The future of the left since 1884

Time for Labour to build a truly democratic economy

The very ideas of ‘guild socialism’ and ‘distributism’ have been far and few between since the early 20th century, yet the case for equality and common ownership is stronger than ever. We have always been presented with a false choice...


The very ideas of ‘guild socialism’ and ‘distributism’ have been far and few between since the early 20th century, yet the case for equality and common ownership is stronger than ever. We have always been presented with a false choice between Keynesianism and neoliberalism, state intervention or untamed markets. But both Keynesian policy and laissez-faire capitalism have failed to create working economies for ordinary people – we need a radical alternative.

The alternative lies in truly progressive, democratic socialism that brings trade unions and worker cooperatives to the forefront of decision making and governance. Everybody supports democracy in government, but why not in the economy as well? It has taken us hundreds of years to finally win universal suffrage, but in the age of the cost of living crisis, zero hour contracts and economic inequality, power is still being denied to the vast majority of people. Instead of centralisation and bureaucracy, we need to give power (and funds) to local democratic bodies. Similar to the system in Switzerland, Britain needs to become more accustomed to the idea of putting real power in the hands of ordinary citizens.

Putting an emphasis on co-ops and tradesmen guilds, a Labour economy must aim to bring democracy into the workplace. The current regulations on safety and working conditions should be expanded to encompass the democratic right of every employee to have a say in major decisions.

The strength of the collective model is testified by the continued success of the John Lewis Partnership and Co-operative Group as two of the leading retail brands here in the UK. While Mondragon, a worker co-op in Spain, might have suffered some hits recently, it has been one of the Basque region’s leading companies for decades. Surely it is obvious that we should be promoting the ethical and collective model of industry over the top-down and exploitative model? Unlike most businesses, co-ops aren’t governed by the actions of stock brokers, and aren’t forced to suppress employee wages for the benefit of shareholders. In fact, the co-operative model is the only one in which sustainability can be more important than pure profit.

It is vital to draw a sharp contrast between socialist democracy and David Cameron’s ‘big society’. The Tory-led government has proposed that state services should be put in the hands of local charitable providers – but instead of funding these local organisations, this government has simply handed over its responsibility. The current flavour of local democracy is very much a cost-saving mechanism for central government; this also needs to change. Localised governments or collectives cannot start ignoring their obligation to help the vulnerable and disadvantaged, even if they are promised greater autonomy.

The Labour party needs to lay down the case for a new type of society – one that is based on collective action and responsibility. The spirit and energy of old Labour need to be channelled into building a fresh socialist platform for the country to get behind. Yes, this would mean retaining the link with the trade unions, or even making it stronger. It would also mean bringing rank-and-file members to the epicentre of policy making. As the CLPD (Campaign for Labour Party Democracy) have put into question, how can a party that is internally undemocratic claim to be a supporter of national democracy?

Electorally, there are huge potential gains for any party that adopts a radical manifesto. Polls and surveys of all natures suggest that political indifference between Britain’s largest parties is the driving force behind the current crisis of political apathy. If Labour can create a radical agenda for the country to unite behind, the goal of mass membership would become undoubtedly more achievable – especially if the party can reconnect with grassroots activists and campaigners.

2014 is the year of policy for Labour; will this country continue to suffer under Tory-lite austerity measures? Or can we transform our economy and win the race to the top?

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