Labour Preston and a post-Capitalist world

July 28, 2013 11:43 am

When the city of Preston is mentioned people usually think of our favourite sons Nick Park, Tom Finney or Andy Flintoff or maybe the debate about the future of our world famous bus station.  What is less well known is how a quiet revolution could be beginning here by incorporating ideas from progressive cities in the US who are building democratic alternatives to capitalism and doing so quite successfully.

In the last year Preston’s Labour Council received two visits from Professor Ted Howard from the University of Maryland who showed how in Cleveland, Ohio ‘’not for profit anchor institutions’’ like universities and hospitals have shifted spending on goods and services to the local economy and democratised the ownership of wealth from the grassroots upwards.  This strategy created 5000 jobs from Cleveland’s hospital network alone when they increased spending from virtually nothing to over 80% locally.

This stimulus from Cleveland’s anchors not only delivered new jobs for Cleveland residents in locally owned businesses but also saw the beginning of a sophisticated network of worker owned cooperatives in Cleveland known as ‘’Evergreen Co-operatives’’ based upon the highly successful Mondragon Corporation in the Basque Region of Spain.  The Cleveland model has been praised from sources as diverse as the Obama administration to Noam Chomsky.

Richard Wolff wrote earlier this month about the decline in Detroit with shareholder owned companies investing there often with the support of tax credits and then abandoning the city when there were greater rewards by paying workers lower wages elsewhere. Based on this experience Cleveland and other cities are adopting new ways of thinking based around principles of democratic ownership to halt further decline.

It is not just Cleveland in which democratisation is emerging.  In Alabama, the public pensions system is investing to help create worker owned firms.  There are new profit generating city owned hotels and convention centres emerging in dozens of US cities. One quarter of US electricity is generated by locally owned public utilities and coops and 95 million US citizens are now members of credit unions.

In Preston, we are working with the Centre for Local Economic Strategies (CLES) to persuade our own anchor institutions to increase spend to support local businesses and new worker owned coops.  By doing this we hope to secure our own employment quotas, a living wage and a more democratic local economy.

We have already received interest from Professor Richard Wilkinson – author of The Spirit Level who we aim to work with to promote the idea nationally.  One central theme often overlooked in The Spirit Level is the necessity to look for alternative ownership models or as Wilkinson says for business to move ‘’from a piece of property to a working community’’.

The problems created by financial capitalism apply as much here as they do in the US.  A new network of local authority supported ‘’wealth building councils’’ could be created to promote these ideas.  From the US to the UK beginning in Preston a quiet revolution could be beginning to move to ‘’the next system’’.  Come and join us in this revolution.

Councillor Matthew Brown is Labour Cabinet Member for Community Engagement and Inclusion on Preston City Council.

  • anthonypainter

    Excellent piece. Would love to hear more as it evolves. Thank you.

  • RogerMcC

    I believe you are looking at the US (and particularly at anything at all that ever comes out of the state of Alabama) with rose-tinted spectacles as we are also seeing there a growing wave of city bankruptcies which are as likely to effect wealthy Sillicon Valley communities like San Jose as rustbelt cities like Detroit and I suspect in some cases these projects are desperate attempts to fill the gaps left by collapsing public services rather than truly radical advances.

    Plus we are also sorely lacking in these ‘not for profit anchor institutions’ you mention

    Universities and big city hospitals in the US often sit on vast endowments as well as making huge revenues from fees and charges – which is very rarely the case in the UK (and Oxford and Cambridge are hardly in need of much help…).

    And many (but not all) US universities and hospitals also enjoy vastly greater independence (again excepting Oxbridge) from the state than their UK counterparts and are often (but not always) run by liberal elites with well-deserved guilt complexes and vast sums of other people’s money that they can spend on ‘community outreach’ to alleviate it – this again almost never applies in the UK.

    Finally you also have a tax system in the US which encourages guilt-laden philanthropy in both institutions and individuals – which again is entirely missing in the UK.

    Still more local co-operatives are always a good thing so whatever narratives help….

    • jaime taurosangastre candelas

      , , , , , , , , , ; ; ; ; ; ; ; ; : : : : : : : : . . . . . . . . .

      That should be enough punctuation for you to make some sense.

      • Mike Homfray

        If you intend to be rude and boorish, can you consider doing it elsewhere?
        I would suggest others who find your tone offensive also complain. It isn’t helpful particularly when you have nothing of any interest to add to the discussion.

        • jaime taurosangastre candelas

          So when was the last time that you added anything interesting to a discussion? Normally, it is “Mike Homfay: wind up the Union dinosaur argument”.

          What you don’t like is what I represent, and what you really don’t like is that your view is rejected, serially, again and again. I’m actually very pleased about that, and even better, I don’t have to be a Labour member to see you completely pissed off by your Party. Your membership subscriptions pay for things I like, and that you don’t.

          • Danny

            “If people voted like you feel, there’d never be a Labour Government.”

