Wednesday, 21 July 2010

Doing the Lambeth Walk

Down here in the former LB Leninspart on Thames we've seen a fair few political fashions come and go (Ted Knight anyone? Linda Bellos?). Sandinista and ANC flags once graced the Town Hall. Back in the 1980s I returned some overpaid Housing Benefit and got a letter back starting ," The People of Lambeth thank you...". There are people a few years older than me who swear it used to be possible to get paid a day's wages to go on strike if you worked for Lambeth - as long as it was a strike against something Ted Knight disapproved of. And that's just a taster of the directly political stuff - I won't go into the tales of former senior officers in the Housing Department making porn films in the now closed Town Hall social club after hours. Nor the homelessness funding crisis enlivened by bailiffs arrive to confiscate council property because finance hadn't managed to pay the B&B bills of the homeless families they were supposedly assessing.

But for the past few years they've all been really moderate and well behaved down in the Council Chamber in Brixton which, to seasoned observers like myself, has frankly been something of a disappointment.

So imagine my excitement when news of Lambeth becoming the 'John Lewis Co-operative Council' reached my ears at the beginning of the year. This was the model that would take on the evil 'Easy Council' of Brent and win back the people to the Labour banner! Henceforth local services would be mutual rather than municipal, co-operative rather than Council.

At first this seemed just a slogan, but now we have a 52 page first stage blueprint. It's the New Labour version of the Big Society, so it may be worth those of you unlucky enough to live elsewhere taking a glance. It aims, after all, to prefigure a 'new relationship between citizens, community and public sector'. Big stuff, at least potentially. Big enough to have its own bloomin' wiki no less.

Who on the left could be against this ? Who could argue - at the level of principle - for the continuation of state provision over community and employee controlled models? Not me. Without quite adopting AVPS's starry eyed account of the world I'd like to see, or Boffy's relentless co-operative enthusiasm, I do fundamentally believe that ordinary people should run the world, and that politics should be, in part at least, about searching for new ways in which this hope might be realised. I just understand that this might, just might, still be via some form of state provision or control at times, especially at a local level. Letting individual schools control their own admissions, for instance, just ruins things for everyone else.

But as I struggle through the limpid Web2.0/sub-Californian management prose of the so called 'white paper' put out by Lambeth Council, three thoughts keep coming back to me.

Firstly, this is a reform for austerity just as much as the Big Society is supposed to be. There's going to be less money around, savings are going to have to be made and giving co-ops control over certain services is a kind of mutualist gloss on hard choices which would have had to be faced anyway. This fact is acknowledged, but softened by a touching faith in the potential for a Total Place approach to realise savings. Well, I'm all for only processing a piece of paper once and for the NHS to share Social Services offices. I just don't think turning Council services over to potentially scores of separate organisations, co-operative or otherwise, is a particularly promising way to start. So the idea may yet share many of the Big Society's assumed problems in basically boiling down to people being asked to take on services for nowt, or near to nowt, or just lose them completely.

Secondly, this really is just a gloss on the existing default model of the commissioner state:

Strategic commissioning goals would be agreed by a single senior management team drawn from across the borough’s public services, although this group could include members of the private and voluntary sectors as appropriate. The risk of professional capture and bureaucratic expansion would be contained through collective agreement and challenge by these senior commissioning managers. The
commissioning process would explicitly involve local political leadership through the council’s Cabinet and this will ensure direct and clear political accountability for all strategic decision-making of a much broader scope than at present. Further, this would be augmented by radically enhancing the role of scrutiny by local councillors and residents to hold delivery agencies to account for their operational effectiveness. This new group would be responsible for all strategic commissioning decisions in the borough which would then be made real by a range of delivery agencies" (emphasis in the orginal)

Note the local councillors and residents are holding the delivery agencies - i.e. the mutuals and co-ops - to account, not the strategic commissioners. How very modern: the monkey is fully and transparently accountable whilst the organ grinder sits untroubled.

Lastly, though, the big thing is the paper seems to only use the word 'procurement' once. Commissioners don't just wave their hands and magically commission - someone has to go out and procure. Don't take my word for it, go check the EU regulations that Mr.Mandelson was so keen to push through before being enobled. Now, personally, I think this is classic Emperors New Clothes territory: the traditional alledgedly sclerotic local government bureaucracy that these marketised relationships were supposed to destroy have been replaced by......a vast and increasingly sclerotic procurement bureaucracy disproportionately based on various forms of competitive tendering.

