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In August 2019, a group of 200 chief executive officers of major U.S. corporations, calling themselves the Business Roundtable, issued a statement committing to invest in their employees, compensating them fairly, and providing benefits. They also committed to fostering diversity, and inclusion, dignity, and respect. And this was newsworthy given that corporations registered in Delaware are legally mandated to put shareholders—not employees, consumers, suppliers, or communities— first. But to be sure, this wasn’t King Arthur’s Roundtable, and the Holy Grail wasn’t the public good. What was framed as corporate social responsibility and made waves in the media was soon debunked by an academic study as empty rhetoric. In fact, one of the knights at this roundtable was Jeff Bezos who raked in $97 billion dollars in the first months of the pandemic by jacking up prices on essential items by up to 1000% while denying hazard pay and paid sick leave to over 450,000 of his workers. The ownership model of the public corporation that dictates profit maximization should no longer be the default or aspiration for startups in the digital economy. I do think that ownership is at the heart of the current convergence of crises. You might agree. That’s why I invited you to this conversation to think through your concept of ‘public ownership.’
Thomas Hanna:
Hi Trebor. I am a big admirer of your work and I very much appreciate this opportunity to dialogue. Like you, I believe that patterns of ownership are at the heart of many of the deteriorating economic, social, political, and environmental trends our system is currently producing. More specifically, since the 1970s, we have witnessed a massive global shift in the ownership of assets, services, and businesses to private hands through the intertwined processes of privatization, marketization, and liberalization.
I believe that these processes must be reversed and that we should move towards a “democratic economy” that distributes ownership and control of economic assets far more equitably than in our current system.
Public ownership is one alternative ownership form that I believe should play a prominent role in this democratic economy. For me, public ownership refers to assets, services, and enterprises that are owned collectively by all people in a specific geographic area, and managed either directly or through representative structures. This can include more traditional forms whereby government at various levels manages the enterprise on behalf of the public, as well as more and innovative ideas around democratic public ownership and the commons.
While some modern conceptions of public ownership are broader, and include most non-private and not-for-profit forms of ownership, I believe that it is important to distinguish public ownership not just from private businesses, but also from cooperatives and other forms of democratically owned enterprises that are owned and managed by some subset of the population.
In addition to distributing the benefits of ownership as broadly as possible, one of the key benefits of public ownership is that it is a flexible ownership form that can be used to address whatever needs are prioritized by a local population. Most importantly, this means that publicly owned enterprises are not necessarily constrained by or beholden to market imperatives — such as growth, profit, and competition.
In my 2018 book Our Common Wealth, I detailed the surprising scope of public ownership in the US. This includes thousands of electric, water, and gas utilities, all commercial airports and most ports, around one-third of all land, real estate and marketplaces, all intercity passenger railroad service, several massive sovereign wealth funds, most of the country’s public transportation systems, around 500 broadband internet networks, the Post Office (with around half a million employees and facilities in almost every community), the Bank of North Dakota and the North Dakota Mill (one of the largest grain mills in the US), and much more.
TS:
Thank you for this introduction. Could you make your concept of public ownership a bit more concrete for me? Perhaps you could provide a few more illustrative examples that show its actuality? Do people really have control or genuine governance rights —even through representation—over one-third of all land as you are suggesting? Isn’t this, just like participatory democracy, more of an aspiration than reality? I don’t feel like I have control over any commercial airport on earth, not even in an abstract sense. I would really need to see more evidence for these claims of growing public ownership around the world.
Take the Post Office, which is owned and operated by the government, may at this point be harshly underrepresented people in rural America who heavily depend on it but may soon have no more services. Public services by definition are not outside the dynamics of capitalism. The Post Office very much has to compete with UPS, FedEx, and DHL. Is public transportation not also composed of top-down organizations? And while larger cooperatives are sometimes demutualized, public institutions are frequently privatized.
TH:
These are all really great points and observations. First and foremost, I do believe that there is evidence for a resurgence of interest in public ownership around the world. For instance, the Transnational Institute (TNI) has found that in recent years there have been more than 1,400 municipalizations and remunicipalizations (taking services and assets into public ownership, usually at the local level) across 2,500 cities in 58 countries. Moreover, due to the difficulties of data collection, this is likely to be just the tip of the iceberg. Here in the US, we have seen the emergence of a vibrant public banking movement that has scored a number of recent successes, most notably in California, as well as rapidly proliferating efforts to take electric utilities into public ownership to deal with the climate crisis (a strategy that has proved effective in Germany and elsewhere). That all being said, whether or not this proves to be a tipping point against privatization is, I think, yet to be seen.
To your point about the traditional governance structure of public ownership, I wholeheartedly agree. Simply defending and/or expanding to public ownership is only one part of the puzzle. Many traditional forms of public ownership have been overly top-down, managerial, opaque, and unaccountable (the traditional “state owned enterprise” model, for instance). While there is often a modicum of public control through representative government, on a whole this has been sorely lacking in most public enterprises.
I believe that what is needed is a new model of “Democratic Public Ownership” that establishes worker and community participation and control, increases transparency and public accountability, and enshrines values such as equity, sustainability, and social benefit (among others). Democratic Public Ownership, therefore, combines the distributional benefits of widespread ownership with the individual and collective benefits of increased empowerment and agency. As my colleague Andrew Cumbers and I recently detailed in a report to the UK Labour Party, there are numerous examples around the world (and throughout history) from which to draw on when considering how to advance and develop this concept.