            There’d is not a conjunction of any sort and therefore should not be preceded by a comma. How was your English Grammar education?
            I love it when a man gets behind a keyboard and suddenly grows a pair. I’m sure you’ll attest that you behave equally obnoxiously and arrogantly in a pub, but you would be lying. I’d love to see you address people in the non-internet world the way you do on here. The inevitable black-eye that would instantly follow would tickle me hugely.

          • jaime taurosangastre candelas

            Of course “there’d” is a conjunction, a correlative one in this case as it joins independent and dependent clauses. If it makes it simpler for your little brain to understand, in conjunction with “never” the phrase becomes “there would not be” (and indeed it is a phrase, as it is the elision of four words)

            English is my second language, and my accent indicates that I am a native Spanish speaker. But that does not stop me writing correctly.

            It is not a comma, by the way. It is an apostrophe, in this case to indicate omission. But perhaps you do not know that.

            As for the rest of your imagination, well I am not bothered.

      • RogerMcC

        Troll.

        • jaime taurosangastre candelas

          Oh, diddums, as I think people say.

  • Matthew Brown

    Roger,

    Thanks for your comments. The approach in the US was most notably illustrated in Gar Alperovitz’s ”America beyond Capitalism”. This showed how there was an expansion of worker owned companies, employee owned businesses, municipal enterprise, community land trusts, locally owned public utilities, community development corporations, social enterprises and credit unions in a response to the disinvestment that has occured in many US cities as a result of the financial crisis.

    Richard Wilkinson and Kate Pickett in The Spirit Level highlight this approach in the US as well as alternative ownership models in the UK.

    CLES who we are working with in Preston have already done some excellent work with Manchester City Council in which they shifted the spend of there Top 300 suppliers to the local economy and this supported 5225 jobs with a further spin off from the local contractors.

    http://www.cles.org.uk/publications/the-power-of-procurement/

    We are mirroring this approach in Preston but will also be making the case that we should also look to the development of worker owned coops as they do in Cleveland as unlike conventional shareholder owned companies the wealth will be retained locally and the companies will not get up and leave.
    There is now favourable legislation both at UK and EU level to promote social value in procurement. In Preston, we have a large university, city and county councils, two further education colleges, social housing providers, a large hospital and others like Lancs Constabulary. These collectively will spend billions hundreds of millions annually and the argument we will be making is that we should look to shift that spend to the local economy as they have done in Manchester.
    CLES are very well respected outfit so if this was a no goer I’m sure they would have told us from the outset. It does, however, require a huge culture change and ripping up the rule book and starting again with a new one.
    Watch this space.

  • dave stone

    This looks very promising.

    Perhaps Labour could use the Royal Mail sell-off to highlight and set out the “building democratic alternatives to capitalism” alternative.

    From what I’m hearing Royal Mail employees would enthusiastically welcome an alternative to the privatisation. As would would the overwhelming majority of the population, no matter what their political affiliation, throughout the country.

  • Chris Cook

    Matthew

    This is precisely the ‘resilient communities’ area I’m currently engaged in through prototype projects in Scotland, by way of action-based research

    http://www.ucl.ac.uk/isrs/about/fellows/ChrisCook

    You can’t solve 21st century problems with 20th century solutions. But the interesting thing is that it is possible to update tried and tested instruments and methods which pre-date the 300 year aberration into the modern finance capital which ran into the buffers in October 2008.

    We have been looking at the possibility of funding a pilot tram scheme for Preston using these methods.

    By all means contact me cojockAThotmail.com

    • Matthew Brown

      Chris,

      Thanks. The tram project in Preston is very well known amongst the community.

      Thanks again for all the contributions on here and for Labourlist for kindly publishing the article. I hope it will lead to the kinds of debates that Gar Alperovitz in the US and Richard Wilkinson here are beginning about whether we need to gradually evolve to a new system which is a truly democratic economy.

      It is interesting that Alperovitz is a historian by profession. His take is that when politics stops working i.e. growing inequality and economic stagnation that historically is a precursor to the beginning of systemic change.

      Spend a few minutes watching this trailor. It is absolutely fascinating.

      http://www.garalperovitz.com/2013/03/trailer-the-next-american-revolution/

  • Quiet_Sceptic

    Looks an interesting concept.

    The article mentions the creation of new jobs resulting from a shift toward local provision, but it begs the question what is the overall impact on jobs, which communities would gain and which would lose?

    Clearly these are not all new jobs as such, most will be jobs that are being moved back to the local community from providers in other towns, cities or countries. Who are the losers?

    It’s not a minor issue, particularly in the case of the regions which tend to benefit from government moving service provision to the regions to reduce costs and support local economies. It’s not inconceivable that a drive toward local provision could see some towns, cities or even regions lose jobs.

  • jaime taurosangastre candelas

    So actually, nothing at all is going on. Lots of coulds, shoulds, mights, possiblys, but actually nothing at all is happening.

  • RogerMcC

    Thanks – do follow US politics closely but not familiar with Alperovitz’s book.

    Are you familiar with Chris Dillow’s blog and book The End of Politics where he attempts to put questions of ownership back at the core:

    http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2013/07/the-transition-to-socialism.html

  • RWP

    The article seems to make a presumption that capitalism is “anti-democratic” … is this the message that members want the Labour Party to promote?

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