Republican ideas could provide the framework for a new and more democratic economy

The prospect of creating a more democratic economy is currently remote, despite the occasional warm words of politicians and campaigners. However, the resurgent interest within academic circles in republican ideas may help to foster the development of a framework to bring these efforts towards democratising the our economy, according to Niki Seth-Smith

Co-operatives are a more democratic kind of commercial entity (Credit: HarryPope, CC BY NC ND 2.0)

Call yourself a ‘Republican’ today and people will either think you are a member of the US political party or want to guillotine the Queen. Yet a resurgence of interest in republicanism within academic circles is reclaiming the tradition, while the post-crash political landscape has brought to the fore demands for citizen participation and an interest in sharing control of the economy that can be read as republican in spirit.An emerging contemporary republicanism within academic circles could provide a framework for building a citizen-led economy. But is there the political will to begin developing this kind of agenda?

In ‘A Discourse on Political Economy’, Jean-Jacques Rousseau gave his take on how a government should tackle inequality: ‘prevent extreme inequalities of fortunes; not by taking wealth from its possessors, but by depriving all men of means to accumulate it; not by building hospitals for the poor, but by securing the citizens from becoming poor’. This is a pretty good definition of today’s buzzword ‘pre-distribution’. Rousseau was a republican who applied these principles to his thinking on the economy, and it is this tradition of economic republicanism that is now being re-examined within academia.

Since the first colloquium on the subject was held in Paris in 2007, thinkers across Europe and the US have been furthering the application of republican thinking to the market-driven developed world. Spain, where republican theory was explicitly used as a guide by the Zapatero government in 2004-2011, has provided practical insight in this field, while in the Republic of Ireland, Fintan O’Toole has argued for radical reform to implement genuine republicanism. We might expect American academics such as Michael Sandel, Alex Gourevitch and Thad Williamson, but the renewed interest in academic circles is not limited to republics. In Britain, the work of Phillip Pettit and Quentin Skinner is being read in a new light, towards developing a republicanism that can provide an alternative to market domination.

To do so means challenging the theory that republicanism, with its seeming dependence on civic virtue, is incompatible with our modern world of competition and commerce. It requires a persuasive distinction to be made between the definition of freedom as the ability to not live ‘at the mercy of another’, what Philip Pettit calls non-domination, and the libertarian idea of freedom, that in practice includes the freedom to dominate. Pettit is just one fore-runner in the emergence of a contemporary republicanism that seeks to reaffirm the market as constructed through public, political action, rather than as belonging to the private realm. Yet key questions remain surrounding the application of republican principles to current political economy. Are the demands placed on citizens in a functioning republic realistic in the context of a market economy, with its valorisation of the individual and disregard for the common good?

Imagining a state that directs law and policy towards the common good, delivering the economic conditions needed to both empower and secure freedom for its citizens, is not only a republican pre-occupation. Since the financial crash of 2007-2008 launched the world into economic volatility and crisis, it has been perhaps the central question of our times. The 99% slogan of the Occupy movement and los indignados referred not only to increasing economic inequality but to the dominance of a wealthy oligarchy over the many. The claiming of public space for deliberation and decision-making for all citizens has been a common trend in contemporary social movements around the world, from Wall Street to Tahrir Square and Kiev’s Maidan. That the radical democracy and participatory budgeting practiced by these citizen-led movements are not commonly read as republican signifies the failure of the tradition to shed the legacy of its classical roots. Many still associate republicanism with a slave-owning (male) minority, at leisure to concern themselves with the affairs of state.

We might look to policy circles for a greater recognition of the relevancy today of republican ideas. Certainly, austerity has confronted social democrats with an urgent need to look beyond a reliance on social spending and distribution through taxation for the creation of a fairer society. While the narrowly avoided kamikaze collapse of the markets validated the need for greater state regulation, the aftermath has only strengthened the hand of small-state neoliberalism. Faced with the apparent absence of a functioning new economic paradigm, parties have been looking increasingly to the possibilities presented by economic democracy. Worldwide, more than a billion people are now members of some form of cooperative as collective owners and principal beneficiaries. Since 2008, Britain’s co-op sector has grown by almost 20 per cent. The amount of shared ground between Blue Labour and Red Toryism shows recognition across the political spectrum of the need to shift from sharing wealth to sharing control of the economy.

Looking at the cooperative economy through a republican lens gives new insights on the challenges that lie ahead. The bailout of the Cooperative Bank and the increased use of outsourcing at John Lewis and global leaders such as Mondragon, raise the difficulty of such models competing as heavyweights in a capitalist economy. A patchwork of scattered ventures hardly delivers citizen participation, and the interests of employees may not align with those of the common good. In the US, the Democracy Collaborative has done much work on the challenge of bringing these efforts to democratise capital to scale with the aim of developing a new economic paradigm. Joe Guinan, a senior fellow, has argued that cooperatives are insufficient in themselves, but should be used as a jumping off point for more scalable forms of democratic wealth-holding, such as public banking and ‘pension fund socialism’. Another possibility for democratising capital is to consider how we might make creative use of sovereign wealth funds, taking the example of the Alaska Permanent Fund as a model. This could offer one way of helping to develop a universal and unconditional basic income to promote the citizen’s interest in non-domination.

Republicanism could provide the framework for such a move to bring economic democracy to scale. It could also provide a measure by which to judge new ventures and models. Take the Big Society, Cameron’s pet project at one time, which made magnificent promises in the name of empowering citizens. Its practical application, and that of the Coalition’s Localism Bill, can be seen to have shifted responsibility for delivering services and managing budgets onto the local and community level, while effectively withholding power through enforcing cuts and strengthening government oversight, as with Gove’s current dominion over education provision. Holding the Coalition’s policies up to the goals of facilitating civic participation, securing genuine freedom for citizens and delivering the common good, we can see how reforms have been clothed in republican rhetoric, but failed to deliver on the principles. The quandary of leisure and ‘civic virtue’ also stands, as citizens active in Big Society schemes are often retired and privileged community members with the luxury of spare time.

The heyday of socialism is over, and neo-liberalism has exposed in high relief its self-destructive reality. There are those who say we live in a non-ideological world, and point in particular at amorphous new social movements without party or leader. Perhaps, far from being apolitical, demands across the political spectrum to empower the 99% with real democracy are republican in spirit, as are pragmatic efforts to share control of our wealth and workplaces. Currently, there is little recognition of the relevancy of republican ideas to political trends since the financial crash. While there has been cross-partisan interest in furthering economic democracy in these straightened times, within Britain these efforts have been relatively piece meal thus far. The resurgent interest within academic circles may help with the development of a framework to bring these efforts towards democratising the economy to scale at a national level. There is little political will in this country to appreciate what might be a developing paradigm. Yet it is certain that we need one, and republican ideas may point to a possible future that deserves wider reflection.

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Note: this piece originally appeared on the IPPR’s website under the title ‘Democratic wealth: Could republican ideas provide the framework for a new economy? and is reposted with permission. It represents the views of the author and not those of Democratic Audit or the LSE. Please read our comments policy before posting. The shortened URL for this post is: https://buff.ly/1o2eVFx

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Niki Seth-Smith is a freelance journalist and editor for publications including openDemocracy.net, London Review of Books and the Independent. Download Democratic Wealth: Building a Citizens’ Economy, a free e-book on this subject, published by openDemocracy.net and Politics in Spires (a blog hosted by Oxford and Cambridge universities).