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Why socialization can be a compass for renewing the Left in Germany

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Supporters of “Deutsche Wohnen und Co. enteignen” rally in Berlin. Photo: picture alliance/dpa/dpa-Zentralbild | Monika Skolimowska

The start of the Deutsche Wohnen & Co. Expropriation referendum was a bombshell: over 50 percent of the population of Berlin indicated that they supported the initiative's objective. A year earlier, openly contemplating the expropriation of a large, publicly listed corporation would have been impossible to imagine — certainly not from a pragmatic perspective. Expropriation was only for building roads, airports, and railway lines — or wiping out entire villages for brown coal mining.

This article first appeared in LuXemburg. Translated by Joseph Keady and Michael Dorrity for Gegensatz Translation Collective.

This configuration changed dramatically when the referendum passed, shifting the parameters of what was politically expressible. However, that discursive success had a concrete material basis: nowhere are the consequences of precarization, privatization, and financialization as directly perceptible for such a broad swath of the population as they are in housing. In urban centres, it has become almost impossible for even the most entrenched of the middle class to find an affordable place to live. Low-wage earners have been pushed out of the city centres for years and many no longer have a residence at all.

The Deutsche Wohnen campaign made it possible to concisely and comprehensibly establish the connection between continuously increasing rents on the one hand and returns on investment for shareholders on the other. For many people, it became apparent just how absurd and life-threatening it is to abandon basic public interest goods to those who operate them in order to ensure yields on annuity funds. Faced with the fear of being unable to pay rent, the spectre of expropriation apparently seems less frightening. Over the course of the campaign, there was even a cautious sense that an increase in social regulation was on the cards. The charms of this perspective, as such, went beyond the issue of housing.

The dramatic consequences of years of neoliberal cutbacks and privatization can be seen in many areas of life. The outcome of denationalization policies over decades is visible not only in the frequently lamented dilapidated infrastructure, but also in civil service staffing: between 1991 and 2018, the number of employees declined from 6.7 million to 4.8 million. A study by the Rosa Luxemburg Foundation shows that the employment gap in public service and welfare is in the millions. In the five Nordic-Scandinavian countries, the number of people working in the public sector or for public employers per 1,000 residents is currently twice as high as in Germany.

Giving Something to Everyone

At the same time, the crisis in public services is often experienced as a “silent crisis”, because even though people can feel it directly in their everyday lives, there is hardly any political space for the resulting anguish and overexertion. Someone who is overwhelmed by caregiving, who can no longer afford an upcoming rent increase, or who cannot find a day-care slot may cry out loud about it, but they still have to find a way to keep going from day to day. The widespread sense of powerlessness in this multi-layered crisis also crept into the political system long ago. In this situation, the Berlin referendum opened up a debate about questions that had been buried for decades.

Socialization cannot be reduced to the legal act of forcing a change of ownership. Above all, it is a matter of bringing important social areas under democratic control. Taking our everyday ideas into consideration and shaking off the things we have learned to think of as “obvious” in times of neoliberal hegemony are thus also worthwhile. The property form in everyday thinking and its material effectiveness have been relatively stable thus far. In contrast, it cannot be emphasized enough that socialization does not primarily mean taking something away from someone, but rather giving something to many. It opens up a common class-political horizon for struggles in completely different fields and allows us to mutually benefit from acquired experiences. It also has a chance of being a compass for the renewal of the left.

At the same time, it raises new, exciting questions and challenges that are worth shedding more light on.

Really Nationalizing Everything?

For the property-owning class and its representatives, forced change of ownership — from private to public — is the height of provocation. Accordingly, this question is often the crucial point of public debate. However, from a left perspective, it is apparent that the distinction between private and public ownership, while important, is not unto itself a sufficient criterion.

Private actors currently make quite meaningful contributions to our daily routines — be they housing associations, the foundations behind Wikipedia and the open-source messenger app Signal, or the numerous non-profit financial backers in the social sphere. At the same time, there are public companies, such as Deutsche Bahn, that are 100-percent state-owned, yet whose actual business methods are hardly distinguishable from current “market practice”.

In the case of Deutsche Bahn, as a publicly traded company, the organization brings with it a management structure that sees maximizing corporate profit at the expense of employees and commuters as an important task. But public hospitals will come up against the limits of what is possible, as long as they have to operate within the framework of a highly economized health care system. As to the question of how the conversion of energy production can proceed in a sustainable and environmentally friendly way, de-privatization is not the only criterion. Here it is worth distinguishing between profit-oriented and common good-oriented actors in order to take not only ownership, but also actual business practice into account.

Socialism Comes from Socialization

Ultimately, there is a difference between nationalization and socialization. The demise of “actually existing socialism” shows that this is not a semantic quibble. While abolishing private ownership of the means of production is a necessary precondition for ecological and socialist reorganization of production and labour, nationalization alone does not guarantee this necessary reorganization.

We can only speak of socialization in the proper sense of the term when, on the one hand, the separation of producers from the means of production — and with it the class divide — has been overcome; and, on the other hand, when producers as well as consumers are democratically planning and producing according to their needs and the requirements of ecological sustainability.

Socialization therefore aims for comprehensive access for the many to the conditions of satisfying their own needs. That includes not only the matter of the property form, but also the democratic reorganization of production and reproduction. Such a planned economy would have to be built from the bottom up in council structures — this much is certain — so that society would not fragment into two parts, whereby one plans and decides for the other.

What the collective management of future common properties might look like in concrete terms is a question that the social left has seldom discussed to date. However, some lessons can be learned from historical debates and scattered experiences with workplace and political self-management. For many questions that are already arising today, solutions will have to be found by doing.

