​Interview with Bertie Russell and Keir Milburn, by Mauro Castro

Mauro Castro | After decades of Public Private Partnerships, the main arrangement built into neoliberalism to boost the market, you talk about Public-Common Partnerships (PCPs) as an institutional shift that favours a transformative socialist policy and accompanies a desirable ecological transition. What is the context in which this idea arises? At what moment and why did you start to intervene in institutional design as part of a strategy of political transformation?

Bertie Russell | The surprise emergence of Corbyn and Corbynism after his breakthrough performance in the 2017 election opened a period of what I’ve called left hope, a sense that the future was opening up in some way. Not because the left had an electoral project which we could all get behind, or that an electoral project could deliver all that we desire, but because the prospect for a progressive break with neoliberalism emerged in British politics, a new frontier for thinking about an democratisation of the economy and the strategies for doing that.

This new frontier took us beyond binary ways of thinking about transformative socialist strategy: either delivering social change through the state or supercritical positions of the state more aligned with principles of autonomy. It was a moment to move around dual strategies. That’s not the same as simply calling for public ownership or just calling for a proliferation of self-help projects, but by actually asking: how do we start to create new economic organizations? How do you design institutions that fit for the sort of wider transformations we need to undertake?

Of course, we were influenced by what was happening in Spain, the 15M, and this question of what do we do now with this problem of the state. How do we move beyond the cycles of mobilization that are outside of the state, without becoming a fully institutionalized party?

Keir Milburn | The office of the Shadow Chancellor John McDonnell released a report called “Alternative Models of Ownership” in 2017. When he was presenting the report he said: what we need to think about is a strategy of being in, against and beyond the state. Use the tools of the state in order to devolve power outwards, basically to try to democratize different elements of society. The shadow chancellor was talking not just about renationalizing public services, but thinking about ways in which you can do it in a fundamentally different way to the centralised forms it took after the Second World War.  

One of the cores of the ‘McDonnell’ or ‘Corbyn’-ist project was this idea of institutional reform and the idea of democratising the economy in different ways. It was a turn towards thinking about institutions, and what institutions can do to foment wider processes of transformation.So new thinking, think-tanks and policy organisations began flourishing, when they saw an opening up of the horizon around Corbynism. Organisations like Commonwealth or Autonomy were working on strategies for economic democracy: from four day working weeks, to Universal basic income, to our related work on Public-Common Partnerships. It was a big and fruitful debate that really took root from 2018 onwards. With specific regard to our own work, there was an article called “The institutional turn: Labour’s new political economy” (released by Joe Guinan and Martin O’Neill in the journal called Renewal). As a response we wrote an article in the same journal called: What can an institution do? Towards Public-Common partnerships and a new common-sense.

The introduction of markets and reform of institutions has been part of the neoliberal orthodoxy of the past 40 years.

If people are going to start to turn towards institutional reform, we need to think about how interaction with institutions can shape people, how we act, how we feel, and how we think. One of the principal techniques of neoliberal institutional reform is the introduction of competitive markets across institutions. The university is a very good example. They’ve been reformed so that every academic is in competition with every other academic and every department is in competition with every other department, over artificially scarce resources. 

So, the introduction of markets and reform of institutions has been part of the neoliberal orthodoxy of the past 40 years. And it has been done, in part, to change the parameters of how people behave, and to some extent how they think, about the world. How can you reverse that? Can you create experiences of meaningful democratic participation in order to train people to be more competent democratic subjects? Basically, that was one of our initial lines of thought when we started thinking about PCP’s.

Mauro Castro | Although you talk about there being no single model, could you describe the principles and main ingredients of this PCP’s? How are they reverting the engineering of the neoliberal governance model and how did they democratize the economy? Can you give us a real example that could illustrate this in practice?

Bertie Russell | At their core, PCP’s involve a joint enterprise. It means the establishment of a business that could run any number of different things. An energy company, a local market, agricultural land, a pharmaceutical company, breweries or cultural spaces. In the running of the business there’s an essential partnership between: a ‘common association’, public bodies and wider stakeholders. So, you can think of it as an asset – or a resource or even a service – that is sort of jointly owned and governed by these three types of agents. 

