Towards Democratic Public Ownership In The 21st Century

The Unfolding Crisis

As we enter the second decade of the new century, signs of crisis are all around us. We have only a matter of years to act decisively to mitigate the worst effects of accelerating global heating and ecological collapse; economic inequality in many parts of the world has reached levels not seen for a century; workers’ wages and rights are under siege with the rise of precarious employment and the decline of union strength; corporate power and rentierism is growing more pervasive as industries consolidate and financialisation tightens its grip on our economic and political systems; racism, misogyny, and xenophobia remained entrenched in our societies; neo-fascism and right-wing populism are gaining political momentum; and democracy is seemingly in retreat across the globe.

These are not simply unexpected byproducts of an otherwise healthy economic model. The entwined crises we face share a deep-rooted common cause: the undemocratic concentration of power in our economy, an economy that is extractive and unequal by design. Workers lack a meaningful say in their workplaces or a fair share of the wealth they create. Voting rights in the economy are near-monopolised by a web of institutional investors and executive managers whose interests more often than not do not align with the common good. And the owners and intermediaries of capital are privileged over the needs of labour and nature.

Despite the veneer of a prosperous recovery from the great financial crisis a decade ago — record stock market highs and low unemployment, for instance — many people rightly feel the economy no longer works for them and that the rules are rigged. This is contributing to a deep popular disenchantment and realignment that is reconfiguring our politics and societies.

Meanwhile, new technologies — which could usher in a new era of shared prosperity — currently amplify and reinforce existing inequalities of power and reward. The internet, which holds the power to connect people to all of history’s accumulated knowledge in nanoseconds, is increasingly controlled and manipulated by what are essentially large advertising corporations; social media platforms, which can bring people in communities and across the world together in unprecedented ways, have turned into engines of disinformation, distrust, and division in the hands of their corporate masters; and the sharing economy, which promised a future of more equitable consumption and provision, has turned into a dystopia of precarious work and wealth extraction as Silicon Valley corporations, backed by giant Wall Street investment firms, run roughshod over local economies and governments.

Marginal tweaks won’t address these deep imbalances. Instead, challenging corporate power and restoring agency and dignity to workers and communities will require the confident use of tools neoliberalism has long sought to neuter: collective action, ambitious public investment, strengthened labour power, democratic planning and democratised workplaces, the deliberate scaling of a pluralistic landscape of common ownership, the commoning of resources, and the extension of the public realm and shared ownership in place of private consumption.

Underpinning all of this must be the concept of genuine democratic ownership and control. This is because patterns of ownership are at the heart of every political economic system. Ownership is key to determining how power, agency, and wealth is distributed in our communities and underpins all other aspects of our lives. The centrality of ownership was acutely understood by the architects of the neoliberal project, which prioritised and undertook a massive global effort to shift ownership from public to private hands.

Our present multiplying and interconnected crises are deeply entwined with the particular ownership model that came to dominate during the era of neoliberalism — the large, for-profit corporation, controlled by and for a nexus of executive management, the asset management industry, and wealthy shareholders, which operates in a deliberately shrinking oligopoly of companies on the one hand, and large shareholders, on the other.

The problems this model of ownership generates are varied and well-documented: reducing the power of labour and the growth of real incomes through offshoring, internal relocation, and hostility to unions; transferring wealth, control, and agency from the many to an elite few; externalising social and environmental costs; enshrining shareholder value above all other considerations; transferring property from the public and the commons to private hands; relying on unwaged labour in the household to support production and consumption in the market; decimating local economies and small businesses; using market and political power to block competition, dismantle regulations, and drive up inequality; exploiting offshore tax havens and other tax avoidance mechanisms; and establishing tax and incentive structures that promote financial speculation over productive investment.

In all, an overriding ethos of short-termism and individual gain permeates the dominant contemporary model of business ownership, rather than any sense of the public good or social mission. Even groups like the Business Roundtable, representing the interests of many of the world’s largest corporations, are beginning to see the limitations (and effects) of this model. In August 2019, the group put out a statement signed by 181 CEOs stating that “shareholder primacy” (the idea that corporations exist principally to serve shareholders) would no longer be part of their Principles for Corporate Governance.

However, timid tweaks to this model will not alter structural problems and their effects. It is hard to imagine the world’s largest corporations — including arms manufacturers, drug companies, internet platforms, banks, and fossil fuel interests — suddenly abandoning the business model that has made their owners fabulously wealthy and voluntarily re-purposing themselves in the interests of working people, communities, and the planet. Indeed previous efforts around Corporate Social Responsibility have at best yielded mixed results, and at worst has been cover for corporate malpractice and exploitation.

We must comprehensively break from this interconnected system of large corporations, wealthy investors, and authoritarian employment relationships that is focused almost entirely on profit and accumulation, and instead extend democratic governance into all aspects of economic life, repurposing enterprises and assets to serve social and environmental needs over unequal accumulation.

Fundamental to this systemic change must be a deep institutional turn in ownership and control to democratise economic and political rights within the economy.

In place of a narrow monoculture of ownership forms, we should scale a pluralistic ecosystem across the full spectrum of assets, resources, enterprises, and services that, collectively, transfer wealth and power from the hands of the few to the many. But broadening ownership is not enough; to address the feelings of disempowerment many feel, we need to democratise economic power. That means transforming the internal structure of institutions to give people and communities real, genuine agency and control over the critical decisions that impact their lives. The goal is simple but transformative: a deep and purposeful reorganisation of our economy so that it is democratic, sustainable, and equal by design.

This type of political-economic restructuring may seem radical, but it is commensurate with the scale of the challenges we face. More than that, deep change is both necessary and possible. To borrow a phrase that is popular among the “moonshot” seeking executives of Silicon Valley, and commonly ascribed to the head of Google X Laboratories, “it is often easier to make something 10 times better than it is to make it 10 percent better.” The company — alongside other property regimes — is a social institution, its extraordinary powers and privileges publicly defined. We can organise it differently: through democracy, not oligarchy. Examples of different, successful models and important precedents abound throughout history and even in our contemporary economy. We are neither powerless, nor lacking for ready-to-hand alternatives.

We also cannot simply limit our imagination and efforts to the economic sectors that we know have been conducive to more democratic forms of ownership and control in the past. Just as innovative models of public ownership, planning, investment, and regulation emerged to build the infrastructure and technologies of the twentieth-century economy, we need the same ambition and vision for those that will form the basis of the twenty-first. Moreover, the scale of the intersecting crises we now face demands that we use and deploy those technologies to deliver a far more equitable, democratic, and ecologically sustainable society.

To that end, The Democracy Collaborative and Common Wealth have begun a project that will last the course of 2020 to explore the new frontiers of public ownership in the twenty-first century. We will develop policy ideas in four areas where existing structures of ownership amplify corporate power, erode workers’ rights, increase inequality, and accelerate the climate crisis: digital infrastructure, IP and R&D, data and platforms, and land and natural resources.

While this initiative will focus on the US and UK, seeking to influence policy dialogue and outcomes from the national to the local level, we hope that it will also be useful and informative to our partners, friends, and allies around the world. We will set out a concrete, credible policy playbook in each area rethinking democratic public ownership of the new commanding heights of the economy to build a society that works for all.