One of the more eye-catching policies to come out of this year's Liberal Democrat autumn federal conference in Brighton concerned addressing the apparent malpractice of the water companies. Following a passionate debate, conference-goers overwhelmingly backed a policy motion entitled Restoring our waters: Britain's water company crisis.
It commits the party to converting failing privatised water companies (such as Thames Water) into mutually owned companies, where water customers own the companies and have a say over how they are run. The profits of such water mutuals would be reinvested for the good of the company and its customers.
Mutualisation is a democratic and profoundly liberal alternative to nationalisation and privatisation. A mutualised company is one owned by its customers or employees (or both) rather than by state bureaucrats or by elite shareholders and private equity firms. Mutuals range from building societies and mutual insurance firms to consumer-owned co-operatives and traditional worker-owned cooperatives. They represent neither state ownership nor private shareholder ownership, but customer and employee ownership.
During the debate in Brighton, Tim Farron, our party's environment spokesperson and former leader, described the water mutualisation policy proposals as "proper Grimond Liberalism". Jo Grimond's name might be seldom heard from conference platforms today, but the party’s leader from 1956-67, and again briefly in 1976, has left a massive intellectual footprint in the party.
It was in homage to Jo, that a group of Liberal Democrat activists came together in July this year to found The Grimond Society. It has been formed to campaign to put cooperatives, mutuals, social enterprises and employee ownership more broadly back at the heart of Liberal Democrat policies.
It is our ambition to submit a policy motion on co-operatives and mutuals to next year’s Liberal Democrat spring conference in York. We are also in the process of applying to become an affiliated organisation of the party.
The Grimond Society is striving to restore "proper Grimond Liberalism" within the party. Under the historic radical liberal slogan of "ownership for all", we want the Liberal Democrats to once again become a bastion of workplace democracy, consumer stakeholding and economic cooperation. We want to build a liberal society where workers and consumers alike own and have a stake in the places where they work and the services they rely on.
Grimond spent much of his political life advocating radical economic policies to distribute power, ownership and profits more equitably between bosses and workers. Leading a major party when British politics and voting behaviour was highly aligned along class identity, Grimond sought to bridge the divide between capital and labour. He sought to establish an economy of "worker-owners", where employees would have a guaranteed right to company board representation, company share ownership and some amount of power in their workplaces.
Put simply, Grimond sought to apply liberal and democratic principles to the workplace and to the marketplace. Such ideas were radical decades ago and they remain radical and perhaps even more necessary today.
In his 1978 book, The Common Welfare, Grimond discusses his views of mutuals, especially co-operatives, in great detail. Much of his discussion of co-operatives centres on the success of the Mondragon Corporation, a worker-owned co-operative in the Basque Country of Spain. Grimond describes co-operatives as representing "socialism without the state".
However, Grimond's "socialism" could not have been further removed from the top-down state socialism of the 20th century. He envisioned a situation where the employees of a firm, each as owners
with democratic power within their firm, would be loyal to the institution of their cooperative rather than the state. It represented democratic, horizontal power relations within the economy, rather than top-down socialist bureaucracy.
Following his observations in the Basque Country, Grimond notes how workers' cooperatives "seem to have gone some way to dissolving the antagonism between capital and labour while retaining a free society". He also writes that
once the divisions between capital and labour, teacher and pupil, bureaucrat and client, governor and governed are blurred the very framework of modern society is altered.
In 1979, the year following the publication of The Common Welfare, Grimond supported Robert Oakeshott in establishing Job Ownership Ltd, which became the Employee Ownership Association. Ultimately, radical liberals have always seen employee ownership as a means of democratically bridging the class divide between capital and labour.
While Grimond sympathised with syndicalism and cooperative socialism, his view of the economy was neither fully syndicalist nor was it socialist. He envisioned a much more decentralised and democratic form of a competitive free market economy than the one we have been familiar with under neoliberalism. It would be one where the bureaucratic functions of the state would be greatly reduced and where the internal structure of the firm would be radically transformed and democratised.
Grimond’s political economy represented a radical alternative variant of capitalism; a competitive free market capitalist economy where property ownership and power within the workplace were distributed equitably throughout society. It was egalitarian in terms of the distribution of property ownership and semi-syndicalist in its advocacy of workplace democracy and worker ownership within the firm.
It is now the job of the Grimond Society, to translate Grimond’s support for cooperatives and mutuals (through Liberal Democrat policies) into reality. As Grimond said:
if you want a society in which every community gives as much satisfaction to its members as its circumstances will allow … you cannot ignore the organisation of work.
Our road to building such a society begins in York at next year's spring conference. We hope you will join us and support us in putting cooperatives and mutuals back at the heart of Liberal Democrat politics once again.
Dr Paul Hindley is a member of the Grimond Society and a Liberal Democrat activist in Blackpool. He was recently awarded a Politics PhD by Lancaster University.
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