Mutuals: Opportunities but also dangers for the left
(Cross-posted to Compass)
In barely three months, mutualism has been transformed from an interesting but much-neglected idea into the left's Next Big Thing. Both Progress and LabourList have heralded Tessa Jowell's enthusiasm for mutual ownership as "our mutual moment", while last week's New Statesman described it the idea that "could yet unite Labour's left and right".
And mutualism's appeal extends beyond the left. "Progressive Conservative" Philip Blond makes similar arguments in his ResPublica report "The Ownership State", while ConservativeHome today reports of Tory plans to invite public sector workers to own primary schools, job centres and other state-funded services as co-operatives.
Surely no-one would churlish enough to question this sudden outbreak of cross-party consensus? Step forward William Davies, who has written a spot-on critique for Demos, "John Lewis vs easyCouncil". Davies is no opponent of mutuals - far from it: he is also author of last September's Demos report "Reinventing the Firm", which combined trenchant analysis of the economic crisis with concrete suggestions for an alternative, more mutual form of capitalism.
But he's absolutely right when he complains of a "sleight of hand" that has allowed a debate about the crisis of the private sector to turn into one about the public sector:
"Labour has made lots of noises about this being a ‘mutual moment’, about wanting a fairer model of capitalism and attacking greed in the financial sector… and then slipped seamlessly into a discussion of public service reform.
"There are some decent arguments for greater use of mutual-type models in the public sector, and some impressive examples of this working well already. But this is an entirely different (and more humble) agenda from the one which many of us were hoping promote, namely of achieving a different way co-ordinating management, financial capital and employees in businesses."
He outlines three important distinctions between the private and public sectors:
"Firstly, private sector organisations typically make a profit, while public sector organisations don’t... In the private sector, employee-owners receive whatever dividend is distributed. This isn’t necessarily what they value most about being owners, but it necessarily affects their psychology one way or the other...
"Secondly, public services exist for the public good, usually with some notion of their users as equal citizens of society. It is no criticism of John Lewis to say that they are more concerned with their ‘users’ as consumers. Mutualism may be an effective way of injecting the public, citizen interest into public services, and almost certainly a better alternative than privatisation. But there is still a risk that accountability and public interests could be weakened by what is, after all, a severing of public institutions from a democratically elected state that otherwise owned and governed them...
"Mutualism makes private sector organisations more attuned to the common good, but equally makes public sector organisations more attuned to particular private interests.
"And finally, unless one believes David Cameron’s peculiar 2009 conference speech, the crisis was more a consequence of capital behaving badly than of the state doing so. It seems perverse, therefore, that we should seize the subsequent opportunity to reinvent the state, as necessary as that may be, while leaving capitalism roughly as it was."
Indeed, taking Davies's last point further, there are real reasons to fear that focusing on the public sector alone - while failing to tackle the defects of capitalism - will simply leave public services ever more vulnerable to corporate capture. The danger was spelled out succinctly in a lead letter in the Guardian following Tessa Jowell's announcement of a commission to study public sector mutualism:
"As the NHS continues the transition to becoming a commissioning service, a few mutual providers will be added to the mix to distract attention away from the multinationals that will increasingly dominate. Outcomes will be engineered to demonstrate the success of these purchaser/provider arrangements and a few social enterprises will be among them. Within a relatively short time it will be discovered that economies of scale dictate that all these contesting enterprises will work better if they are brought under a handful of super-providers – it will be at this stage that multinationals will come in to save the day."
And yet the ideas that underlie mutualism - of co-operation and trust - are profoundly relevant to the public sector. That's why it's also possible to agree with the second contribution on the same Guardian letters page, which puts the case for more mutuality:
"I note Tessa Jowell is suddenly interested in forms of ownership and management. It's somewhat ironic after 12 years of New Labour, during which time more of our public services have been outsourced and privatised, while at the same time the government has idolised the private sector and its mantra of growth at any cost. There was a time when the Labour party not only debated mutuality and co-operation, but was committed to socialisation more generally. The post-war form this took was nationalisation, which included top-down structures that gave no real contribution or say to workers and consumers and ultimately failed. A more democratic form of state ownership could offer a popular alternative to the current situation."
A more democratic form of state ownership - and one in which control is ceded to staff and users where possible - is indeed worth striving for. These ideas can be found not just under the banner of mutualism, but in public sector approaches that encompass systems thinking, co-production and public value. There is rich debate to be had around how such ideas can be synthesised. But it is a debate that must displace and not be bolted on to the market-driven model of the last 30 years.
• Update 2: Tory plans for introducing co-ops indeed involve grafting yet more quasi-markets onto the public sector, by introducing a profit incentive - even if the Tories don't call it profit.
Posted by Other TPA at 04:22pm on 15 February 2010
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