In the Age of Disaster Capitalism, Is ‘Survival Socialism’ the Solution?

In the Age of Disaster Capitalism, Is ‘Survival Socialism’ the Solution?

In the Age of Disaster Capitalism, Is ‘Survival Socialism’ the Solution?

A look at the British Labour Party’s plan to transform the economy from the ground up.


Disaster capitalism: Perhaps you’ve heard of it. You’ve certainly lived with it. Well described by author and activist Naomi Klein, it’s the scenario in which big banks and corporate businesses profit off crises like earthquakes, bankruptcies, and war, taking advantage of people and places in trouble to enact policies that allow them to amass more power and wealth.

What’s gotten far less press, at least until now, is what I’m calling “survival socialism”: the plethora of alternatives that emerge as people under pressure conjure solutions to their own troubles in ways that aim to deliver not profit as much as social value—better services, cheaper prices, more social cohesion, a greater ownership share in production, a more vibrant democracy, a healthier environment.

Across the world, such practices and policies vary, from land trusts and community gardens to local-first contracting and public takeovers of private utilities. The Transnational Institute, a progressive Amsterdam-based think tank, reports that more than 800 cities in 42 countries have recently taken over crucial utilities: water in Grenoble, France; energy in Boulder, Colorado; community health clinics in Delhi, India. Big cities and small towns are doing it, but some of the most exciting efforts are happening in some of the most obscure places, where the need and the neglect have been the greatest.

Until now, most of these experiments have been small-scale and local, bubbling up from the grass roots in solitary bursts, with little coordination and few high-profile champions. But some of them might soon go mainstream, if a pair of Labour Party politicians—themselves fairly obscure until recently—form the next government in the United Kingdom. While the ruling prime minister, Theresa May, has until May 2022 to call an election, the recent series of high-level resignations from her Conservative-led government could well hasten its collapse.

Whether that day comes sooner or later, the Labour Party has been preparing. On May 19, Jeremy Corbyn, the party’s leader, and John McDonnell, shadow chancellor of the Exchequer and Labour’s top economic minister, welcomed attendees to this year’s State of the Economy Conference at Imperial College in London. The gathering—part of a series that began in 2016—took place just a few weeks after local elections in which the Labour Party had held steady, picking up a few new members while losing others. Weathered parliamentarians and newly elected councillors mingled with popular alt-economists, Occupy Wall Street graduates, and even Selma James, the 89-year-old guru of the Wages for Housework movement.

The purpose of the conference was to solidify Labour’s vision for a “new economy”—and, just as crucially, strategies to deliver it. People crammed into workshops on the minutiae of public banking and how to renationalize the railroads and heard from party leaders as well as a few big-name journalists and public intellectuals. But more than any celebrity speaker, the hit of the day seemed to be the sense of inclusion itself. “It’s important that elected representatives lead these,” explained McDonnell, a hawkeyed 66-year-old whose energy seems ready to burst out of his button-down shirt. “But it’s important also that those elected representatives listen to people.”

Grassroots activists rarely rub shoulders with party leaders. It almost never happens in the United States; top Democrats might address party events, but they don’t listen in on workshops. Corbyn and McDonnell did. White-haired and slope-shouldered, Corbyn agreed to every selfie that was asked of him and, corny as it sounds, seemed to mean it when he said in an interview: “You have to have a democracy in process at a local level as well as a national level, and within your party and within your movement…. What John McDonnell and I often say is, ‘It’s not when I win an election—it’s when we win the election.’ It’s about the empowering of people.”

It’s a heady experience for an expat who observed the Labour Party drift right until 2015, when Corbyn, an outspoken anti-war socialist, won the leadership. Labour is now the largest political party in Western Europe, boasting some 552,000 members. Its government-in-waiting is packed with men and women in their 30s or even younger, mostly outsiders to party politics until Labour brought them inside. Still, Corbyn cynics are a dime a dozen: “Not I but we” is just campaign talk, they say; all this participatory process, this “new economics,” is just window dressing on the old, discredited, top-down state socialism of the past century.

One thing’s for sure: Corbyn and McDonnell know they owe their improbable rise and Labour’s historic gains in the last general election to their promise of a radically transformed economy and society. Labour’s 2017 platform included nationalizing the railways, the Royal Mail, energy, and water; increased taxes on those earning more than £80,000 a year; bringing more assets into public hands; and investing in worker-owned businesses, fee-free education, and a privately funded national investment bank as well as regional banks to fund development.