We use the term ‘common association’ to refer to an organized community (that almost certainly has to take a legal form) that’s invested in the running of that asset, service or space and has its own internal democratic processes. The public body could be any kind of state body, for example, a Transport Authority or a city council. And a panel of stakeholders consisting of everybody whose interests are not reflected by the Common association or perhaps people who’ve got specialized knowledge which isn’t encompassed or doesn’t emerge from this tacit knowledge of the common association. An environmental expert, for instance, if we’re talking about water or something like that. Or, if the business has something that’s really affecting local residents, such as an urban market, a resident association will be involved.

So that’s the sort of joint governance, how that’s run. The joint enterprise is thus a place where these different logics are in dialogue, and where different interests have to be managed. In practice, these PCPs take quite different forms, reflecting the diverse interests and possibilities of a particular case. But they all revolve around the creation of a joint ownership and governance structure for a particular enterprise, and the subsequent empowerment of organized communities to control how the social surplus of this enterprise is used.   

Keir Milburn | Another element is that PCPs propose a role for public institutions in both de-risking and enabling processes of commoning. We can understand that through reference to public-private partnerships (PPP). One of the main functions of the state in a PPP is to ‘de-risk’ private enterprise. When you de-risk something, you are basically subsidising private profit. The ‘public’ take on the risks, you socialise the risk, and you privatise the profits. So, the role of the public in our idea of PCP’s would be to de-risk common enterprises, de-risk projects of common ownership and governance.

These Public-Common Partnerships revolve around the creation of a joint ownership and governance structure for a particular enterprise, and the subsequent empowerment of organized communities to control how the social surplus of this enterprise is used.

How does that take place practically? Let’s use the example of a PCP’s in a market in North London, known as Wards Corner, where we’ve been doing some ongoing work. There is a strong group of local people and traders and so on with a long history of organising together with fantastic ideas and great plans for the market. There are many of the ingredients that are important to make a common project like this work, but you still come up against the question of how exactly you’re going to generate the money to purchase a building that would cost millions of pounds? A building that’s currently considered unsafe to use due to the lack of investment in the past? This is incredibly unrealistic for a group of people who want to run these things as a community enterprise. One way this can happen is for the asset to be transferred directly from a public body, but this necessarily doesn’t secure the resources for its redevelopment. Another thing that can be done is to use existing assets that a public body has to guarantee a loan for the common association. So, in this case, a public entity like Transport for London, leverages its resources to support access to finance that is, otherwise, is incredibly hard for communities to access. Although the ultimate risk in this situation lies with the state body, the state can act as a financial enabler beyond just the provision of grants. In the context of chronically under-resourced local and regional authorities, this opens up different avenues for public financial support. 

One of the core challenges we face in precipitating meaningful social change, something that both locks us into our current destructive pathways and forecloses any alternatives, is how our investment decisions are being made.

Bertie Russell | One of the underpinning principles of the neoliberal agenda has been to insulate economic decision making from democratic influence. Quangos (Quasi-autonomous non-government organizations) or central bank independence are classic examples of this. This ‘hollowing out’ of democratic agency has been a deliberate project. You know, in the 1970s, people like Samuel Huntington talked about an “excess of democracy” and even suggested “desirable limits to the extension of political democracy”. 

One of the core challenges we face in precipitating meaningful social change, something that both locks us into our current destructive pathways and forecloses any alternatives, is how our investment decisions are being made. We saw a video by the head of ‘responsible investment’ for HSBC Asset Management (a huge bank) who said something like: we make investment decisions based on six year cycles. Anything that takes place outside this period is not going to get included. So we are not going to include concerns about climate change in our investments. Those are the sorts of people making decisions about what types of human activity does and doesn’t get resourced. Those are the economic and political imperatives informing those decisions. If we want other things to happen, if we want different futures to open up, we have to change who makes investment decisions and the political imperatives and economic imperatives that are driving them.

