Edited by Laurie Macfarlane ! New Thinking for the British Economy Edited by: Laurie Macfarlane Cover design by: Laurie Macfarlane Cover image by: Wektorygrafika Published by openDemocracy Copyright 2018 openDemocracy All texts published under a Creative Commons Non-Commercial License. This book concludes openDemocracy’s New Thinking for the British Economy project., which was generously supported by the Friends Provident Foundation. All contributions to the project can be found at www .opendemocracy.net/neweconomics. 2 Acknowledgements This book has been produced with generous support from the Friends Provident Foundation. The editor would also like to thank Christine Berry and Joe Guinan for their work on the initial chapter template, as well as Laurie Laybourn Langton, Mathew Lawrence and Adam Ramsay for their input, feedback and support, which has been a source of constant inspiration throughout the production of this book. All the authors have contributed to this volume in a personal capacity and do not necessarily endorse all the views expressed within it. 3 Contents Introduction 5 1 Democratic Ownership 10 - Andrew Cumbers and Thomas M. Hanna 2 Building Digital Plenty: From Data Enclosure to a Digital Commonwealth 23 - Mathew Lawrence and Laurie Laybourn Langton 3 Work and Free Time: A New Social Settlement 33 - Will Stronge 4 Building a Wellbeing Economy 47 - Katherine Trebeck 5 Transforming Care 62 - Susan Himmelweit 6 Industrial Policy: Impossible, But Indispensable 77 - Craig Berry 7 Financial Globalisation and Capital Mobility: What Can be Done? 92 - Ann Pettifor 8 Towards a People’s Banking System 100 - Christine Berry 9 Curbing the Debt Economy 112 - Johnna Montgomerie 10 Beyond the Property Owning Democracy 123 - Laurie Macfarlane 11 A Progressive Vision for Trade 136 - Ruth Bergan 12 ‘Race’ and Racism in the UK 150 - Maya Goodfellow 13 Media Democracy: A Reform Agenda for Democratic Communications 160 - Dan Hind and Tom Mills 14 Trying to Milk a Vulture: If We Want Economic Justice We Need A Democratic Revolution 172 - Adam Ramsay Introduction estern political economy is in a period of upheaval. Neoliberalism – the set of economic W ideas and policies that have dominated politics for the past 40 years – is rapidly losing legitimacy in the face of multiple crises: stagnant or falling living standards, sharply rising inequality of income and wealth, financial fragility and environmental breakdown. The Global Financial Crisis of 2007/08 brought an end to the so-called ‘Great Moderation’ – the period of relative economic stability since the 1980s – and laid bare the underlying weaknesses of free market orthodoxy. The impact of the crisis, and the austerity policies that followed, have fractured the political argument in many countries, contributing to a series of political shocks across Britain, the USA and Europe. At the same time, the economics profession has entered a period of intellectual upheaval. Student-­led campaigns for more pluralist economic teaching in universities have gained momentum, while increasing numbers of economists and commentators – including those in mainstream institutions such as the International Monetary Fund (IMF) and the Organisation for Economic Cooperation and Development (OECD) – acknowledge the shortcomings of orthodox economic ideas. Political economic paradigms do not last forever. Over the last hundred years, Western political economy has experienced two major episodes of transition from one paradigm to another: firstly from laissez-faire to the post-war consensus after the Great Depression of the 1930s, and secondly from the post-war consensus to neoliberalism in the 1980s. The evident failings of our present economic system, and the political dissatisfactions that have grown in recent years, suggest that the conditions for another paradigm shift are beginning to emerge. By chance and good fortune, Britain is at the very forefront of efforts to build an alternative to neoliberalism. Already there is a broad movement spanning academia and civil society working on a post-neoliberal vision for the economy, as well as growing political mobilisation and a proliferation of local and municipal initiatives putting new economic ideas into practice. While there are matters for continued contestation, it is clear that a consensus on the broad outlines of a new political economic agenda are beginning to emerge. This is an economy that embodies in its basic institutional structures and operations the foundational principles of democracy, equality, subsidiarity, resilience and sustainability. This more democratic economy is inclusive and participatory, pays attention to matters of scale and decentralisation, and is plural, allowing for the innovation of new economic forms and approaches at different levels. It involves building new, democratic models of ownership and control of key resources and decision-making across the economy. This new economy is also radically green and sustainable, living safely within ecological limits and boundaries. It is informed by a politics and ideology that leans towards the pragmatic and practical, with a strong non-sectarian solutions-orientation. This volume brings together leading thinkers from across this movement to outline the broad pillars of the post-neoliberal agenda that is beginning to emerge, and the type of policies that are needed to get us there. While debate around ‘the economy’ is often limited to areas of policy that involve monetary exchange, the question of who gets what and why is inherently political, and 5 therefore requires a much deeper analysis of where power lies in our society. For this reason this volume explores a range of areas that are not typically considered to be within the sphere of economic policy but which nonetheless play a critical role shaping our political economy – such as the media, our care systems, racial inequalities and our constitutional arrangements – as well as more traditional policy areas such as trade, finance and industrial policy. In a famous remark, Milton Friedman, a key architect of the neoliberal ascendency, said that “our basic function is to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable”. But shifts in political-economic paradigms do not happen because of ideas alone. History shows that it requires organisation and collaboration on many different levels, including concerted efforts of communication to disseminate and normalise those ideas in public discourse and popular mobilisation and political organisation, ultimately culminating in transformative change through civic action and the election of governments. In this volume, the authors also grapple with strategic questions relating to how to turn these new ideas into reality. This includes identifying the ‘critical paths’ that need to be attended to first in order to create the space for further change; appraising the power dynamics of building new institutions and displacing entrenched vested interests; identifying any tensions or debates that remain within the movement; and highlighting any research or policy development work that needs to be undertaken to fill any intellectual or implementational gaps. This is the domain of practical strategy which we must quickly learn to navigate if we too are to make the impossible become the inevitable. *** entral to the vision of a new economy is the question of ownership. Who owns and controls C the wealth of nations is fundamental to how an economic system functions, and in whose interests . The architects of neoliberalism promised a ‘share -owning democracy ’, and with it broadly shared economic power. But the reality has been a growing concentration of ownership and the rise of an extractive and short-termist corporate model , which todays lies at the root of some of our most pressing economic , social , and ecological challenges . A key feature of this model is the principle of ‘one pound , one vote’. In the new economy, this will be replaced by a new democratic vision of ownership based on the principle of ‘one person, one vote’. However, this doesn’t simply mean a return to old-fashioned, top-down state socialism. Instead, as Andy Cumbers and Thomas Hanna outline in Chapter 1, it means democratising ownership and control of our common wealth through a diverse range of ownership models including municipal ownership , multi -stakeholder ownership , cooperative ownership and community ownership. But questions of ownership do not just apply at the level of the firm. If data is the ‘new oil’, then who owns our data has huge implications for the future of the distribution of wealth and power. As Mathew Lawrence and Laurie Laybourn-Langton outline in Chapter 2, companies such as Facebook, Google, Amazon and Apple have amassed enormous wealth and power through a business model of ‘monopolistic data enclosure’ – a business model that is increasingly responsible for serious economic, social and political problems. In the new economy, data will be treated as a collective resource , and digital infrastructure as a public good . Private data enclosure will be replaced by a thriving, creative and pluralistic ‘digital commonwealth ’ which will be overseen a series of democratically accountable public bodies. 6 At the same time, other technological trends such as artificial intelligence and machine learning are set to transform the labour market. Without action, these trends will exacerbate inequalities, as