You know what I think, right. It’s about ownership. It is who owns the capital that has an impact on the nature of profit. Well it’s not what I think, it’s down to a chap called Marx. Whoever owns the capital within a freemarket system necessarily will have to accumulate capital, it is not just the vice of greed, it is simply the fact that unless you accumulate in a competitive market you go under. So its not just about ownership its about the existence of a market.
So let us think about this in terms of something like education or health, which exist for the public good. In the UK they have been publicly owned and there was traditionally no market. They just got a grant to do their thing. Since the 1970s and the emergence of neoliberalism, the state has begun the process of creating markets. They are artificial, you create a quasi voucher system, call it patient or parent choice. You commidify the service through targets and performative processes (call it deliverology if you like). Then you create capital by transferring assets from public ownership to joint stock limited companies that may or may not be for profit (it don’t matter much). Then they compete, there’s a market, they have to accumulate capital often by expanding (what Marx called ‘replicating the means of production’, which is a common form of capital accumulation). Challenger organisations come in to try and seize the most profitable parts. Of course it’s all state subsidised.
So what is the antidote. There are two things. One that I have thought about. Thought about it a lot. The other is from the hip. We’ll see how it goes. Firstly, it is about ownership, even for us on the left the prospect of a big state is not very inviting. Big inefficient grey public-sector organisations. No. I prefer not. The best thing to do, I think, is mutualisation, or the good old cooperative. Shared ownership. The key feature of state ownership is that public-sector bodies are (in theory) democratically accountable rather than having to grow capital. A mutual features democratic decision making, involving all its members, the staff and users (parents and students). The delivery is dependent on the choices of its members. There are more sophisticated models than the traditional one-member-one-vote. ‘Fair Shares’ models give weighted votes to different stakeholder groups, you will give the biggest wight say to the teachers of course, but along with parents you may have other community, expert and government representatives. Each group having a weight 0.4, 0.3, 0.2, 0.05, 0.05, for example
So that is ownership. The second thing is about the existence of markets. And this is half-baked.
The responsibility of government will be to ensure no profit can be made, effectively removing the existence in areas of public life where a freemarket economy is not justified. This can be regulated for and governments can ensure they only organisations within the systems are mutuals which will have little interest in competing in a marketised sense.
Great blog Graham.
Any philanthropist should just pay extra tax.
Do you want to have another go using a Fair Shares model?