Traditionally Marxists (and socialists in general) have supported and argued for public ownership of the “means of production”. I’m proposing we make a change here, not to our demand for public ownership but what we mean by that. The dogmatic Marxists argue for a centrally planned economy, but this ignores the fact that any attempts to create a centrally planned economy have failed. I made the point here that one thing the capitalists got right was the importance of competition, so I was pleased to read a genuine socialist and economic expert like Paul Auerbach say something similar in his latest book “Socialist Optimism”. This summary by Auerbach of his arguments against the traditional socialist model of public ownership are helpful here:
The failure of the Soviet economic experiment was not due to historical accident or contingent events, but resulted in weaknesses inherent in the concept of central planning as it emerged from the technocratic planning paradigm. In the debate on socialist calculation, a solution to the problems of centrally planned socialism was put forth: an alternative form of socialism was created that simulated the economic behaviour of a well-functioning capitalist free market. The ultimate demise of both these attempts at socialist construction – the Soviet centrally planned alternative to capitalism and the market socialist solution of economic theory – is to be located in their inadequate conceptualisation of capitalist economic development. They both foundered on their failure to understand the roles played by competition and finance in the fostering of dynamism, economic growth and development in capitalism.
So the question becomes this: how do we reconcile the justifiable socialist demand for public ownership with an economic model that preserves the roles played by competition and finance in capitalism? My proposal is that we use the practice of shareholding for the purpose of public ownership. This isn’t very revolutionary as such, many local governments (for example) already use shareholding to raise revenue for their pension funds, although the exact details of who owns shares in what company is notoriously difficult to ascertain. What I am suggesting is we use this practice in a more direct and democratically accountable way.
So here is the proposal: all shareholders will surrender 10% of their shares to a democratically accountable public body which will be set up to manage the collection of this revenue (some work will need to be done on establishing the details of this company, but if the proposal is accepted in principle we can work on filling in the blanks later).This public body will also be responsible for observing corporate behaviour, and any companies which fail to live up to ethical standards (such as worker’s rights, environmental responsibility, etc) will see their shareholders have to surrender further shares (with perhaps a limit of 51% of the total shares in any company being held publically).
I see this proposal as having two main benefits. First it would be an immediate source of extra income for public spending. At current levels of dividend payouts the initial 10% figure amounts to about £8.46bn per year (going by these figures). That is about 1% of the current government income (from taxation) and the total can obviously fall or rise according to how the market performs, but will be much needed revenue for the public sector regardless of how much is actually collected.
The second benefit is that it gives us a degree of democratic control over these private businesses, control that is currently badly lacking. These companies have a great deal of influence over our everyday lives, but we have no way of influencing their decisions. This proposal gives us that influence. If shareholders are in danger of having to surrender more shares because of the companies behaviour then this proposal will encourage shareholders to pressure companies into behaving ethically, rather than simply demanding larger and larger profits.
I hope that this can serve as the start of a discussion inside and outside the party on this topic. Currently very few politicians are talking about public ownership, and while it may not be my proposal that wins popular support I hope to at least help put public ownership back on the agenda. I will also be taking this to my branch with the intention of putting together a motion for a future party conference, assuming branch is in agreement with me. I ask for genuine feedback on this proposal, although constructive criticism will obviously help with putting together a stronger motion.