enterprises would normally compete with each other, using their existing capacity, and their performance would be one indication of whether they were producing what users wanted. When it comes to investment or disinvestment, however, to changes in the structure of existing capacity, a different set of social owners is involved.
Investment and disinvestment decisions affect existing enterprises, their workers and the communities in which they are located. In capitalism (and market socialism) this comes about in an unplanned way through the operation of market forces, with individual enterprises making their own decisions, profitable enterprises expanding and less profitable ones contracting or closing. In a socialist economy, the social owners at the level of the industry - the existing enterprises, representative of relevant local communities, trade unions, user and advocacy groups, etc. - would negotiate the pattern of investment for the industry as a whole, taking account of technological and demand changes, the performance of existing enterprises, and the circumstances of the different local communities potentially affected (planned new jobs, congestion, etc.). The negotiated coordination body would have available to it not only publicly available information but also detailed knowledge provided by their representatives of the enterprises and communities involved, allowing an efficient use of local knowledge. The same principles would apply at all the different levels of decision making, up to the global, as defined on the basis of the principle of subsidiarity.
In this model, the coercion of market forces or of the bureaucratic state is replaced by a political process of deliberative democratic negotiation.
For a fuller outline of the model, see Pat Devine, Democracy and Economic Planning 1988, "Participatory Planning as a Deliberative Democratic Process: A Response to Hodgson's Critique" (with F. Adaman), Economy and Society 2001, "Participatory Planning Through Negotiated Coordination, Science & Society 2002, and "The Promise of Participatory Planning: A Rejoinder to Hodgson" (with F. Adaman), Economy and Society 2006.
See also Pat Devine, 'The 1970s and After: The Crisis of Social Democracy', Soundings Issue 32, 2006
Pat Devine is an Honoury Research Fellow at the University of Manchester. He is one of the authors of Feelbad Britain (www.hegemonics.co.uk).
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