The time to expand public ownership is now

Decades of neoliberal political narratives have attempted to convince us that the only reason for public ownership is to subsidize private capital growth. Neoliberal economics are focused on the transfer of wealth from the public to private capital through commodification of public assets and services. The result has been a society tilted in favour of profit generation through public subsidies of infrastructure and services over human need.

The time to expand public ownership is now
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Expanding public ownership

Expanding public ownership is about more than just responding to crises of profit. It is about undoing the dogmatic push for private markets and commodification of our social selves and the natural world. These regular episodes of crisis within capitalism create an opportunity to advance a fairer and more democratic economy. Assets and services expansion during times of capital crisis can fix the problems caused by decades of loss of democratic control over production and raise standards of living of working people.

Public subsidies for private capital can take many forms: from public supports, to direct tax subsidies, to full "privatization" or gifting capital assets once owned by the public. The subsidy might have been in the form of loss-leading investments by the state or any of the following:

  • public and freely accessible physical infrastructure
  • public supported services for workers offloading costs from capital
  • training for workers
  • purchase agreements
  • worker paid employment insurance benefits
  • worker paid/actuarial-based workplace injury insurance
  • transportation infrastructure
  • communications infrastructure
  • defence
  • ports and shipping

The question for public infrastructure and services that benefit capital is: who is ultimately paying for these supports, capital as a whole or workers?

In a social democratic and left-liberal economic program, support for endemic capital production, public infrastructure and services that support capital should be paid for by capital. In this case, the public ownership of these assets is simply to remove the cost pressures on capital in their competition with other national capitals. Liberals call this supporting innovation and competitiveness, but what they mean is that their favourite firms need state help in their competition with other firms in other parts of the world – and demand non-profit services so that these firms may expand their profits.

The state support for capital in the generation of profits is a normal process within capitalist countries. If capital's profits are taxed appropriately and this money is used to subsidize the activities of capital – that supports international competition – then there is little theft from the public. The issue of exploitation of workers driving profit generation still exists, of course. As does the fact that subsidies to capital profit mean that money cannot be used to fund the expansion of the quality of life of the general population – undermining the very notion that all growth benefits the population.

The transfer of wealth from the public to capital – essentially theft of public assets to pump-up profits – is found when looking at public services and investments in infrastructure that do not directly support capital. It is this process that is defined as "neoliberalism". Instead of these supports continuing to support the social reproduction of labour (the public being people), they are utilized to support the rate of profit of capital and hold capitalism up. Under a left-liberal capitalism, the idea is that these assets and services are to be paid for by the public that use them.

They include:

  • clean water access
  • safe food
  • hospitals
  • care services
  • primary education
  • lower levels of government bureaucracy
  • housing supports
  • leisure transport infrastructure
  • parks and leisure land
  • environmental services and programs
  • energy and communications infrastructure
  • emergency services
  • postal services

These services, even when partially privatized, are heavily subsidized by the state so that they can provide a basic support for all leisure and living. The quality of these services are directly related to the standard of living experienced by the population.

Wealth transfer to private capital

The commodification of any part of these services or assets is a direct wealth transfer to capital since the services are publicly-owned and paid for already. The circuit of money and supports is passed through the state to make sure that all the money is used for services and supports – which flow back to workers that provide those services and the people who receive the service.

The main public-orientated goal of post-1990 social democrats – which puts them at odds with left liberals – is to maintain the public ownership and control of the assets and services directly related to social reproduction. The goal is to increase standards of living, knowing full well that the transfer of these assets to capital impoverishes the public. The more neoliberal view is that the private sector has the ability to "innovate" and provide services and supports in a way that is magically cheaper. At a local level this might look to be the case. For example, outsourced custodial services look cheaper to the individual building manager. However, the broader social cost of reduced standards of cleaning, poverty wages, increased casual/contract work arrangements, and "externalized" costs are all carried by the public sector down the line. This means that privatization (either commodification or outsourcing to capital-owned firms) of these services is a net transfer of wealth to capital away from the public.

Neoliberalism is less about productivity and efficiency and more about saving capitalism through the giving away of what used to be public assets and services to capital for free. The transfer of wealth from the public to the profit-producing sector makes it appear that capitalism has created much more wealth and growth than it has. Indeed, the ongoing creation of markets where none existed is the history of capitalism getting support from the state through the transfer of public wealth.

Socialism is about decommodification

For socialists, the public ownership goals are more than simply increasing the standards of living through economies of scale and reducing profits from social reproduction of labour. The goal is to decommodify services and production generally. Democratization of work and investment in socially beneficial production is only found when the exchange value of a commodity is replaced with the intrinsic real use value of a good or service to the public.

