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Labour must think beyond the state

Image credit: modmedia.blog.gov.uk
Image credit: modmedia.blog.gov.uk
Image credit: modmedia.blog.gov.uk

If one believes the dominant narrative within the Labour party right now, the state is the only antidote to the ills of free-market capitalism. We are presented with a choice: more capitalism or more government. But the hard and uncomfortable truth is that we are paralysed and afraid: we see the corrosive effects of an unrestrained capitalist free-market which runs rough-shod over communities, culture, our very way of life, but we have no clue how to even begin to address them. And in our fear we are reaching out to the old solutions, the only ones we have ever known: we are a one-trick pony, whose only offer is more state control, an offer that is increasingly unpersuasive. This goes beyond Labour and goes to the heart of the crisis that social democratic parties find themselves in across Europe: we lack the imagination and the textual awareness to see that it does not have to be this way.

These parties largely accept or encourage economic globalisation, a process that is pushing communities into a global race to the bottom, uprooting and tearing them apart. People feel increasingly disconnected (to use an old term, ‘alienated’) from their work: According to YouGov, 37% of workers see their jobs as “meaningless.” But this need not be the case, and to see why we need only return to the fundamental principle of socialism from which all else springs: that it is those who work in businesses that should own and manage them.

This is the future, drawn from it’s radical roots, that the Labour Party must embrace wholeheartedly: the solution to the ills of the capitalist age are to give people greater power, not the state. Returning to the first issue I mentioned in my opening paragraph, the endless tragedy of poverty-pay, if workers had meaningful control over the operation of the business they work in, how it works, and how profits are distributed around the company, we would never see such gross inequalities of pay, with top executives receiving eye-watering bonuses while the workers who make the business tick aren’t even given a wage on which they can live.

Workers must feel valued as an integral part of the businesses in which they work. They must feel that there is a direct, causal link between how well the business does and how well they do; corporate profits cannot rise while their salaries and bonuses remain the same. People are not replaceable cogs in machines and it is time our economy and our businesses stopped treating them as though they are.

British co-operative companies such as John Lewis and Waitrose are brilliant examples of how well co-operative structures can work, with revenue increasing year-on-year. A business with over 90,000 employees and yearly revenue totaling over £10bn, every employee is a ‘partner’ in John Lewis. They all have influence on the business through local branches, with a directly elected Partnership Council who also elect five of the 12 board members. Every Partner receives an annual bonus, which is a share of the annual profit. It is calculated as a percentage of salary, with the same percentage for everyone in the company, and is directly linked to the company’s profitability that year. The company has social schemes for all workers, including golf and sailing clubs, publishes many internal magazines, and offers strong pension terms. Other European examples, such as the Mondragon Corporation, must also be considered.

The Labour Party must always be about giving everyone power in their communities and in their workplace: democracy should never end the moment you walk into your business. And it is only in a renewed focus on this radical democratisation of our economy that we can truly begin to reconnect with local communities from across the country: from metropolitan office-workers at faceless multinational corporations to rural physical labourers, totally alienated from the production chain.

People must have real stakes in their businesses, which are run by and responsible to the communities in which they exist and operate. People are tired of feeling that the businesses they work in don’t care about or value them, that the government exists in a bubble that ignores their interests and opinions, and are skeptical that more of the latter is a solution to the former. The Labour Party must commit to radical and far-reaching economic reform, transferring power not to the state but to people and communities. The old answer of bureaucracy is no longer fit for purpose in the 21st century.

Just 0.5% of British businesses are co-operatives: it is not enough to merely praise them, we must actively encourage their growth. Labour’s next leader must commit to tax breaks and financial assistance for businesses willing to convert to co-operatives, offer local services or branches to provide information and assistance to budding entrepreneurs or curious local businesses, and require worker representation on company boards, much like they have in Sweden and other countries. Rather than propose renationalisation of the railways and utility companies, propose to mutualise them, holding them directly responsible to the people who use them every day. Labour should galvanize the considerable power of the civil service and the enormous talent of our Labour Party MPs, members and councillors to come up with further ways to grow the co-operative sector of our economy. Westminster must accept that it does not have all the answers to our economic ills and should instead empower people to find their own.