But you don't have to necessarily agree with that observation to accept my main point - regular competitive procurement exercises are incompatible with giving local people organised into co-ops and mutuals control over the services which affect them. I mean, they might lose the tender, might they not? & some would say this is a good thing if their services weren't up to much, or the tender criteria were simply too difficult for them to meet on - to pick a factor entirely at random - price.

The basic question is: if co-ops are so great - and they could be, I really think they could - how do we protect them from the circling sharks like Capita? I can't find an answer in our local white paper...


  1. Charlie,
    Is this all a little bit like the privatisation under Thatcher? You know, 'Don't tell Sid'. (I never understood that: probably too young.) Anyway, everybody and my granny bought shares and then all the shares eventually ended up in the hands of the big players in the end. It's a lot to ask coops, mutuals and volunteers to compete with ethically disinterested private businesses that will always, ultimately, do it cheaper.

    To be honest, there is a bit of me misses old fashioned state sponsored inefficiency. It were good enuff for w' parents.

  2. Rab,
    I think it's all a bit more sophisticated ideologically and, to be frank, a bit more ambiguous politically than 80s style privatisation. That ship has sailed: there's nothing very much left that can meaningful be sold off as a unified going concern that might one day make money. The key strategic point now, for both the Coalition and most of New Labour is to transform the remaining elements of the state into a series of teats that feed the private sector through outsourcing particular contracts and so forth.

    But there are other possibilities embedded in this turn of events. They are only possibilities of course, not certainties.

    We seem to be moving at an unstoppable pace into a world where everything from TV channel packages to social care is 'personalised'. This implies (or is widely taken to imply, at the very least) a multitude of modular options, quite possibly offered by different providers. But it's hard to imagine 'community' being commodified in quite this way. Some things have to be delivered collectively or not at all. So there is a 'gap' where proposals like those emanating from my local Council struggle into the light of day. Personally, I feel the Lambeth idea as they currently exist are most likely to be inflected in a rightwing direction for all the reasons I set out above. But this isn't inevitable. It would be interesting to see how a council led by someone like Livingstone might develop proposals like this.

  3. 'The key strategic point now ... is to transform the remaining elements of the state into a series of teats that feed the private sector through outsourcing particular contracts and so forth.'

    In a way that' the point I'm trying to make - in a rather kak-handed way. They say they're doing one thing producing a shareholder democracy (then) and a Big Society (now) but the money and wealth all ends up in the pockets business and enterprise. That is putting it crudely, I know, but I can't imagine that as the state 'outsources' services that the powers that be seriously think that co-operatives and mutuals will benefit in the long run. Is there a thriving or potential co-operative and mutual sector that might step up here?

  4. There's certain a liberal-leftish inclined section of the voluntary sector. Quite a big bit of it, actually. But that's not the same as being mutualist or co-operative of course.

    But - and here is my dilemma - I want ordinary people to run the world in the interests of the many not the few. I could put this in Marxist terminology of course, but I prefer to put it in the simplest possible English, if only because the language of Marxism, and of class analysis more generally, is so utterly despised by the majority. The idea itself, however, at this simple level, remains potentially popular I think.

    My guess is some 'ordinary' people will step forward to run these services. They will form some co-ops and mutuals, though nowhere near enough to replace the full range of state functions. &, for a while at least, there is every hope that these user/worker controlled institutions will actually be more efficient that either the state or the private sector. (it's all about getting rid of the principal -agent problem to use economic jargon)

    But this won't go on forever. Institutions fail; people don't come forward to take the roles of the initial founders without a great deal of incentive. In private industry this is provided by the spur of the profit motive. In co-ops and mutuals there has to be some alternative motivation - but putting them under the microscope of competitive tendering will mean that the profit motive rules.

    And yet, and we on the Left really want to defend state services per se?

  5. Yes, the whole mixed-market approach to public services is what's problematic about the Lambeth proposals. I'd much prefer something along the lines of continued monopoly of provision, albeit one regulated by membership control, rather than by competitive tendering. The democratic motive?

  6. Charlie,

    Good post, glad you've brought this to my attention. Some brief comments.

    1. I agree with your "commissioning" point. My argument against the Big Society is that the State remains the Commissioner. Why can't local communities act as Consumer Co-ops, who Commission these services? That way they decide how much they want to spend not the State, they decide which providers Co-op or otherwise they want to employ. On some things as you say it would be necessary to have National Standards. Marx argued keep the State out of Education, but have National Standards that have to be met by schools.

    2. My point about Co-ops is the same as marx as against Lassalle. They are only important to the extent that they are the creations of workers themselves, and not the product of the State or the bourgeoisie, who fund them to encourage workers to participate. This seems like the latter not the former.

