The Case for Economic Democracy

The impact of the COVID-19 pandemic on our economy will be significant, and we will need new ideas to address the consequences. While written before the pandemic, Andy Cumbers’ (University of Glasgow) new book ‘The Case for Economic Democracy’ is an important contribution to the ‘Build Back Better’ debate.

While there have been predictable calls from the lunatic economic fringe (like the Tax Dodgers Alliance) for a return to austerity, it is encouraging that such calls are not reflected, at least in the short-term, in the mainstream right-wing thinks tanks. There is a broad consensus that while interest rates remain at record low levels, governments can afford to borrow more and maintain that debt. 

Others argue for more radical approaches to government debt, and the TUC and Labour have started to work up plans to work our way out of recession. History also teaches us that it is possible to build back positively from recessions.

I was particularly struck by the chart below from a briefing I was on from the Resolution Foundation, which shows how even the high levels of spending during the pandemic are only a blip in historical debt terms.

Avoiding ‘Austerity Mark 2’ is a key starting point for building a better economy, but it is not enough. Andy Cumbers explains the context of the inter-related economic, ecological and political crises:

“Economically, there are widening inequalities between rich and poor, and a growing chasm between the elite billionaire class and the rest of us. Linked to this unequal and imbalanced system of global capitalism, we face an environmental catastrophe with global warming brought on by two centuries of rampant industrialization and ill-considered economic growth.”

He makes the point that we think of democracy in political rather than economic terms. Yet, who controls our economy and makes the key decisions is fundamental to our lives.  His book discusses the steps needed to move from an economy driven by narrow self-interest and greed, towards a more democratic economy, capable of serving the common good.

He starts with an analysis of the roots of the economic crisis and the history of economic democracy. He makes the link between the familiar ‘crisis of democracy’ commentary and the underlying link to global capitalism – championed not only by Thatcher, but accepted by centre-left governments as well. Aspects of this failure have been highlighted during the pandemic, but there remains a real risk that we will return to ‘business as usual’. 

Economic democracy is often conflated with industrial democracy, and while that is an important part of the solution, this book takes a wider view, exploring how we create a democratic economy as a more socially and ecologically sustainable alternative.

His central case rests on three pillars: 

1. Individual economic rights. Individuals being able to exercise their democratic rights by participating in decision-making processes. This applies equally to the economy as it does to other areas of polity and society. 
2. Diverse forms of collective ownership. Securing individual rights requires much greater collective and democratic ownership of firms, resources and property. This requires a mixed (markets and planning) economy of diverse collective ownership.
3. Creating deliberative and knowledgeable publics. The need to widen and deepen public engagement and participation in decision making to cultivate a more democratic and deliberative political economy. 

Finally, what I like about this series of books, is not just the cogent analysis, but you get a chapter on how to put the ideas into practice. 

Some of these solutions are controversial, even on the left. For example, he argues that Universal Basic Income could create real economic freedoms and social empowerment, as well as raising the wages of traditionally low paid jobs and strengthening collective bargaining. Not a view shared by Iain Macwhirter (Universal Basic Poverty) this week! Others, like reducing the working week, are gaining wider support as a consequence of the pandemic.

Democratic ownership, in both public sector and cooperative forms, is another solution that should gain traction as a consequence of the pandemic. The privatisation of social care is just one example of how privatisation has been exposed. The bailouts of tax dodging companies are another. Andy draws on some of his previous work in the energy sector for other examples.

Broader forms of participatory decision making like Participatory Budgeting (PB) are welcomed while recognising that they remain on the margins of political decision making. He argues they can widen engagement to groups that have not previously participated using examples from Brazil, Ireland and Iceland. Scottish experience, so far, has struggled to avoid capture by articulate, higher-income groups.

Like me, you probably won’t agree with every idea in this book, but the central concepts are important. The good news is that polls show the form of global capitalism that currently exploits and alienates both us and the natural environment has never been less popular. This book argues for a project that enables individual economic rights and ambitions alongside collective ownership and radical democracy. That sounds like ‘building back better’ to me.

Return to work planning - some issues to consider

I have been helping one medium size organisation with its HR challenges in recent months, and this week, we were looking at plans for a return to work for the majority of staff who have been furloughed.

We were all too aware that the pandemic has been anything but the claimed ‘great leveller’. This is also true for the tentative return to work planning.  Those of us on the Zoom call have been able to relocate their screen-based work to home. However, as this morning’s commuter pictures from London show, others are now cramming into overcrowded buses and trains, to do mostly low paid work. This is what inequality looks like.