So, to reverse engineer this underpinning principle of the neoliberal agenda, we think it’s really important to set up these institutional forms where there is space for people to make democratic decisions about investment of the social surplus. 

Using again the example of the market in North London. Urban development in the UK as elsewhere follows a profit-driven model, where the wealth generated by development is extracted from communities. If the community plan for the market in Tottenham (north London) goes ahead, one financial forecast suggested that within the first few years, the market will begin to generate between £2-3 million pounds a year for reinvestment. So, there will be the opportunity to use this surplus and draw up a democratically decided upon common plan for the area. Initial discussions would be around what needs to happen in the West Green Road/Seven Sisters neighbourhood (which is the local area around that market), where we’d expect to see proposals for social infrastructure such as a community nursery. This might take place in the same building as the market, or it might mean securing additional properties. The design for the building itself already includes new community spaces, along with office spaces. The wider site on which the building sits has the potential for the development of social or commonly owned housing, something affordable and accessible to the community rather than an asset to be milked by developers and investors.

Keir Milburn | We think about PCP’s as transitional organisations that can function as democratic ‘motors’ for wider change. We’re trying to think about how you transition from where we are now to where we need to go, basically. Where we are is obvious. Where we need to go is obvious. The broad dynamics of where we need to go are almost given by problems such as climate change, ecological collapse, deforestation and so on. People have mapped out the safe operating space for humanity based on the nine Earth systems processes that human civilization depends on and not pushing them beyond that. But if you think about what seems politically possible at the moment, there’s a massive gap between what’s possible and what’s necessary. 

It’s through creating such opportunities for the direct and collective democratic control of this surplus that we can ensure the ‘returns’ accrued are social, not private.

So we think about PCP’s as an institutional form that starts trying to bridge this gap between the possible and the necessary. And these institutional forms have to be intentional. We think PCP’s are one of the ways we could start to move to a point where we have the capacity to control the immediate social surplus of specific enterprises, like the Wards Corner market, but also develop and exercise political leverage over wider issues of the control of distribution, ownership and investment.

One of the key things we were trying to think through was: how do you get a sort of self-expanding dynamic of the commons? We’re trying to mirror the self-expanding dynamic of capital where surplus gets invested in new capital, some of it goes off to buy mega yachts, but generally it gets invested again and again and again. But it does so to accrue private returns. In our design, a crucial element for the democratisation of the economy is bringing the profit of the joint enterprise into popular democratic control. Workers have a direct role in this, but it also means expanding to include organised communities more broadly. Whilst the Common Association participates in the joint governance of the enterprise, it also has a specific role: receiving any surplus that gets produced by the running of this asset (after operating costs and return of debts), and deciding democratically where that surplus gets invested, creating new PCP’s and other democratic enterprises. New PCP’s will also operate with a similar process. It’s through creating such opportunities for the direct and collective democratic control of this surplus that we can ensure the ‘returns’ accrued are social, not private.

Bertie Russell | In many ways, what we’re saying is not remotely new. In feudal societies, social surplus was accumulated by a King, largely to maintain a standing army to go and rape, pillage and extort others. In capitalistic societies, our social surplus is being accumulated by those who control capital, to much the same effect. We want collective democratic control over our social surplus, so we decide how to shape societies around us. Expanding the forms of collective social control over social surplus is at the core of everything we should be doing right now. Generating leverage over the legislative and redistributive functions of the state is one piece of this puzzle of transition, but this must rest on more fundamentally dispersed forms of social control. This takes us far beyond orthodox understandings of institutional economics, but into wider anthropological and sociological considerations about the structures through which societies reproduce themselves.  

This is where we need to be, but we are a huge distance from this. We are very far from being able to collectively exercise control over our social surplus. And we think PCP’s are an entry point: one of the ways we could start to develop our capacity to exercise political leverage so that we can control the wider social surplus, and that recognises how critically under-resourced we are to do this. I think it’s important to position these as part of a political strategy where, by building collective democratic control over surplus, learning to be democratic subjects together, and being able to mobilize resources as well, we’re in a stronger position to fight the things we really aren’t in a position to fight for now. We’re limited to strategies of going out on the streets and protesting or having strikes that can only exercise very particular types of leverage.

