March 31, 2021

Like many of us, the Devon-based farmer Guy Singh-Watson has mixed feelings about capitalism. As a farmer, he will inveigh against Thatcherism, the City and the toxic inequality and wealth and greed that he sees in London. But as an entrepreneur — he’s the founder of Riverford, a vegetable delivery company — he can’t but concede that the system is extraordinary at driving innovation.

This tension came to a head when, having built a company worth more than £20m, he had to decide on its future. Selling it to venture capitalists who would maximise short-term profits would feel “like selling one of my children into prostitution,” he said. So he handed the company over to its 650 workers. Singh-Watson retains a 26% stake; the rest of the shares are held in a trust, and the profits go to the staff — or co-owners.

These sorts of models have become increasingly common in recent years: according to the most recent figures, there are now 470 similar businesses, up 28% on the previous year. Research suggests employee ownership can boost productivity and profits as well as staff morale — and earnings.

“Covid, I’m slightly embarrassed to say, has enabled us to make profits that we’ve never experienced before,” says Singh-Watson. “Some of them will be shared with the co-owners, but they’re very keen that we invest large sums of money in improving our environmental credentials.” It’s the workers who get to decide how to spend it.

If anti-capitalism has become fashionable, it’s partly because the modern workplace often makes people feel disempowered. Joe Atkins, who works in the marketing department of Riverford draws a political analogy. “In a dictatorship, your voice is suppressed. And clearly that happens in so many businesses and sectors, and it’s why so many of us hate our jobs: we don’t feel like we’re contributing, we don’t feel like we’re listened to.” Riverford, he says, works like a functioning democracy.

At the moment, Atkins says, there’s a lively company-wide discussion about the pros and cons of working from home, and how to manage the post-pandemic return to office life. “I would imagine most businesses would have a little tick-box for consultation and might include a couple of stakeholders, and you’d get a tiny opportunity to give your feedback.” Being co-owners, Atkins says, influences how co-workers interact. And sharing directly in the profits is an extra motivation.

The rise of employee ownership suggests a widespread desire for a different sort of economy: one less concerned with short-term profit, more with empowering people and communities. So does the continuing strength of co-operatives — and the growth of community businesses, where locals people take control of an institution which matters to them. Bramley Baths in Leeds is a textbook example: a council-run Edwardian bathhouse and fitness centre which, though much loved, was consistently losing money. In 2013 it was threatened with closure — until a group called the Friends of Bramley Baths offered to run it instead. The council agreed, and today the bathhouse turns a profit, while employing 41 staff on the living wage.

Bramley Baths was helped by a grant from the charitable trust Power to Change. “What’s interesting,” says PTC’s chief executive Vidhya Alakeson, “is that community businesses manage to make business models work that the private sector and the public sector don’t”. They really understand what their community wants and needs and will therefore participate in or pay for. Community businesses benefit from strong customer loyalty, and often from volunteers working alongside paid employees. It’s a model that works in everything “from gin distilleries to ferry boats, to farms to shops to leisure centres”, says Alakeson. Shuttered pubs have become a familiar sight around Britain, but where communities have stepped in to save their local, they have often become successful enterprises.

As well as being uplifting in themselves, these stories hint that a different kind of politics might be possible. Even though it ended in failure, there was a truth at the heart of David Cameron’s Big Society: if given the right tools, people can transform their areas, without needing to be ordered around by the state. It’s easy to assume that community businesses are the preserve of affluent areas full of well-connected retirees and comfortably-off stay-at-home parents. But Alakeson points out that the model can work anywhere: “67% or so of our funding goes to the 30% most disadvantaged parts of the country.”

Community businesses — the sector has more than doubled since 2014, and there are now more than 11,000 — and the rise of models like Riverford’s employee ownership are all different ways of shifting power, says Alakeson, “away from an economy where very few people hold power… towards an economy where power is much more broadly held, and many more people have a stake.”

Perhaps a democratic economy sounds like a nice but rather dreamy idea; a new book, Sara Horowitz’s Mutualism, argues that nothing could be more politically urgent. The mutualist impulse, says Horowitz, is simple: “If neither government nor market forces are solving a problem that you and the people in your community share, why not solve it yourself?” The American social safety net was born, in the 20th century, not just of state intervention, but also of unions, mutual aid societies, religious communities and co-operatives. Today, as the state either can’t or won’t maintain that safety net, these organisations are more necessary than ever. Horowitz herself founded the Freelancers Union, which has successfully campaigned for laws protecting freelancers. Crucially, it also has a sustainable business model, since it provides services such as health insurance in return for its members’ dues.

In Britain, there are hints that the Government is sympathetic to a more democratic economy. Last year Boris Johnson commissioned a report from Danny Kruger MP, “Levelling Up Our Communities”, which brought together dozens of ideas for empowering individuals and local bodies. Rishi Sunak’s budget launched a “Community Ownership Fund” for rescuing local assets along the lines of Bramley Baths. Is that a sign of a changing political culture?

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Vidhya Alakeson is sceptical. “The potential of the social economy isn’t that well understood in government currently,” she says. The sector has a lot of momentum, but where the government is happy to offer incentives, tax breaks and subsidies to favoured industries, community businesses tend to be overlooked.

Britain’s political conversation seems hopelessly stuck in an argument about the size of the state: you’re either on the Left and want the government to intervene more and spend more; or you’re on the Right, and want it to do less. The possibility that politics is also about empowering people and local institutions is largely ignored.

Will Tanner, director of the think tank Onward — which can claim credit for the Community Ownership Fund policy — is slightly more upbeat. “Most of the relevant cabinet ministers — Rishi Sunak, Robert Jenrick, Oliver Dowden — they’re instinctively interested” in policies that support collective local action, he says. Onward is hoping that the government will take up other ideas — such as more support for community land trusts, and a “right to regenerate” which would make it easier for communities to take over empty retail spaces.

But, he adds, the language of common local endeavour struggles to resonate with politicians: “It doesn’t fit into an existing set of policies or an existing philosophical agenda.” So policies supporting community power tend to be “an afterthought. It’s often more about tweaking existing systems rather than decentralising and devolving power, which is anathema to the mindset of a technocratic state.” Tanner, who has worked for the Home Office and No 10, says it can be hard to jolt the state out of its bureaucratic, top-down habits.

“Ordinary people,” he observes, “have a lexicon of words to describe this: they might talk about the family, the group, about collective action. Often it’s old Anglo-Saxon words. But there’s a disconnect between the language of ordinary people and the language of politicians.” You have to start with the people, he says. “As soon as you start creating technocratic tools, you lose the magic.”

Before the 1979 general election, in a celebrated moment of fatalism, the Labour leader James Callaghan remarked to an aide that, “there are times, perhaps once every 30 years, when there is a sea change in politics… I suspect there is now such a sea change and it is for Mrs Thatcher.”

Those of us who aren’t Thatcherites have long hoped for a sea-change in the opposite direction, towards a less ruthlessly competitive Britain. Is it possible that the next transformation could bring about a more democratic society? If so, then it will begin at the grassroots, with the spontaneous growth of new models, new experiments in working together for a shared purpose. And the politicians might be the last people to notice it.