The process of decommodification ("nationalization", "increased public ownership and control", "remunicipalization", etc.) can be a multi-step process in the same way as privatization is a multi-step process. While it is possible to have the wholesale decommodification of a private service or support, the impact of rapid changes can cause crises. It is the speed of this transition that used to be the main point of debate within left parties before neoliberalism was the dominant ideology imposed to save capitalism.

The continued confusion between these two primary goals of decommodification and economic growth-supported standards of living creates conflict within left, labour, and/or green political parties and organizations.

The socialist program of democratic control over the economy is necessary for the true expansion of standards of living and the reversal of the decades of transfer of wealth from the public to capital. The political and economic impacts of this program also makes the expansion of public ownership in actual production necessary. The public must expand its ownership over new production and new creation of wealth for its own sake. Today, most urgently, this includes the production of vaccines, medical technology, and care services.

The broader political implications of this kind of economic program make it necessary to organize around the specific and immediate benefits to the public as those who dogmatically support capitalism will see this as a lost opportunity for profit.

The expansion of public ownership is, of course, easier during times of economic or social crisis when the failures of capitalism become clear and impoverished public services are more obvious to a plurality of people. We are in one of those periods now.

Nationalization or new public asset expansion

In the times between crises, there is a strategic problem of what to focus on: recouping the wealth and assets that have been privatized or investing in new assets, services, and productive capacity. History has shown that it is, however, essential to promote both at the same time.

Most people have forgotten that the public owned many privatized services or infrastructure. Many people do not know that most of their services have been commodified, or cannot tell the difference in their daily lives. The neoliberal project has done a great job hiding privatization programs from the public and the interface of these services have the look and feel of public services. For example, getting a driver's license or visiting a doctor can seem like it is fully public, but the access is partially or fully commodified through user fees where the service delivery is provided through a private company but subsidized by the government so the user is not paying the full price at the point of entry.

In these cases, the process of bringing the service back into full public ownership and control can appear convoluted and messy. The loss of knowledge and capacity to provide these services is a large barrier to overcome through bringing a service back into the public sector. The barrier is almost as large as the creation of new productive capacity. Limited capacity and knowledge is not impossible to overcome, but given that this process is ongoing it is not necessarily what socialists should be focused on during crises.

To be clear, the crisis we're living through is not the marketization of driver's license production. It is the wholesale exposure of the inadequacies of health and care service sector to provide needed supports. The failure is exposed because it is reducing both the quality of life of the working population and the economic capacity of capital. This failure has been brought to the public by the failure of the state-manufactured market in care services. This failed project was the chosen process of neoliberal privatization of these services in an attempt to transfer wealth and profit generation to capital that was running out of low-risk investments. Much has been written about the marketization of these services and the asset transfer to the private sector.

Assets and service delivery

The re-introduction of services into a decommodified and publicly administered service needs to be the current goal of restructuring. There are two separate parts that need to be dealt with which make this easier:

  1. Property/asset management
  2. Service delivery

Contrary to established wisdom, the public sector is very good at asset management and investment. In fact, the reason that the transfer of wealth to the private sector has been such a successful program under neoliberals to prop-up capitalism is that so much land and assets were publicly administered so well.

The re-centralization of property ownership under different organs of the state is equally easy. There are already several arms of the government dedicated to this process from the Canada Mortgage and Housing Corporation to arms of the provincial (and municipal) government asset management departments. The expertise of asset management already exists at all levels of government.

Care service delivery is also very easily provided by the government. In essence, the provision of service is simply the hiring, management, and coordination of those with the skills to provide front-line services. Something the government already does. Indeed, when the government sent in armed services personnel to support long-term care homes, it exposed just how easily the state can intervene in service delivery.

When separated into these centralized organizations, it is easier to think about the decommodification of services and bringing the service into the public system such as child care, long-term care, retirement services, home care, and housing. Removing the private sector and eliminating the corporate structure that supports a commodified service delivery has the added benefit of moving wealth back into the public system while increasing the efficient use of these assets. The efficient ownership and delivery of these services allows the provision of the same amount of service at higher quality and with workers who are fairly compensated.

Elimination of profit is not enough

There continues to be calls for the elimination of profit from the system, but this is not enough to address the true nature of the failure of the corporatized care services industry. The profit motive starts at the asset ownership (the buildings and land) and the service provision is a secondary thought to many of these companies. To replace this failed structure, the state must intervene in an as planned and sophisticated way.

The additional benefit of this process is that it can be applied to many other areas of the part of the economy owned by large capital that has failed. These include the provision of land to local small capital, transportation, restructuring space to make it safe and clean, the housing crisis, and the increased costs of medical products and services. When the specific skill-sets of ownership are broken down into their respective parts (assets and services), the leveraging of what the state does well are more easily found and the efficiencies more easily applied.