One example is the highly successful, publicly owned water utility in Paris. It has a multi-stakeholder board along with a separate body (an “observatory”) to encourage citizen participation and oversight. Another is Banco Popular in Costa Rica, which has a large, democratic governing assembly which elects members to the board (alongside representatives appointed by the state). Here in the US, we have started to see climate activists run for elected board seats of publicly owned utilities in some jurisdictions; and some public transit systems have worker and rider representatives in their governance structures (albeit often in non-voting positions, which is not optimal from a democratic perspective).
TS:
As for me, one thing I experimented with, having studied the way people work online for more years than I care to admit, is what I call ‘platform cooperativism.’
I proposed this in 2014 as an alternative to the ownership regime of the digital economy. Platform cooperatives are businesses that use a website, mobile app, or protocol to sell goods or services. They rely on democratic decision-making and shared ownership of the platform by workers and users. They combine the original spirit of the Internet as an open and shared space with community ownership and democratic decision making. A platform, and this may not be clear to everybody, is an online application or website used by individuals or groups to connect to one another or to organize services. In short: Imagine an Internet where all the apps, platforms, and protocols are owned by the people who depend on them most. Imagine an Uber that is owned and governed by its drivers or broadband infrastructure that is owned by the users.
Smart.coop is one example of a platform co-op. It is rooted in a legal hack: It turns independent workers into salaried employees of the Smart cooperative thereby offering the full extent of protections such as unemployment benefits and protection against harassment that labor laws traditionally grant employees. Smart Cooperative offers tangible social benefits for 35,000 freelancers in nine European countries with an annual turnover of roughly € 200 million. Smart is a multi-stakeholder cooperative that has many stakeholders as owners and creates structures that include various groups in the co-ops’ decision making. Such multi-stakeholder co-ops point back to a form of mutualism that has existed before cooperatives. It implies that the beneficiary of the co-op’s services can also be part of the co-op. Membership, therefore, goes beyond the confines of the organization to also include the local community. A subset of such cooperatives is social cooperatives, of which there are 11,000 in Italy.
Worldwide, co-ops are hidden in plain sight. 1 in 3 Americans is a member of a co-op. Worker co-ops, multi-stakeholder co-ops, and producer co-ops have substantiated benefits over business-as-usual. In India’s Kerala, the Uralungal Labour Contract Cooperative Society (ULCCS) is a highly profitable worker cooperative that started in the construction sector some 90 years ago. In Spain, Mondragon, a network of worker cooperatives has 35,000 member-owners (and 81,000 users in total) and many satellite companies worldwide. Contrary to all rumors, it is hard to argue that co-ops can’t scale.
TH:
I am very supportive of cooperatives, and in general I believe that our modern economy has plenty of room for a diverse mix of “democratic ownership” models or plural forms of ownership, especially in the short-term. Moreover, multi-stakeholder cooperatives like the ones you mention are a particularly important and innovative model. Inasmuch as the stakeholders involved in these types of cooperatives include representatives of the wider public (either through direct elections or governmental appointments), I would consider them to be a form of public ownership. Beyond this, I think that there is a lot we can learn about organizational design and democratic governance from both the incredible successes and limitations of large-scale cooperative models like Mondragón and Kerala.
I am especially interested in the ways in which more traditional forms of public ownership (and public sector economic activity and planning more generally) can help enable, embed, and support cooperatives (especially platform cooperatives). Such partnerships and networks, funding and development strategies, and hybrid models could, I believe, overcome some of the limitations and pressures faced by both cooperatives and publicly owned enterprises alike.
For instance, in North Dakota and elsewhere, publicly owned banks and agricultural processing facilities have supported the development of an ecosystem of cooperatives and small businesses. In Emilia Romagna (Italy), the existence of publicly owned planning and economic development entities in the post-World War II period helped the region develop the dense network of cooperatives and small businesses that exist to this day. And in New York and other cities, there is increasing energy around using municipal budgets and public enterprises/agencies to provide funding and technical support for the development of cooperatives and other community ownership forms (like community land trusts).
In the modern economy, I believe that public/commons ownership of digital infrastructure, intellectual property, research and development entities, banks, and data pools could help to facilitate the proliferation and growth of worker or consumer cooperatives (including platform cooperatives), displace the corporate “Big Tech” platforms that are currently dominant, mitigate some of the limitations and pressures cooperatives face, and maximize the benefits of both cooperatives and publicly owned enterprises in terms of ownership rights and democratic governance.
TS:
I am supportive of Democratic Public Ownership just as I am supportive of participatory democracy, and longer term visions like the post-work society. And yet, I worry about dysfunctional governments in Peru, Turkey, Brazil, the UK, Poland, Russia and the United States, to name just a few. I am deeply concerned about the ever-growing distrust in government, its institutions and processes. Facing the convergence of crises as we do, cooperative ownership, progressive municipalism, and mutual aid have its moment because they offer concrete near-term alternatives for stakeholders.
A variety of approaches towards a democratic practice make cooperativism real in the first place. From having widespread support in the community—like a recent study showed that 37% of Italians would like to own the platforms they most depend on— to having a government directly funding bottom-up initiatives—such as the taxi app Auto Savaari in the southwest tip of the Indian subcontinent, which then charges only 5% to its projected 100,000 drivers, many of them unionized.
In these pandemic times, we see lots of actors offering solutions, but there is no clear mass movement. But a movement pushing for a more diversified, digital cooperative economy can only succeed if it is part of larger political forces, and institutions, and social movements. That’s why going forward, we should be flexible, adapt to changes guided by principles of broad-based ownership and democratic decision making.
The Business Roundtable could never match that.
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