Community wealth building and democratic, pluralistic ownership of the economy are crucial to any fair reconstruction programme after the Covid-19 crisis, says a report.
UK thinktank the Centre for Local Economic Strategies (CLES) worked with US organisation the Democracy Collaborative (TDC) on the Owning the Future report, which argues: “The Covid-19 pandemic has caught the United Kingdom woefully under-prepared. We face a major public and economic event of historical importance, potentially unprecedented in its magnitude
in peacetime.
“In the face of this, community wealth building policy and practice must shift to meet the scale of the crisis, rapidly building a new institutional power base for a new politics of community control from the ground up.”
Both organisations have been key players in the community wealth building movement: in the UK, CLES has worked on projects such as the Preston model, while TDC is involved in the new municipalism project in Cleveland, Ohio, which partly inspired the Preston project.
The report says the crisis exposes the flaws of “neoliberal capitalism … beset with the compounding problems of toxic inequality, ecological collapse and democracy in decay”.
It warns: “The effects on our social, economic and political future will inevitably be profound and long-lasting. While we do not know exactly how events will progress, we can be sure that things will never be quite the same again.”
To steer the right course through this uncertain future, and ensure that communities weather a post-lockdown depression and benefit from a reconstruction programme, the report urges policymakers to “avoid the mistakes of the global financial crisis” and instead take inspiration from FD Roosevelt’s New Deal response to the Great Depression in the USA.
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It advocates national and local state holding companies to acquire failing businesses until they can re-launched as part of the economic recovery, and wants see the “UK’s discredited industrial strategy [replaced] with a Green New Deal, funded by a green stimulus recovery package”.
It also calls for a new social contract and welfare system which recognises that “austerity was a mistake” and expands “real community power”.
The paper’s programme echoes calls by a number of campaigners for a post-lockdown economy to avoid a “return to normal” and instead create a fairer and more democratic alternative. Its ideas include a number of principles of the Preston and Cleveland models of community wealth building, already being trialled by the wider UK co-op council movement – giving space for community control and worker ownership.
“Replacing the extractive features of our economy with more democratic and sustainable features must become the new economic common sense,” the report argues.
This means “democratic and plural ownership of the economy – rethinking business support and economic development more generally to advance democratic ownership models of firms. Also, a new era of municipal ownership”.
It argues for fiscal devolution to give local people more democratic control of their economies, and for an expansion of community finance initiatives. It also advocates for the spread of Preston-style procurement policies, where the spending power of state organisations and anchor institutions spreads local social value.
Community ownership gets a mention in the report’s plans for “socially productive use of land and property”.
It wants reforms put in place to “roll back the enclosure of public land through municipal development vehicles, community land ownership and a democratic revolution in the planning system”.
It also wants action to ensure more fair and just labour markets.
The paper is accompanied by a document drawn up by CLES to present to local authorities, titled Rescue, Recover, Reform. This says “community wealth building policy and practice must shift to meet the scale of the crisis, rapidly building a new institutional power base for a new politics of community control from the ground up”.
Among its reforming ideas for local economies is “the creation of a new local economic architecture” (mutual credit, platform co-ops and new forms of investment) for smaller businesses.
These co-op models are a more resilient and democratic alternative than some of the predominant business models which have extracted wealth from communities, the report argues.
If policymakers avoid a repeat of harsh austerity measures, and do not attempt “a full-on ‘shock doctrine’ disaster response, combining a new state authoritarianism with ongoing uncontrolled corporate capitalism”, then there is the possibility of a positive outcome, CLES hopes.
“The Covid-19 pandemic could become a moment of crystallisation, with citizens and governments working together to build a new social contract and a genuinely inclusive economy.
“This could be prefigured and sustained by the extraordinary rise of social solidarity and mutual aid generated by the pandemic, which could then snowball into a movement for deep and lasting political-economic change.”
