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Democratic wealth and building up the institutions of the left


Last week, at the headquarters of the Policy Network, an interactive round-table debate was held in partnership with the journal Renewal – part of a series of debates on the problems facing social democratic politics. The subject was “Building-up new institutional power bases in the age of austerity: Lessons from the United States” and the event was chaired by Roger Liddle, a Labour peer and frontbench spokesman on Europe and Business, Innovation and Skills, who is the chair of Policy Network.

Build it now!”

Joe Guinan, senior fellow at the Democracy Collaborative at the University of Maryland, opened the debate by sharing the experiences of US “community wealth” initiatives – from social enterprises and community land trusts to co-operatives and employee-owned firms. These projects, by existing community groups and trades unions, are usually aimed at addressing specific problems facing towns and cities, but they are challenging the trends of de-industrialisation and urban decline by democratising and localising capital. Many of these projects have been launched in the wake of the economic crises which began five years ago, and in response to the decline in revenues experienced by municipalities.

The Democracy Collaborative has researched community wealth projects for over ten years, led by Gar Alperovitz – whose book What Then Must We Do?is a practical guide to the new economic movement in America. That the world's most powerful capitalist state has a powerful movement for economic democracy may come as a surprise. But in the course of the Great Recession, Americans - like Europeans – have become enamoured with alternatives which are practically, if not rhetorically, opposed to the interests of the ruling class.

Joe related these experiences to the situation faced by European social democratic parties. Bereft of an independent economic programme, their offer to electorates is slower, softer austerity cuts. I think this is effectively to declare “be killed by us or murdered by conservatives”.

The adoption of policies which are aimed at ameliorating the impact of austerity through institutional creation is not risk-free, however: attacks can be launched from existing institutional power bases. Consider the recent policy announcement by the leader of the Labour Party, Ed Miliband, to freeze energy prices – and the hysterical response from the Big Six energy companies; consider two the Labour leader's position on media reform, and the Daily Mail's smear job on his father, the late Ralph Miliband.

Co-operation or co-optation?

Karin Christiansen, the general secretary of the Co-operative Party, gave a considered response, rich in technical detail. The Co-operative Party is uniquely placed to share the lessons of US community wealth-building, having a record number of parliamentary representatives and a network of “co-operative councils” – Labour authorities committed to putting democratic principles into public service reform.

How much of this is offensive rather than a defensive response to austerity remains to be seen. The risk remains that the agenda of public service reform (code for cuts, privatisations, and job losses) gets through, and the agenda of private sector reform gets lost. Though I've been a member of the Co-operative Party for a number of years, I've always had the suspicion that its success in recent years has been because it is as means by which would-be candidates with weak or no union links can get on in selection processes.

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