Until Labour has big national power, however, those promises are only as good as the (very popular) manifesto they were written in. That’s why Labour’s gains at the local level are important. As McDonnell is quick to point out: “We’re not in government, but we are in control in certain local councils. If we can effect change at the local community level sufficiently, that will enable us to build up to a change at the national level.”

Matthew Brown is a councillor in Preston, a small city in Lancashire County, and one of the men Corbyn and McDonnell are excited about. Brown’s star has been rising since he became synonymous with the “Preston model,” a set of policies and practices designed to build and keep wealth in the community by emphasizing local investment and procurement.

Brown’s a Corbyn fan. He’s also a Preston man. His city of just over 140,000 people traces its history back to the seventh century. In the 1760s, Richard Arkwright invented the spinning frame in Preston and helped jump-start the Industrial Revolution. Textiles were big there—so much so that Karl Marx, who visited to report on local unrest, once hailed Preston as “Our St. Petersburg”—followed by engineering. But deindustrialization in the last half-century hit the city hard. By 2010, Preston was scoring near the top of the national charts for suicide, and near the bottom for employment and well-being. Under the UK’s austerity policies, aid from Westminster shrank, even as the lines of people queuing up for unemployment, disability, and income supports grew. Brown knows this firsthand because, for 19 years, he worked in the local benefit office.

“It felt as if we’d been left behind. The economy wasn’t being run for us; it was being run for someone else, and people like us seemed to have no place in it,” he recalls.

Brown is tall and bald, mid-40s, but, even now, you can imagine him as a boy, smart and obsessive, taking radios apart to study their workings and reassemble them better. What he’s been tinkering with since he was elected to the Preston City Council in 2002, at age 30, is the machinery of city government. In 2011, after a 12-year plan to create jobs fell apart when a powerful name-brand retailer pulled out of what was to have been a shiny new shopping center, Brown reached out to Ted Howard of the Democracy Collaborative, an American “think-and-do tank” that he’d been reading about online. The collaborative helped start the Evergreen Cooperatives in Cleveland.

The model that the Democracy Collaborative developed in Cleveland links worker-owned, for-profit businesses, or cooperatives, to the supply chains of several large local “anchor institutions.” The cooperatives supply goods and services to these institutions while siting their businesses in, and hiring workers from, the lowest-income, most disinvested neighborhoods. The first company under this model, a “green” laundry with eight employees, opened its doors in 2009. This May, Evergreen announced that it had secured the contract for all the laundry services for the Cleveland Clinic, one of the premier health systems in the country. “It’s really an opportunity to create equity and inclusion for very marginalized neighborhoods in the city,” Howard says.

It was also, it seemed to Brown, a way for Preston to retake control of its own economy. Soon he, Howard, and Neil McInroy of the Centre for Local Economic Strategies, in Manchester, were studying where Preston’s money was going. Of the £750 million spent annually on procurement and contracting by the city’s top six institutional spenders, only 5 percent went to businesses in Preston. Ninety-five percent was leaking out, much of it to firms in the more prosperous south of England.

To stanch the bleeding, Brown et al. did not at first attempt to create cooperatives from scratch. Instead, they approached six institutions that received public funds—including the City Council, a university, and the county constabulary—and cut deals to alter their procurement practices in favor of supporting local suppliers and “social value.” These six organizations spent £38 million in Preston and £292 million in all of Lancashire in 2013. By 2017, these sums had jumped to £111 million and £486 million, respectively.

In the meantime, the City Council has set to work nurturing groups like the Co-operative Development Network, which brings together members of existing and prospective cooperatives to provide mutual support and advice. And Brown’s doing what he can to get co-ops for food and information technology off the ground next.

Where wealth still leaks out, the City Council looks to fill the gaps—in part by redirecting the pension fund to invest locally. On a short walk around City Hall, Brown points to a block of affordable housing built with the help of the pension fund, as well as to a covered market, which used a locally owned construction firm that employs local contractors. New student accommodations have also gone up.

These efforts appear to be paying off. In 2012, Preston became the first living-wage employer in northern England—and in 2016, it was rated the best city in northwest England in which to live and work. This May, voters signaled their approval by expanding Labour’s majority in Preston; Brown was selected to serve as council leader.