While the Scottish guidance is still discouraging a return to work, it is likely that the disconnect with the guidance in England will be short-lived. As the First Minister has said: Scottish businesses would be able to reopen "as soon as they can safely do so" and predicted that they would not need to wait for "long periods of time".

My starting point is always the legal basics. That begins with the employer’s duty to protect the health, safety and welfare of their employees and, as is sometimes forgotten, other people who might be affected by their business. While this is a UK wide statutory duty under the Health and Safety at Work Act, there are also common law duties. 

In Scotland, the law of delict imposes on employers a duty to promulgate and operate a reasonably safe system of work. Failure can result in civil legal action - commonly known as personal injury claims. A similar duty can also be implied in the contract of employment, and therefore a material breach can result in unfair (constructive) dismissal claims. In short, there are criminal and civil legal consequences of not delivering a safe system of work, and the pandemic does not remove these requirements.

The weakness of these provisions is that they are mainly ‘after the fact’ remedies. The HSE Management Regulations attempt to address this with principles of protection that set out a hierarchy of prevention and control. Importantly, employees can stop work immediately and proceed to a place of safety if they are exposed to serious and imminent danger. Section 44 of the Employment Rights Act 1996 provides workers with the right to withdraw from and refuse to return to a workplace that is unsafe. It is automatically unfair to dismiss employees who use these ‘stop the job’ provisions. 

In addition to legal consequences, employers will want to adopt return to work strategies that reflect their values and broader workforce policies. They will also be aware of reputational risk. Something Wetherspoons, Britannia Hotels, First Direct and Virgin have struggled with during this crisis! Today’s Guardian carries a horror story about Irish meat plants, with one worker saying; “If the disease was in the animals, they’d have closed the place. But for workers, the factories can do what they want.”

In a practical sense, these duties are delivered by undertaking risk assessments to identify potential health and safety hazards. Employers are required to act on the assessment and minimise risks in the workplace. The employer I have been advising has well-established risk assessments processes, but we needed to think about what additional issues needed to be addressed in the circumstances of a return to work. Risk assessments should be prepared in consultation with Workplace Safety Representatives who understand the practicalities of the workplace better than anyone. 

The first decision to be taken is should workers be asked to return to the workplace. I found the three key tests published by the CIPD a helpful starting point – essential, safe and mutually agreed.

• Is it essential? If people can continue to work from home, they must continue to do that for the foreseeable future. If they cannot work from home, take the time needed to put safety measures and clear employee guidance and consultation in place. 
• Is it sufficiently safe? Employers have a duty of care to identify and manage risks to ensure that the workplace is sufficiently safe to return to. Use gradual returns to work to test health and safety measures in practice and ensure they can work with larger numbers before encouraging more of their workforce back.  
• Is it mutually agreed? It’s vital that there is a clear dialogue between employers, workers and their trade unions so concerns, such as commuting by public transport, can be raised and individuals needs and worries are taken into account.  

The UK Government guidance for England is slowly emerging, despite the decision to encourage a return this week. There is the official overall guidance and eight sets of sector-specific guidance. Frankly, ‘Stay Alert’ has to be the most vacuous piece of safety guidance I have heard for a long time. The inconsistencies in the English guidance are being highlighted daily, so we can only hope there will be revisions. In fairness, the sector-specific guidance is better, although even here we found some weaknesses. The TUC has described these as a ‘step in the right direction’, and they emphasise the need for specific COVID-19 risk assessments.

The HSE also has some helpful workplace safety guidance on this issue. We found the ‘face masks – face fit test’ particularly useful, given this is a piece of equipment managers and workers are not familiar with.

The TUC has issued some helpful guidance on the pandemic and return to work proposals, along with sector-specific guidance from individual trade unions. One issue highlighted by the TUC is the use of biometric and similar surface systems. The manager in one department had produced an excellent risk assessment but forgot that everyone touched the same screen at some time during the day. 

One key issue is the risk for public-facing workers. USDAW has highlighted the risks retail staff face and there have been shocking examples of people spitting and coughing at nurses and others. The case of Belly Mujinga, a ticket office worker, who died of COVID-19 after being spat on, is appalling, but also a lesson for managers on how not to handle staff concerns.

Working at home, along with other flexible practices, has been less difficult than some anticipated. I helped with a flexible working policy in the same employer last year. Many managers said it was impossible to deliver work this way, yet it is now happening every day. I also think the pandemic will change other work cultures, not least enabling more autonomous working.

Coming out of lockdown is going to be more difficult than going in. Employers and trade unions need to work together to design the safest possible workplaces. However, at this stage of the pandemic start with the questions – is it essential, can we do it safely and what does the workforce think?