The Case for Democratic Public Ownership

Since 1979 the privatisation and marketisation policies of successive governments have delivered the economy into the hands of a narrow set of vested corporate and financial interests. The consequences are that decision-making is geared towards short-term profit and rent-seeking, at the expense of more longer term thinking and in particular strategic concerns for the common good. Privatisation has also been accompanied by a growing foreign ownership of Scotland’s most strategically important resources and assets, raising important questions about government’s ability to control and administer important public policy objectives such as tackling climate change and providing essential services to the public at the lowest cost.

Privatisation of Scotland’s infrastructure and key resources also means that key public policy objectives are not being achieved. For example in the energy sector, privatisation is failing to provide energy security, meet climate change targets, or deliver cheaper fuel supplies to consumers. Critical issues such as upgrading and modernising the electricity grid to better enable a post-carbon future and securing international connections to other European energy networks are not being delivered because of reliance on private investment. In other areas too, notably rail, critical strategic infrastructural issues – such as shifting freight from road to rail and delivering modern public transport solution – are not being met.

Privatisation was a powerful political and ideological project that managed to inaccurately castigate older forms of nationalisation for their ineffectiveness and wasteful bureaucracy. In developing new forms of public ownership it is important to counter some of the widespread myths and caricatures of past forms of nationalisation in the UK to stress the under-reported effectiveness of many forms of public ownership at delivering public goals, in contrast to the experience with privatisation. However, older forms of public ownership in the UK were often lacking in democratic accountability and public participation. New forms should address these deficits.

In particular there is a need for a more democratic approach to the ownership and management of basic resources and network infrastructures which re-distributes economic decision-making power beyond its capture by financial, corporate and foreign interests. In particular we need to create new forms of public and collective ownership that are better able to develop an economy to serve social needs and environmental concerns over private gain. Such forms of ownership should combine higher level strategic coordination with more localised forms of public ownership. In all cases, though, ownership should seek to enhance democratic accountability and public engagement in the economy.

The failures of privatisation in other countries are producing a growing trend to take back utility sectors into public ownership where the emphasis is upon developing non-profit and collective forms of ownership. A range of new and hybrid forms of public ownership have been developed in other countries, from Latin America to Western Europe and Scandinavia, that offer models for Scotland to draw from in creating its own bespoke forms of collective ownership and infrastructure provision.

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