    3.I disagree with Rab about Co-ops not being able to compete with private Capitalism. If that's true then Socialism is a pipe dream. Fortunately, its not true. Co-operative Housing has been shown to be by far the most efficient system of provision. The Co-op itself proved over a long period that it could be more efficient than private capital, and a look at The co-op facts about the 800 million people around the globe who are part of the Co-operative Movement shows that in many areas Co-ops compete effectively with private Capital.

    The main problem is the lack of attention that has been paid to the idea for the last century by socialists and the left, who have been too concerned with building their own sects, and waiting for 1917 to happen again. If Co-ops are to work then as Marx says they have to be part of an inter/national Federation that co-ordinates their actions in competition with Capital, and which is part of the general class struggle, including the building of a Workers party that can ensure that the necessary political changes are implemented that enable Co-ops to grow.

    I also think that a problem will be that Trade Unions have a vested interest in the Status Quo, and will naturally focus on the short term question of their members pay and jobs, not on a political strategy that might contradict that in the short term in order to undermine the power of Capital in the longer term.

  7. A further point, I suppose in reply to James. I think that Monopoly provision is a problem at the moment. The Left, unlike Marx or even Lenin or Trotsky is hung-up on the market, or more correctly opposition to it. To use hal Draper's phrase it fetishises "plannism". Marx and Engels were far more concerned about getting the means of production into the hands of workers than they were about ending competition. Scan through my blogs on Can Co-operatives Work, and you'll see plenty of quotes to back that up. One of the most important is Marx's quote in the Critique of the Gotha Programme where he talks about Co-operative production fundamentally changing income distribution, and therefore, the distribution of society's output. Another important quote is one of Lenin's last statements On Co-operatives where he says that NEP, introducing the market and private trading had not been a mistake, but ignoring the Co-operatives had been.

    At the moment consciousness is still dominated by bourgeois ideas. Its okay talking about "democratic" control of monopolies of whatever type, but why would workers who owned a Monopoly not decide "democratically" to use that Monopoly for their own pesonal benefits rather than the benefits of society. In one of his other statements Lenin said that this was one of part of a "cultural revolution" that workers in the USSR would have to go through that would take generations. Marx argues that the aspect of Capitalism that had been revolutionary was precisely competition that broke down feudal Monopoly. It was drove up efficiency, and spurred technological development. Why at the very moment when workers need to develop their Mode of production most, would they give that up? I see no contradiction between Co-ops competing, whilst being members of the same federation, to which they contribute a significant part of their profits, which is used for invetsment in developing new Co-ops and in expansion. I see no contradiction in Consumer Co-ops commissioning products and services from a range of suppliers including competing Co-ops - that again was a model that Lenin envisaged in Russia in the 1920's. Nor a contradiction between Co-ops competing against each other whilst forming a united front as against Capital. Capital copetes against itself, but forms a united front against Labour.

    Finally, competition takes many forms besides just price competition. If you ban price competition it reappears in some other form, that often is more opaque, and more reactionary. That happened in the USSR with competition on non-price grounds between competing Minstries for resources, for insatnce.

  8. Boffy, my problem with the commissioned services approach is not markets, but the but that their creation in public service provision is likely to empower rent-seeking profit-maximising firms at the expense of purpose-maximising firms in which staff, service users, and the general public are member-owners. The likelihood is that the rent-seeking firms will use competition to drive down terms and conditions rather than drive up the quality of service. There will be significant barriers to co-ops entering the market and winning contracts - my fear is that the Tories intend to do to public services what was done to social housing through right to buy.

  9. James,

    The housing example I think is useful. the fact, is that Council Housing was/is bureaucratic, inefficient, poor quality, and often oppressive to tenants. Socialists failed to offer worekrs in Council housing any alternative to it, other than plaintive demands for more democratic control, failing to notice that in general you only get control ove things you own! Ordinary workers did understand that, and given the opportunity to exercise control through ownership grasped it with both hands.

    Other models did exist. Co-operative housing has been shown to be the most efficient means of provision. If we do not provide workers with other alternatives now they are likely to follow a similar course.

    Commisssioning Co-ops have the potential to join up with the Trades Unions in any firms that win contracts. In fact, they could make TU recognition a condition of the contract. Whether, there are barriers to Co-op entry will depend on the circumstances. But, such barriers have not prevented Co-ops from overcoming them either in this country or other parts of the globe. That Co-op property has to go through such a struggle is no different to the fact that feudalism put obstacles in the way of capitalist enterprises too. At the end of the day this is what class struggle is really about, the struggle of workers property against Capitalist property. If we really beleive workers co-op property is superior we will overcome those obstacles through such a class struggle.

