Escaping a Failed Model

Over the past three decades, the standard model for urban development has focused on attracting big, usually out-of-town developers to take the lead. Large amounts of public land and assets have either been given away for almost nothing to pump private development or else simply sold off to raise desperately needed cash. Preston council has since 2011 bucked the trend, a shift prompted when the fallout of the great financial crisis caused a £700 million flagship shopping-center development to collapse.

In the aftermath Matthew Brown, supported by a handful of sympathetic councillors, began investigating alternative development models that would be less dependent on the vagaries of inward investment. They took inspiration from the community wealth-building experiments of Cleveland, Ohio, along with the large network of workers’ co-ops around Mondragon in Spain’s Basque country, which in turn led to working with two think tanks, the Democracy Collaborative and the Centre for Local Economic Strategy (CLES).

The approach derived from this research begins with the ostensibly un-sexy topic of local government procurement. This means both sourcing products and services locally — thereby stopping the leak of money out of the local economy — and raising standards among local suppliers by, for instance, insisting they pay a living wage.

The aim is then to identify “anchor institutions” that can’t relocate in search of cheaper labor, such as the local hospital and university, and persuade them to follow similar procurement guidelines. Where no local supplier exists the council facilitates the development of employee-owned firms and workers’ cooperatives to fill the gap.

It’s from this baseline that Preston has begun to undertake a more radical reshaping of the local economy in a more cooperative and democratic direction. As the model has developed, so have ambitions, with plans to accelerate the growth of the cooperative economy by building a favorable ecosystem, most notably through creating a regional cooperative bank to provide financing.

The authors are clear that the Preston example is not a one-size-fits-all model, and the book includes some discussion of similar experiments and approaches. The Welsh devolved assembly, for instance, has a commitment to the foundational economy in which sustainable access to basic goods and services is prioritized over consumer-driven growth. Although many factors were at play, and it remains to be seen what changes this will actually precipitate, it’s no coincidence that the Welsh Labour Party performed far better than its English counterpart in the May 6 elections.

The second half of the book shifts into a how-to guide for implementing not just community wealth building but also a range of institutions from credit unions to community land trusts. This suite of policies and approaches, the authors argue, provide the tools for specific iterations of what they call “universalizable localism.”

Bridging the Divides

The prominent success of Preston has opened up the broader question of how the UK economy might be transformed by alternative development models — of various kinds. Small-scale experiments in economic democracy proliferate, but since the defeat of Corbynism we lack a strategy for scaling up across the country, a theme that the book mostly avoids.

The main narrative about Labour’s defeat in both the 2019 and 2021 elections, and the explanation for why some de-industrialized areas in the North and the Midlands have shifted towards the Conservatives, is that Labour has “lost the working class.” The truth is more complicated. Though both Hartlepool and Preston are deindustrialized towns in England’s North, their demographic trends are very different.

The population of Hartlepool is shrinking and getting considerably older as the young leave in search of work. Hartlepool has a high proportion of retired homeowners who experience relative personal economic security mixed with deep dissatisfaction at the wider declining fortunes of their town. It’s this cohort, in alliance with propertied pensioners in more affluent parts of the country, which form the core of the new Conservative base.

Preston looks quite different. The population is growing, and with the city’s university and good transport links, it has, on average, gotten much younger over the last forty years. It’s the precarious, predominantly urban younger populations, locked out of home ownership, who have moved left in the UK as well as in many other parts of the world in recent years.

The Preston model is sometimes held up as an example of how the new political geographical divide can be bridged. As Andrew Cumbers, a professor of regional political economy at the University of Glasgow, has argued, “new coalitions and socio-political identities around economic democracy are critical in fostering a broader narrative of individual economic rights, public participation and justice open to all groups in society.”

Yet it’s still not clear what community wealth-building and the wider economic democracy agenda would look like in an area like Hartlepool. How do we implement economic democracy in areas with an older, property-owning population, or perhaps more directly, the vast swathes of the country where municipal authorities are indifferent or even hostile to a community wealth-building approach?

To understand how we cross the new divides in which the experience of class is shaped by age, asset ownership, and differing experiences of work, we need to understand how these divides were erected in the first place. The new Conservative social base is not the simple product of aging. It’s the end result of a forty-year project to reshape the material interests and political outlook of that constituency. Key to this was the privatization of public assets, not least the sell-off of council housing.

The field of economic democracy, within which the community wealth-building tradition sits, has been a central focus for the UK left in recent years precisely because it holds the promise of reversing this process and reshaping interests in a more democratic and collectivist direction.

Inventing the Future

How might other municipalities in the UK expand on Preston’s model for democratic ownership with this reshaping of interests in mind? One step would be to start developing meaningful channels and forums for popular participation in local government, and to do so without repeating the post-democratic or post-political tendencies that have characterized many previous efforts at governance-beyond-the-state. This means starting to explore decentralized modes of economic development.

In practice, this might involve what we’ve called Public-Common Partnerships (PCPs), in which independent projects for the common ownership and governance of assets form chains of mutual self-reinforcement. This in turn allows them to develop their own participative development plans for the local area, ultimately inviting local authorities into partnership.

To be clear, this isn’t an argument for further scaling back public institutions in favor of a politically ambiguous concept like community power. PCPs could well be characterized as an interventionist approach to economic programming in which properly resourced public institutions (both in terms of finance and capacity) are in a stronger position to act.

Indeed, the next phase of community wealth-building could follow Erik Olin Wright’s vision of eroding capitalism, in which he described making use of the state “in ways that sustain spaces for building emancipatory alternatives with a wide range of initiatives from below to fill those spaces.” Democratically governed assets should be key to this vision.

This means maintaining an important role for the state insofar as it can help enable such initiatives, while also allowing that role to be supplemented by a broadly democratic and participatory politics that hands economic power to communities.