Common Good Funds represent substantial portfolios of land and property, much of which is considered to be inalienable – in other words, pieces of land or buildings which cannot be sold.

Mauro Castro | The future Law of the Social and Solidarity Economy of Catalonia seeks to recognize the model of community management of the public sector. However, we came up against legal impediments, such as the Public Procurement Law, which is ultimately based on European directives, which recognize the free market and “free” competition for the awarding of public goods and services. How have you overcome the legal limitations? Do you have strategies for hacking or generating counter-hegemonic norms? Can you talk to us about the different ways of policy or frameworks that have come through that have created opportunities to hack where we are?

Bertie Russell | Commons aren’t some natural processes that come from nowhere. It’s essential to have rules to defend and expand the commons, and frameworks and processes by which we can deliver and ensure equity and expand this kind of collective control of social surplus. There’s this particular quirk in Scottish history that originated in the 15th century: the Common Good Funds. These could be a good example to explore, not because they offer a perfect example of how things should be, but because they demonstrate that there is a possibility to think differently about the formal and legal role states can play in securing the conditions for commoning.

Common Good Funds represent substantial portfolios of land and property, much of which is considered to be inalienable – in other words, pieces of land or buildings which cannot be sold. By law, these assets must be utilised for the common good of the inhabitants of the former Burghs (a centuries old administrative-governmental body that, in Scotland, was wholly replaced by modern and political local authority structures in 1975). The way they typically operate is that a certain number of elected councillors will sit on the board of this Common Good Fund and they can receive and assess proposals from ‘former inhabitants’ of the Burgh. For example, the Inverness Winter Payment Scheme uses the income from these collective assets of the Common Good Fund to provide some support in winter to the families around the area that are facing energy poverty. The functioning of all of it needs to be modernised so there is greater legal clarity over the status of the Funds, and there needs to be a democratisation of how they function. But it doesn’t take much imagination to say, well, what if people are chosen from the community? What if we run these according to sortition? What if the Funds have collectively determined strategic plans over what these Funds should support? What if the Funds are used as ‘seed funds’ to expand the democratic economy, and ultimately to expand the number of assets brought under the stewardship of the Fund?

Keir Milburn | The legal forms that we’ve been using and “hacking” relate to a period from the late 2000s and early 2010s when there was a coalition government between The Conservatives and the Liberal Democrats. The then Prime Minister, David Cameron had this concept of “the big society”. Big society, small state, was the idea that partnered with austerity measures to shrink state provision. In practice, there was overall less public resource, and those resources tended to go towards privately well resourced and therefore comparatively more active communities with the necessary cultural capital. The main effect was to see state resources flow away from poorer areas to richer areas.

But there were some legal forms introduced and some legislative measures introduced which actually turned out to be quite useful. Community Benefit Society (CBS) or Community interest company (CIC) for instance were two different legal forms which allow us to recognize the singularities of communitarian projects. There were also some laws around the transfer of assets into community ownership, etc. Once again, left to its own devices this tends to support already active and privately well resourced communities to take over loss-making bits of the state such as libraries, swimming pools, etc. But it also provides something you can hack to use in a different way. And that’s interesting because the (centrist) interest in community power is seeing a renaissance in the UK at the moment. There’s a section of the Conservative Party keen on ‘community powered conservatism’, as they put it. So it’s quite interesting how you differentiate yourself from that.

Social Value imperative has mostly resulted in huge construction companies incorporating something incredibly insubstantial as part of their bids.

Mauro Castro | This idea of the need to differentiate leads us to the discussion of what we mean by communities and the debates around the social value modelling and how we make visible the kind of wealth (more use value than exchange value) produced by them. In the case of Patrimoni Ciutada we have advanced in the creation of new metrics to measure community value, public interest and social return of community projects. This is the Balance Social Comunitari. Do you have any experience in the construction of new metrics that allow codifying these practices from other parameters than the purely economic ones, under logics of efficiency and effectiveness that sediment public management regulations?