  10. I agree with regards what happened to social housing. I've was stunned to read Tony Crosland advocating in a collection of his published articles from the 70s that the private rented sector be nationalised then co-operativised - along with council housing.

    However the situation that exists today is not that there will be co-ops commissioning services, but that public sector workers will be offered the chance to form co-ops and bid for services.

  11. First, welcome to James. It's always nice when someone new drops by one's blog.

    I'm much more qualified in my enthusiasm for co-ops than Boffy, though I am still enthusiastic. I can just see some problems as well.

    I agree that Housing is a good example with which to tease out the politics of all this. We have in front of us a variety of forms of 'governance' with mutualist aspects - not just 'traditional' tenant co-ops but also Tenant Management Organistions of various kinds.

    In general- with lots of local exceptions - such bodies face three challenges to survive in the long term:

    1. If they are small - as many 'traditional' co-ops are - then they can be difficult to sustain when the initial group of 'committed' tenants move or or get burnt out. This is particularly true where lettings policies mean a substantial fraction of the 2nd wave of incoming tenants may may have been rehoused on grounds of vulnerability. So sustaining the level of necessary activism can be difficult.

    2. Financial problems can overwhelm even quite big tenant organisations - especially if large capital sums are needed for capital repairs. Often the only way to access such money is via a stock transfer and this can lead to difficulties in sustaining the independence of the TNMO from the new housing association landlord. Indeed, it sometimes isn't just a question of the association being predatory- sometimes the tenants very willingly opt out of taking responsibility for multi-million pound deals.
    3. Some co-ops and TMO do sustain themselves - but at a cost of a very small number of tenants becoming, in effect, housing professionals-manqué whilst the majority simply see the body as just another landlord.

    So I'm not starry-eyed.

    on another tack: Lambeth Education department have sacked 285 staff this summer, partly because of the Gove reforms re Free Schools and Academies and partly to prepare for this new world of being a co-operative council. This is not the best basis on which to win TU confidence.

  12. James,

    I agree that what the tories are proposing is not what I am advocating. That does not stop us using the space to put forward our proposals as an alterntive to theirs. I take the same attitude to the proposals for democratic reform.

    Charlie, I accept that not everything is plain sailing. On housing, it depends on the type of Co-op. I strongly beleive in ownership. My local Council sold its stock for £6,000 per house back in 2000. The ALMO raised the money from the market, and the Housing Finance Corp. £6,000 per house seems very little to me, even then, and even given the large scale repairs needed. So its not as if any tenant is putting in a huge share. But, having an actual share, having your money at risk - and the potential to see your investment rise with good management - is a powerful incentive to be interested, and stay interested. Having said that, its important that socialists play a part in creating forms, at even a street level, through which practical involvement can be encouraged. They seem better at some of this in the US than we are here. I guess because we have become used to the State doing everything for us, whereas there is a culture of self-reliance in the US.

    As I have argued elsewhere, Marx's argument for building a Co-operative Society did recognise the problem of smallness - and of groups selling off Co-op assets - which is why he stressed the importance of a National Federation holding the deeds to Co-op property, of a share of profits going to it, to invest etc. The Co-op itself through the CWS showed exactly how that can be succesful, commercially. My argument as set out in my article in The Weekly Worker, is that the problem with the Co-op was not that it could not compete or resolve these business problems, but that its nature as a consumer rather than producer Co-op gave members no incentive to participate.

  13. Boffy,
    You preach a socialism of workers control and workers self management. Fine, I agree that is a very important component of the world I'd like to see.

    But I've always thought that the replacement of a society organised for profit by one organised for need contained within it a number of other implications, not least the idea that there is no tyranny of the activists that replaces a tyranny of Capital and management. In other words, if one can't opt out occasionally from the tiresome business of constant collective self management and just read a book, or play with the kids, or do the garden or whatever you can count me out...hence the continued need for a democratically accountable state to pick up the slack.

    Also, although I enjoyed your Workers Weekly article, it left me fundamentally unconvinced that the decline of the Co-op can be attributed to it being a consumers organisation, not a workers one. If this were true then it would be a criticism of other kind of user co-ops as well- such as the housing ones we've been discussing.But I don't believe it was true. Lack of capital for modernisation relative to its capitalist competitors seems a more likely reason for its decline.