Does the labour party see its St. Petersburg in Preston? It’s certainly keen on spreading the word about the Preston model. Earlier this year, the party began a Community Wealth Building Unit, intended to share ideas among people working on similar initiatives, while also connecting local councillors with technical assistance. Brown, McInroy, and Howard are all part of the effort. McDonnell came to Preston to announce the launch, declaring that “this kind of radicalism is exactly what we need across the whole country.” Corbyn hailed Brown from the stage of Imperial College in May, saying: “Thank you, Matthew, for all you do.”

The fact is, Corbyn and McDonnell need people like Brown, and places like Preston, for political as well as practical reasons. Labour has no heavyweight socialist equivalent of Milton Friedman and his “Chicago boys,” none of the well-funded think tanks that cooked up neoliberalism. It depends on local politics to get more voters engaged and to preserve their enthusiasm for democracy—and for Labour—until the next national election. It needs to transform the economy and society, because that’s what Labour promised. It’s also what most people agree this moment requires.

Unless the turmoil among the Tories forces the nation to change course, Britain after Brexit will have a lot to learn from Preston after austerity. With less than a year to go before the United Kingdom leaves the European Union, more than one in five UK manufacturers say they expect to lay off workers, according to an industry study. The country is going to have to do more with what it has and rely less on begging or bribing global corporations to pay fair taxes or a living wage. It will also have to grapple with the hit that London’s financial center is about to take—a hit that, while painful, isn’t necessarily a bad thing. You don’t have to be a student of Thomas Piketty or Joseph Stiglitz to know that the outsize influence of speculative financial institutions has damaged Britain’s cohesion far more than the government could repair. Taxation and redistribution must be part of any solution, but they alone can’t fix a 1 percent economy.

Survival socialism, as in the Preston model, is a way of regenerating a locality, helping it recover from the assaults of the past while preparing for the challenges of the future, such as automation. “Socialism is fundamentally important,” McInroy says, “because if you don’t have that plural ownership of wealth and means of production, we’re absolutely condemning millions of people to low wages [and] poor conditions in perpetuity.”

Yet the Preston model is also just a starting point. While Labour supports cooperatives as the best option in the private sector, its priority is to put more production back into public hands at the regional as well as the national level. “Put [government funds] back into the bottom of the system,” McDonnell explains, “because that’s where real changes all come from.”

Conscious of those who say this is just a throwback, Labour seems determined to learn from the past. The 20th century’s nationalized industries were more effective than people give them credit for, but they were also easy for Thatcherites to vilify because they were distant from the average consumer, and workers were excluded from key decision-making. “The BBC is the classic example: [It’s] supposed to be a public-TV corporation, but [the] public has virtually no say,” notes Andrew Cumbers, the author of Reclaiming Public Ownership: Making Space for Economic Democracy, and co-author of a 47-page pamphlet that McDonnell commissioned last year on “Alternative Models of Ownership.”

“When Labour ministers established publicly owned companies in the 1940s, they didn’t want citizen engagement—they were afraid of syndicalism,” Cumbers adds. The Labour Party of the time was also very Fabian, which is to say, very confident that “experts” knew what to do.

“Jeremy’s a break with that,” says Hilary Wainwright, a longtime feminist scholar and activist who’s known both Corbyn and McDonnell for decades. “[He represents] a new politics as well as a new economics.”

There are challenges. At present, the local decision-making authority is very weak, and there remain critical questions about “community”: Who’s in it? Local first-ism can slip into xenophobia if every community is not included; as it is, Britain’s ethnic minorities tend to be overpoliced and underserved by local government. Moreover, medical and educational anchor institutions are often the prime gentrifiers of poor neighborhoods. In Preston, most of the residents I spoke to had yet to hear of the Preston model. Clearly, some relationships have yet to be addressed.

There remains an ideological question as well. Taken to a national scale, local-first purchasing looks a lot like protectionism. More important, does survival socialism—the bottom-up, self-help sort—let the state off the hook for seeing to people’s basic needs? Recent experiments under the Conservative government to devolve health-care spending to local authorities have resulted in more competition from the private sector, not a strengthening of the National Health Service.

The British Parliament is about to enter its long summer recess. If the Conservatives come out of it as divided as they went in, Labour could be grappling with all of this sooner rather than later. In the meantime, Brown will keep tinkering. His next ambition is to start a locally owned Bank of Lancashire to stop capital leaking to the shareholders of London and Wall Street.

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