It is not enough for the left to bemoan social-democrats? abandonment of any socialist or even specifically meaningful policies. Is neither enough to speak in general terms of the need for radical and socialist policies. The left must elaborate a feasible alternative programme in specific terms.
It is the highest time to spell out concretely what should be done by a socialist government, not in the distant future, but in the actual present. To quote Alec Nove 1, it must define a ?feasible socialism? conceivable in the lifetime of a child already conceived.
It would be utopian to imagine that a fully developed socialist society could be established overnight. The best we can hope for is to begin the transition to such a society starting from where we are now. Given the globalisation of the economy, it is also evident that such a transition cannot be successful on a narrow national base, but requires to be carried out on at least a European scale. Therefore the programme outlined below must be campaigned for and applied within at least the European community, and as much as possible beyond Europe.
It is now generally acknowledged that the top-down, bureaucratically run command economies of the Soviet Union and its satellites were neither socialist nor viable, and that top-down bureaucratic nationalisation, as introduced by the postwar Labour government in Britain, is not the final answer either. State ownership in and of itself is not socialism, especially in the absence of political pluralism and democracy.
A general consensus seems to be emerging that while some strategic industries and services may well be best administered centrally, the whole of the economy need not be state-owned. Cooperatively-owned, democratically self-managed autonomous enterprises liaising with each other through market mechanisms, and with local communities and interest groups having an input, might be a better form of ?social ownership?. See, for example Pat Devine?s ?Democracy and Economic Planning?, the Common Ownership After Clause Four conference held in Manchester in September 1995, discussions in the Red-Green network, and Alec Nove?s ?The Economics of Feasible Socialism?.
Overall planning at the macro level to ensure environmentally friendly and sustainable growth would be conducted through a democratically-agreed national and/or regional plan financed through a publicly-owned banking network.
A new programme should comprise three main strands:
- the democratisation of economic life at the grassroots,
- overall planning and coordination,
- the democratisation of the state.
Democratising the Economy
Large business and strategic sectors are to be nationalised
Some industries and services, because of their very nature and/or monopoly position, operate best as centrally-administered large interrelated units, for example, the railways, energy generation (gas and electricity) and the oil industry. They should be taken back into public ownership.
However, unlike previous nationalisations, there should be provision for employee representation and participation in management decisions, and also a meaningful participation by the users (gas and electricity consumers, passengers) in decision-making. The exact method of representation of employees, users and other interested groups (for example, localities in which the enterprises are located) would need to be worked out in detail, as well as procedures for reconciling or mediating conflicts of interest.
Other forms of social ownership
Otherwise, firms not suitable for state-owned centralised administration and employing (say) over 50 people could operate as cooperatively-owned autonomous self-managed enterprises engaging with each other and consumers through market mechanisms. The boards of these self-managed enterprises would be composed of elected representatives of the stakeholders, that is to say, the workforce and — where appropriate — other groups affected by their operations (for example, local communities and residents whose environment might be affected by the operations of the enterprise).
This might be done by allocating seats on the management board to local residents? associations, local authorities and community groups. The management boards, thus constituted, would appoint and employ professional managers, technicians, accountants, etc. These enterprises would aim to be commercially viable and self-financing. The allocation of profits to further expansion or distribution among the stakeholders (the workforce, local communities, etc.) would be decided by the management boards, subject to discussion and ratification by the stakeholders.
We should say to all politicians who talk airily about a ?stakeholding society?: Fine! Let?s turn these sound bites into reality. If you are serious about stakeholding, give real power to the stakeholders ? the workers and local communities. This is how we propose to do it. What do you suggest?
What should happen to the existing owners? We need to distinguish between private owners and shareholders. That is to say, capitalists on the one hand, and institutional shareholders such as pension funds which represent the savings and contributions of ordinary working people on the other.
As far as the capitalists and fat cats, whose wealth results from the past and present exploitation of workers, share options and the like, are concerned, it could be argued that outright confiscation might be natural justice. However, in an attempt to minimise the inevitable opposition of the rich and powerful and in return for acceptance of these measures and cooperation in the changeover to a democratic stakeholding economy, a socialist government could offer compensation in the form of changing existing ordinary shares into bonds or debentures paying a fixed rate of interest payable out of profits 2.
Nevertheless, in order to placate small and medium shareholders and isolate the really rich, this form of compensation would be justified. A really serious socialist government would say to big business: Fellows, the choice is yours. Either you accept the will of the majority and get some compensation, or you oppose and sabotage it ? and get nothing!
Obviously, the detailed elaboration of a legislative programme will need to be worked out with political organisations and trade unions calling on the specialised expertise of economists and lawyers. But that itself is by no means sufficient.
Recognition of the programme
A top-down imposition of such democratisation of industry would not work unless the mass of the working class itself was imbued with a consciousness of its necessity, prepared to struggle for it, and prepared to participate in its functioning. This is why a campaign at grassroots level, within the unions and on the shopfloor, among office workers and supermarket employees, etc, is necessary.
In the 1960s and 1970s the Institute for Workers? Control 3 coordinated the activities of trade unionists and shop stewards in pushing the idea of workers? control. A revival in some form of such a campaigning body should be considered. It could be called A Campaign for Social Ownership and Real Stakeholding. It could also provide a framework in which socialists and greens within the social-democratic parties, the trade unions, the green movement and other organisations could work together.
Pension funds and insurance companies must be democratised
A large proportion of shares are owned by institutions such as pension funds and insurance companies, and represent the savings and contributions of millions of working people. These could well remain in the hands of these funds and companies, but they need to be democratised. Detailed proposals for democratic representation of pension contributors, existing pensioners and the insured, and how to fit them into the new economic structures, need to be worked out with the help of experts in these fields.
Finally, privately-owned firms employing less than 50 people would continue, but would be obliged to recognise trade unions, measures against unfair dismissal, etc. Self-employed builders, craftsmen, shop keepers, etc., would also continue to operate.
- Aleksandr Yakovlevich Novakovsky (24 November 1915 — 15 May 1994), Professor of Economics at the University of Glasgow and a noted authority on Russian and Soviet economic history. More >>> ↩
- One of the arguments of the New Labour leadership in UK, in the late nineties, against committing themselves to renationalisation of the privatised utilities and railways is the cost of buying out the existing shareholders. This is a false argument since the exchange of the existing shares for interest-paying bonds does not involve any actual transfer of money. This, in fact, is what happened when the 1945 Labour government nationalised the railway companies. Shares in the railway companies were simply exchanged for transport stock paying a fixed interest. Left wingers at the time complained that this was too generous, since the private railway companies had not paid out any dividends since the First World War, and the interest payments were an intolerable extra burden on the nationalised railways. ↩
- British organisation formed in the 1960s with the intention to establish a coordination platform of various workers?-control groups throughout the country. The organizational existence of the Institute for Workers’ Control dates from the eventful spring of 1968.