Democratizing the Economy through Community Wealth Building: Recent Lessons from the UK and Poland

In a recent post in this series, Hannes Kuch presented the case for economic democracy. Just as we balk at the thought of being denied a democratic say when it comes to our political systems, so should we protest when we’re expected to allow ourselves to be subjected to the private decisions of an unelected elite in the economic sphere. As philosophical interest in the theoretical arguments for extending basic democratic principles to the economy grows, attention is also turning to the practical question of how that extension might be realized.

The most widely discussed approach to democratizing the economy in contemporary political philosophy is workplace democracy—increasing worker control over decision-making within the firm. This follows naturally from the most popular contemporary argument in the direction of economic democracy: the firm-state analogy. If the firm is relevantly like the state, then just as democracy requires us to ensure that the people have sufficient control over the state’s decisions, so does it require us to ensure that the employees of the firm have sufficient control over the firm’s decisions.

Workplace democracy, however, is but one of a broad range of means of increasing democratic participation and oversight in economic decisions. As all contributors to the debate recognize, the task of democratizing the economy will be an uphill battle, requiring us to square up to entrenched, powerful interests. Expanding the range of tools in the economic democrat’s toolbox will be an important part of that struggle.

Community Wealth Building

One important member of that expanded toolbox is community wealth building. Community wealth building is an approach to economic democracy that focuses on local communities, rather than the employees of particular firms, as the demos to whom economic decision-making is to be made responsive. The term covers a variety of strategies towards achieving this end, including workplace democracy: worker cooperatives, community land trusts, community banking, and the use of “anchor institution” procurement to produce stable, long-term economic opportunities for local residents. Perhaps most importantly, these various strategies are linked together by a dedicated infrastructure for cooperative planning, in which local economic actors (such as local businesses and trade unions) have an opportunity to help shape those economic decisions that will have significant consequences for their communities.

Anchor institutions are large, often public or semi-public employers that are unlikely to close or relocate and so are “anchored” in place—like hospitals and universities. By facilitating cooperation between anchor institutions, local businesses, trade unions, civil society organizations, and local government, the community wealth-building model encourages anchor institutions to localize procurement, creating stable and lasting economic opportunities for local providers, and establishing relationships in which those providers can exercise voice with respect to the details of procurement decisions.

In the earliest explicit city-wide experiment with community wealth building—Cleveland, Ohio in the 2000s—the American think tank The Democracy Collaborative worked with major anchor institutions (such as the Cleveland Clinic and Case Western Reserve University) to establish procurement relationships with the Evergreen Cooperatives, a network of local, green worker cooperatives, providing various services, such as laundry, food and catering, and green energy. (The Cleveland Model was later taken up and expanded upon by the city council in Preston, Lancashire, where the success of the approach has led to the Preston Model emerging as another paradigm example of the successful application of community wealth building in policy-making circles.)

Perhaps most importantly, against a backdrop of democratic decline at the national level, community wealth building offers a bottom-up route to significant democratic victories at a local level—affording communities an important degree of tangible self-government and an experience of democratic participation at a time when such things are increasingly hard to come by through the avenues of traditional democratic institutions.

Grangemouth, Scotland: A Case Study of Democratic Failure

At the end of April this year, Petroineos (a joint venture between the British multinational Ineos and PetroChina) confirmed the closure of the one hundred-year-old oil refinery in Grangemouth, a town on the banks of the Firth of Forth, in the central belt of Scotland. The closure saw the loss of four hundred jobs in direct terms, but as the refinery was a major player in the local economy, the closure has had significant ripple effects throughout the town. (A Scottish Enterprise report estimated that 2,822 jobs depended on Grangemouth’s oil refining.)

The decision did not come out of nowhere—the company had announced plans to close the refinery in 2023, and the issue became an important part of the Labour Party’s rhetoric about industrial reform in the run-up to the 2024 election. Senior Labour figures, including Kier Starmer, committed to taking swift and effective action to prevent job losses. The parliamentary constituency of Alloa and Grangemouth duly returned a Labour representative, Brian Leishman.

In July of this year, however, Leishman was suspended from the Labour Party, after demanding that the government fulfill its promise to his constituents. Money has been set aside at the national level, and a Scottish government study—Project Willow—has outlined a series of potential ways to recreate jobs in the area. But, so far, no credible, concrete plan has emerged. Meanwhile, the patience of local residents, many of whom have been jobless since the closure of the refinery in April, is being tested to the limit.

Konin, Poland: The Democratic Potential of Community Wealth Building

It is too early to say with confidence what the full effects of the refinery closure will be for Grangemouth. But the present signs point towards a powerful illustration of the underlying principles behind community wealth building. When major economic decisions that will determine the prospects of a community’s future are left to private actors, local residents are left vulnerable to the whims of distant bosses. When large employers disinvest, the ripple effects for local economies can be catastrophic. And in today’s world, the prospects of negotiating greater control over such decisions through traditional avenues for democratic representation at the national level are increasingly slender.

The lessons of Grangemouth, moreover, echo all the louder when contrasted with a recent example of what the energy transition can look like when the process is informed by community wealth building ideas. The city of Konin, in central Poland, has been the center of major lignite mining operations since World War II, and both the mines and coal-fired power plants have been major employers for decades. But with changing global economic conditions, alongside governmental and EU drives towards decarbonization, the region’s economy is changing in profound ways. Two of the three biggest mines in the area, and one of the three power plants, have already closed, with those mines and plants still open set to close in the coming years.

In these respects, Konin and Grangemouth’s stories sound similar—two once-booming fossil fuel towns facing serious crises of deindustrialization and disinvestment as a result of shifting market forces and broad movements towards decarbonization. But while the problems they face may resemble one another, the responses to those problems have differed considerably.

In 2021, a partnership of employers, trade unions, NGOs, and the city council announced the Jobs After Coal project, a community-wealth-building-inspired plan that attempts to help build lasting local economic opportunities to replace the jobs that Konin is forecast to lose in coming years. The project offers two major routes for reentering the workforce for laid-off workers: a re-skilling and job-finding scheme (including subsidies for local businesses to hire and retrain former fossil fuel workers) and subsidies to help workers establish their own businesses, with the aid of the Polish Association of Social Cooperatives. (The project also includes early retirement plans for former fossil fuel workers, plans to mitigate the depletion of groundwater levels by converting former opencast mines into reservoirs, and provisions to help protect the cultural heritage of the region, which has been deeply shaped by the mining industry over the last century.)

As with the situation in Grangemouth, it’s too early to say with any confidence whether Konin’s approach to the energy transition will succeed. And it is also worth emphasizing that there have already been some significant bumps in the road (an early attempt to encourage collaboration between employers and unions, named the “Smooth Transition” project, was, by all accounts, a complete failure).

Nevertheless, at a conference on the project in Konin last summer, the mood was cautiously optimistic. Worries were raised, vigilance was called for, and (as one would expect) there were marked differences of tone and emphasis among the various contributors, which included local business owners, trade unionists, NGO representatives, and city, national, and EU government officials. But—to this external observer at least—the conference seemed to conclude with a quietly positive air, a sense of a democratic spirit of discussion and debate, and a realistic prospect that the town might yet change the well-worn record of deindustrialization, disinvestment, and disempowerment.

The contrast between this and Grangemouth’s recent experience thus seems stark. On the banks of the Forth, multinational corporations call the shots, and the community’s attempt to retain some control over the shape of the local economy moving forwards yields little results through traditional national democratic institutions. In central Poland, meanwhile, a new approach to empowering local communities from the bottom up is creating cautious optimism that the energy transition can be an opportunity for deepening democracy, rather than hindering it.