The ownership of businesses is fundamental to how power and reward are distributed in society. Since the early 1980s the privatisation of major industries has helped transform the nature of the economy and in whose interest it operates. Yet strikingly, this election has seen the re-emergence - across the ideological spectrum - of arguments in favour of alternative models of ownership that have long been on the margins of policy debate, if not popular opinion. Whatever the general election result, ownership is back on the political agenda with potentially profound implications for the economy.
Private ownership of businesses gives private capital investors the control rights to appoint management, as well as ownership rights to the profits generated by production. It is a fundamental institution of capitalist economies and an engine of both economic dynamism and economic and political inequality.
Challenging the value of private ownership in the economy has been politically taboo for decades. In part, this reflected a consensus that the previous era of nationalisation was a failure. This is despite the fact that, as Andrew Cumbers, professor of political economy at Glasgow University, has pointed out, "total factor productivity ... in the nationalized industries of gas, electricity and water increased by 3.1 per cent between 1950 and 1985, a figure that was higher than both their US privately owned counterparts (2.6 per cent) and UK manufacturing as a whole (1.8 per cent) over the same period." Nonetheless, publicly owned companies were portrayed as inefficient and cumbersome, destined for the dustbin of economic history. Indeed, the UK took to privatisation with a zeal unmatched anywhere else in the world: between 1980 and 1996 Britain racked up 40 per cent of the total value of all assets privatised across the entire OECD.
Labour's manifesto marks a clear break from this approach. It commits the party to new forms of public ownership across the economy, with the stated goals of encouraging long-termism, improving productivity, and promoting more equitable patterns of ownership. The means to achieve this range from taking rail franchises back into public ownership as they expire and re-nationalising Royal Mail, to bringing the 32 private water companies in England under common ownership (as in the rest of the UK). Labour also proposes a decentralized system of energy production and distribution, with a single nationally owned energy grid provisioned by a network of new municipally owned energy providers. While the up-front cost would be considerable, as Tony Yates of Birmingham University has argued, the state would acquire valuable assets generating income, so the public debt would net out as roughly neutral. The more important policy issues are therefore less about cost than questions of governance, equity, and efficiency of those assets and companies in public relative to private ownership.
Alongside these strategic, largescale nationalisations, the manifesto promised to introduce a 'right to own', which would make employees the 'buyers of first refusal' when the company they work for is put up for sale, as part of a commitment to doubling the size of the co-operative sector in the UK.
A recent Labour policy document on alternative forms of ownership was more ambitious still. Drawing on a long tradition ranging from GDH Cole's guild socialism in the early 20th century to 'post-Fordist' economic arguments for common ownership today, Labour puts forward a series of steps to achieve a form of participatory economic democracy. These include expanding cooperatives, municipal and local-led ownership and new models of public banking. The proposals offer a vision of a pluralistic and public landscape of economic ownership.
Remarkably, the Conservative party has also got in on the act. The Tory manifesto commits to introducing a number of sovereign wealth funds, to be known as 'Future Britain Funds'. These promise to 'hold in trust the investments of the British people', extending public ownership of economic assets into the economy. They plan to capitalise such public investment funds by selling off public assets. This raises significant questions about how a sovereign wealth fund network would be run, funded and how its gains would be redistributed to achieve social, democratic and redistributive goals. Nonetheless, the commitment marks an interesting and potentially significant development in Conservative policymaking.
These manifesto commitments by both major parties reflect the enduring popularity of public ownership of the railways and utilities. Moreover, this agenda has arguably been given a new lease of life by Brexit, with public ownership of key sections of the economy an economic embodiment of 'taking back control'. The coming wave of automation makes questions of ownership all the more urgent. While the much-heralded rhetoric 'rise of the robots' does not mean mass joblessness, increasing automation is still likely to accelerate inequalities as capital substitutes for labour, with capital taking an ever larger share of national income. Who owns the robots in this future will be of vital consequence in determining who reaps the reward of technological change.
The challenge is ensuring common forms of ownership can deliver a more equitable, effective, and democratic economy. To help answer these urgent questions IPPR's Commission on Economic Justice will be examining questions of wealth and ownership, asking how best to broaden and democratise ownership to build a stronger, more inclusive economy.