Date Posted
8 July 2024 10:07 BST
Article Author

Democratic public ownership: an idea whose time has come

By Thomas M. Hanna

Neoliberalism is experiencing a deep legitimation crisis. From the Great Financial Crisis and the Covid-19 pandemic to rising right-wing populism and climate breakdown, the neoliberal approach, which seemed so dominant and unassailable in many parts of the world not too long ago, now seems at best to be incapable of addressing the world’s intersecting and escalating economic, social, and ecological problems, and at worst to be contributing significantly to them.

In recent years, this reality has sparked renewed interest in alternative economic institutions, models of ownership, and systemic arrangements. One such form experiencing a resurgence and rebirth is public ownership, which refers to assets, services, and enterprises that are owned collectively by all people in a specific geographic area, and are governed or managed either directly by them or through representative structures – that is, by government at various scales.

This interest includes renewed energy and activism around defeating new privatizations; efforts to bring services back under public control (i.e. remunicipalization), advocacy around the use and disposal of assets and enterprises that are nationalized during times of crisis; and proposals to expand public ownership into new sectors and industries.

However, in general there is little appetite amongst activists, theorists, and certain policymakers to simply re-create or perpetuate traditional forms of public ownership. In recent years a new alternative known as “Democratic Public Ownership” (DPO) has started to emerge in a growing theoretical literature, the programs and statements of politicians and political parties, and real-world experiments.


What is Democratic Public Ownership?

Democratic Public Ownership (DPO) reimagines publicly owned enterprises, services, and assets, and how they intersect with political economic system change, on the basis of broad-based public participation and control, justice, equitably shared prosperity and social and ecological progress.

The concept of DPO is rooted not only in a critique of privatization and neoliberalism, but also of traditional forms of public ownership and statism. In particular, it rejects the State-Owned Enterprise (SOE) model prevalent around the world and throughout the 20th century for being overly top-down, bureaucratic, managerial, centralized, and alienating.

DPO also opposes efforts to “reform” publicly owned enterprises by enshrining private sector aims and structures, as well as “pragmatic” approaches to remunicipalization that are based predominantly on market imperatives (i.e. cost savings) rather than social, labor, or ecological considerations.

Conceptually, DPO is part of the longstanding tradition of economic democracy which, at its most basic level, suggests that principles of democracy, equity, and justice must extend into the economic realm. Moreover, DPO aligns well with the variant of economic democracy that goes beyond simply improving employee participation and inclusion and instead incorporates those efforts into a larger program of political economic transformation which moves beyond the systemic arrangements of traditional capitalism and state socialism.

Democratic choice and deliberation are at the heart of DPO and, as such, in practice it will likely look different based on the needs, culture, and democratic decisions of local populations. It will also likely emerge from a mix of different sources at different times, including social movements’ demands, government action and collective bargaining agreements.

That being said, the existing literature on DPO, along with the history of economic democracy more generally, provide some basic conceptual guardrails. For instance, if a community establishes a democratically governed public enterprise, but directs or allows it to implement racist hiring policies or abusive business practices, most theorists and practitioners would not consider this to be a good example of DPO.

Importantly, DPO is also not worker control, worker self-management, or worker ownership in the classic sense. While employees are undoubtedly a critical stakeholder group in the operation, management, and governance of any enterprise, DPO literature and practice suggests that in a publicly owned enterprise that they are not the only ones that should be represented and empowered.


Getting there from here

While DPO originates from a historical and ideological tradition committed to political economic system change, it’s not prescriptive as to what that change must look like. People, movements, or organizations committed to DPO do not necessarily have to be aligned with one particular view or approach as to how exactly economic democracy should be organized, especially as it relates to complex issues such as the appropriate mix of markets and planning, the role of the state, and the existence of other ownership forms. In other words, DPO is a flexible approach that can operate within a variety of systemic arrangements.

It also does not mean that DPO cannot or should not be implemented within existing systems, even if those experiments do not ultimately lead to systemic change. In fact, when considering theories of change in the context of advancing DPO, those that seek to build within and from the cracks of existing systems seem the most plausible.

Despite drawing from a long and rich history of theorizing and experimentation in economic democracy, and although there has been an uptick of recent interest, the actual practice of DPO remains marginal in most contemporary economies. While there still exists a plethora of publicly owned enterprises, services, and assets around the world, most of these are still governed, managed, and operated according to traditional state ownership principles. Examples of public enterprises that utilize and maintain heightened democratic practices are growing in number and visibility but remain a minority within a minority.  

At the same time, the two most prominent traditional theories of systemic change – revolution and reform – appear to offer limited prospects for successfully scaling DPO. Historical analysis shows that in most cases neither approach, even when successful, has led to genuine and sustained systems based on economic democracy.

As Erik Olin Wright put it: “while there have been revolutionary challenges to capitalism, the historical examples of ruptural transformation have never been able to sustain an extended process of democratic experimentalist institution-building.” One classic example of this is the Yugoslav system of worker self-management, which for decades was seen as a socialist alternative to both capitalism and Soviet-style central planning, but which ultimately collapsed in the early 1990s.

As for reform, there are many examples of successful reformist economic policies based on distributive justice or increasing democratic participation, but these generally fail, are abolished, or are co-opted when they begin to genuinely threaten the sanctity of private ownership and capital accumulation. A good example of this is the Meidner Plan in Sweden during the 1970s, which would have transformed the country’s political economic system had it not been defeated by business and elite interests.

In the modern political economic context both approaches are facing significant obstacles and headwinds that limit their applicability.  In particular, due to the collapse of the Soviet Union, among other factors, the prospect of revolution leading to wide-ranging socio-economic transformation has become less viable in recent decades; and in many countries and regions it has been ideologically relegated to a small and marginal fringe of the political left. At the same time, the rise of neoliberalism and a variety of global economic shifts has weakened and undermined social democracy (which was once one of the main vehicles for reform) in both in theory and practice.

Given this reality, a potential alternative would be to create and scale institutions and approaches which can both prefigure a democratic future society and, over time, develop the institutional base and social empowerment needed to achieve social transformation and to erode or displace the institutional and organizational pillars propping up the existing system. This could include creating and scaling democratic public banks which could slowly regain control of capital from large financial corporations and provide the funding necessary to seed and scale democratic public enterprises, cooperatives and social enterprises across other sectors of the economy.

This “evolutionary” approach does not ignore or avoid the potential need for future confrontations and breaks with the existing political economic system, but it would allow DPO to grow, develop, and build capacity before and during such periods of conflict.

Two decades into the 21st Century, the world is entering a dangerous period of escalating social, economic, and political problems. Confronted with this reality, some policymakers and movements appear ready to abandon democratic values and principles. Rather than go further down this perilous road, DPO suggests we should look to double down on democracy by moving towards a system that embeds it across organizations, society, and the economy more broadly.


Thomas M. Hanna is the author of Our Common Wealth: The Return of Public Ownership in the United States. He is currently completing his PhD at the University of Glasgow where his dissertation focuses on the theory and history of Democratic Public Ownership.

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