  14. Charlie,

    Surely, its the idea that the majority should content themselves with reading a book, or playing with the kids, whilst some other group of elected representatives (activists) take the decisions, which DOES constitute the "tyranny of the activists". Surely, the whole point is to create the conditions under which because everyone integrates the task of decision-making within their daily life, and does so in a way that is social and enjoyable, the idea that such tasks can or should be assigned to activists disappears. Surely, in that way the task is not time-consuming, and leaves plenty of time for other activities.

    On the Co-op, I think the facts disprove the idea that it was lack of Capital. They lacked Capital in the 19th century when they were set up by handfuls of workers but grew like topsy. At the beginning of the 20th Century there were already huge Trusts such as that in the Soap Industry, yet the CWS was effectively competing and undermining them on price. At the same time the Co-op was threatening the Department Stores etc. There were large Co-op superstores here long before there were big TESCO's or Sainsbury's, and they had the advantage of a large horizontally and vertically integrated company that these other stores did not have.

    No the real problem was that I identified, and a while ago I had a practical experience of it. I went to get a few things for my Mother a few years ago at the village Co-op - still in the old cinema I described in the article. Back when it was set up, it had everything. Now it had bugger all, but it did have big stacks of booze. She wanted some pork chops. They had no meat, fresh or pre-packed. As the last butcher's in the village had closed some weeks previously, I suggested to one of the staff that it might be a good idea to stock some, considering that nowadays the village has lots of old folk without cars, and who don't go to any of the bigger stores in the surrounding towns. She told me they are not allowed to make those kinds of decision, they were told by head office what they could stock. The parallels with Soviet bureaucracy struck me straight away.

  15. Boffy,

    "Surely, the whole point is to create the conditions under which because everyone integrates the task of decision-making within their daily life, and does so in a way that is social and enjoyable, the idea that such tasks can or should be assigned to activists disappears. Surely, in that way the task is not time-consuming, and leaves plenty of time for other activities."

    Well, yes.

    But I've never experienced such an absolute mass absorption in any business at hand, at least not one that was sustainable for any length of time. I think it is more conceivable to move in this sort of direction, whilst always allowing that at any given point a minority - or, at best, a bare majority- will be engaged. The point surely is to provide for a regular refreshing of who that minority or bare majority might be.

    I recall the huge Co-op departmental store in the centre of Coventry in the mid 1970s - even then it had a 'Eastern Bloc' feel to it. It was large, faded and provided with a poor and over priced range of (non food) goods compared to its' capitalist rivals. I put this down to under-capitalisation, but I suppose could be wrong.

    Your example of the smaller store in your mother's village is a story of over centralisation of decision making, not a story that says workers would make better decisions than consumer representatives. Interestingly, GIS systems, activated via loyalty cards have allowed the big capitalist retailers to get round this problem. I think the Co-op has finally realised the power of the Divi card in doing the same thing, but this more recent development doesn't explain why they performed so badly in the period c.1970-2000 compared to their rivals.

  16. Charlie,

    In my blogs on The Economics of Co-operation I gave some evidence from other societies where such involvement is taken for granted, and is part of a social process. "Barn-Raising" in the US, is another example. I accept these are only partial examples. The more practical example I'd give would probably be a business Partnership, where partners do tend to all be active, depending on the type of Parnership.

    On Co-ops with type of buildings the question is why werre they innovative in the 1930's, and 1940's then? The same with other innovations such as self-service? On the village Co-op. Actually, I contacted the Co-op to suggest that it would be a good idea to set up a Board of members in each area around a shop to do just that. No response. The problem is that those who would have an incentive to participate would be activists. As some of the examples I gave in my WW article showed that might not be in the long term interest of the business. The Edinburgh landladies were only interested in low prices and high divi. Only the workers in the business themslves have a direct interest in making the business efficient over the longer term, and doing so in a way that does not imply their greater exploitation. Connolly's example of Ralahine shows why they have an interest in introducing labour-saving equipment not just to be more efficient, but to make their work easier and lighter.

    But, even at the level of the shop, the workers could have responded not only to consumer requests, but what they saw themselves i.e. all the butchers had gone! GIS systems can't tell you how much customers want to buy something you are not already selling! Probably, the reason they had lots of booze, is that it was something they stocked, and all the kids came in and bought lots of it!

    Actually, if I was a business adviser to the Co-op at the moment, I would forget about most stores, and go back to one of the things they used to be big on - home delivery. They still have a massive wholesaling operation through CWS, and of course, production facilities in a range of products. If they developed online shopping, making it free, for instance, they could cut a lot of the cost of buildings, and go straight from centralised distribution points.

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