Bertie Russell | In the UK, a lot of the discussion on the left around this area has been around the concept of Community Wealth Building – a US-Anglo inheritance – coming from the Cleveland model and the Preston model, both about public procurement and anchor institutions. Preston, in particular, has become ‘famed’ for its use of these social value imperatives in order to use local procurement to try and keep wealth circulating within the area and justify their preferential procurement and prioritise things such as co-ops. Scotland is seeing the development of a Community Wealth Building act at a national level.

In legal terms, there is the Public Services (Social Value) Act 2012, ostensibly oriented to improve the economic, environmental and social wellbeing of a local area through procurement activities. A certain percentage of a public procurement decision has to be weighted on what sort of social value you deliver – not just on what you deliver in a cheap way – and that should be based on social value indicators. This takes us in an interesting direction, but the reality of a lot of these social value indicators is that they are very narrow, like the TOMs – Themes, Outcomes and Measures – framework, which do not value things like the ones we are talking about here: strengthening and expanding collective democratic communities. Because you can’t put a price on that. In practice, this means the Social Value imperative has mostly resulted in huge construction companies incorporating something incredibly insubstantial as part of their bids, like for example, five people getting a work-placement and training opportunity. It takes us to a point where ‘social value’ is another part of the corporate responsibility discourse; it has nothing to do with fomenting wider social change processes, or fundamentally changing institutions.

Wales made a small step forward quite recently in introducing the Future Generations Act. The Act has resulted in the generation of a wide set of indicators about the future wellbeing of communities (from what levels of nitrogen dioxide goes into the air to the promotion of the Welsh language). These ought to be used in a procurement process to evaluate whether something is a good investment decision or not. These are small steps, but they’re in the right direction, and we can learn from them.

In Scotland, the Scottish Crown Estate Act 2019 provides the legal mechanisms by which the Scottish parliament can manage, delegate, or transfer land held by the Crown estate to a range of potential managers or owners, including community organisations. But such transfers can only happen if these organisations can demonstrate, either financially or by financial equivalent, the benefits that they’re going to be able to deliver through receiving these assets. It’s technically possible to dispose of an asset for less than market value, but any return to the Scottish Crown Estate has to be complemented or balanced by wider additional benefits of an equivalent scale.

Measuring social value is a problem. We try to approach it tactically to achieve goals and as part of a transition strategy to transform things.

In other words, a community could take an asset, but they have to demonstrate why there’s more value in their activity than, for example, the establishment of a vast monocultural forestry reserve, or if a large salmon corporation came in and purchased fishing rights for a particular area.

On the one hand this is quite positive, opening up the possibility of community asset transfers. In which case we need really strong and robust ways of demonstrating the value of what we do. But the tyranny of this is that everything we’re doing is evaluated against market value. A value that does not consider negative externalities. So if you put a parking lot there, you might get a certain number of euros from the transaction. But what does that mean in terms of the cost of nitrous oxide production in the area? What’s the cost in terms of road traffic accidents? What are the ‘missed opportunity’ costs of other types of local economic development?

Keir Milburn | The way we try to think about this problem, which is a general problem about measuring social value, is to try to think of it in a more tactical way to reach our goals, but also as part of the bigger strategy of transition (that we mentioned earlier) where you’re trying to change things.

So, we have mobilised and come across forms of social value modelling in a more instrumental manner in order, for example, to negotiate for a building in London which contains union headquarters, lots of left NGOs, and also acts a bit like a social centre. This modelling of social value is a game we have to play, a tactic to access resources. But more broadly, we need to be working towards more fundamental changes in how you value things. This is part of why you want to insulate decision making around investment, so that communities can make their own decisions about how they prioritize activities or resources, without taking ‘market efficiency’ as the reference point against which they have to compete. When you prioritise something – like establishing a creche rather than buy-to-let apartments – that’s a mode of valuing something, basically. This means departing from only using measures of exchange value and metrics that speak in that language, but something which would make sense within the communities, within the sort of modes of valuing being developed within the communities themselves.⚫