Public, Because It Won’t Work Otherwise

Nonetheless, on an interim basis, an orientation toward public property in conjunction with expanded participation — a kind of "nationalization plus" — is an important perspective, given the numerous problems that arise when the market and its inherent dynamics fail to keep things in check. With an eye toward the looming climate crisis and provisioning everyone with basic goods for everyday life, important segments of our economy will need to be shifted to the public sector, given that the market fails miserably in these matters.

For instance, after the end of the state monopoly on telecommunications, we are faced with the paradoxical situation that countless private telecom networks exist simultaneously, yet network access is lacking or is not up to the level of technological capability in many rural areas and private households. Social labour and resources that are lacking elsewhere are squandered in that field. That is not just ineffective, but also promises social and ecological disaster in many fields. In order to ensure “profitable” network expansion in rural areas, the state has to financially intervene once again because private companies are not making the necessary investments. Loss makers are foisted off on society.

History seems to be repeating itself in this instance. In the early days of railroad construction, for example, private companies also competed against one another and would sometimes build several parallel tracks in the same region. At some point, it became apparent that efficient network operation could not be assured that way and state-run railroads evolved in many places. In Italy, nationalizing electricity production in the 1960s was the only way to create the conditions for a sufficient, nationally consistent electricity supply. Before that, electricity was more expensive in the already disadvantaged south than in the north and access was not equally assured everywhere. The list of similar examples goes on, even though their lessons have long been forgotten in the face of the well-established rants about poor public services and management in the neoliberal era.

Where to Begin?

Therefore, we are on the record: in light of the growing need to hinge social production on the limits of natural resources, that production should be meaningfully in line with actual conditions and not with the generation of profit. This raises a question for further debate, namely which areas should be prioritized for reclaimed democratic control.

The legal concept of suitability for socialization refers to the relationship between market power and the common good. It seeks to explain why certain companies or sectors should be withdrawn from the logic of the market and profit rather than others. With respect to the political question of which economic areas should be socialized, there has been and still is consistent and intensive debate in the history of the labour movement, which has reflected the prevailing battles of the time as well as the prevailing formations of capitalism.

From a socialist perspective, in the early twentieth century, it was worth socializing the central social production sectors — so-called “key industries” — in order to extend social control over the economic system in general. That meant the early coal, iron, and steel industries as well as shipbuilding.

To find a viable answer for today, three areas seem to be of the greatest importance. The first and an obvious one for many is the field of public services. The logic of markets and profits quite obviously hinders the objective of finding the best possible satisfaction of needs in housing, health care, education, and mobility. The widespread admiration of the Scandinavian model shows that there can also be points of contact with social democracy and segments of the bourgeoisie on this issue.

Additionally, there is a structural benefit for corresponding socialization struggles with reference to the technical composition and mobility or immobility of the capital applied there. These are strategic advantages of public services: “Areas such as housing, caregiving, or health care cannot be globalized away. This is not a matter of a product that we can also buy somewhere else. It is about the production of life itself. And that happens locally: at home, in the daycare centre, and in the hospital”.

Companies in the field of social reproduction are largely dependent upon human labour that cannot simply be shifted to or replaced by machines. The conditions for possible socialization are also favourable, insofar as it is not only the staff who can hope for better working conditions, but all of us who can look forward to better options day-to-day. Thus, the suggestion of initially focussing on public services also means looking at the concrete conditions for action of those who want corresponding socialization against the will of the affected segments of capital.

But we cannot leave it at that. Those sectors that require rapid transformation in order for urgently needed climate goals to still be achievable must be regarded as the second “key industries” of the twenty-first century. When a policy of state incentives together with market forces is too slow or hardly contributes to a solution because it cannot override the criterion of profit, then the future of our planet cannot be put at risk. Public responsibility is then needed.

With that in mind, all industries that materially contribute to carbon emissions must be scrutinized and an appropriate conversion initiated. In some circumstances, it might make more sense to establish new public sector corporations to build, for example, rail cars and electric buses rather than trying to expropriate airlines or powerful automotive groups in hopeless struggles to convert their operations at great cost. And where rapid conversion to climate-neutral production can only be carried out when the state intervenes with significant financial incentives — as is currently taking place in the steel industry — it should obtain titles of ownership for its aid as a kind of transitional demand.

That way, state capital assistance during transformation could be used as leverage to ensure incremental public participation in the private sector and build pressure toward modified business models and business practices right up to alternative production. Furthermore, that kind of participation could accompany expanded co-management by employees, unions, environmental associations, and the populace. Here as well, initial steps toward fully democratic production and planning would be practicable even today.

Third and finally, putting digital infrastructure — which is to say the web, data, and the algorithms that process them — under public control is urgently needed. The Left pays surprisingly little attention to this field. We live in a time when not only do private algorithms structure the world's knowledge, but data giants also use personal profiles on social media to control our purchasing behaviour and our attention. Moreover, the “Big Five” already have sovereign authority over all relevant information that is fundamental even for state and social decision-making processes. In light of the sheer quantity of data, the only way they can currently be collected and used at all is by means of proprietary software.

Given this background, there is an urgent need to develop public alternatives in this field as well. Transparent procedures and democratic decisions are vital to this end: who wants to live in a state that controls what our internet searches say about us and that knows our purchasing, reading, watching, and clicking habits? We need democratic control over what data we collect about our own lives, how algorithms function, and who has access to these data and for what purpose. In the future, corresponding infrastructures — from waste disposal to the energy supply to mobility management — will be increasingly important. They will also play an essential role with respect to the modern digital possibility of enabling social planning that is oriented toward existing need.

That will require more than just a little bit of regulation with an eye on data protection: anyone who wants to reasonably plan beyond private interests will need the appropriate fundamental information and will not be able to rely on the good will of the tech corporations.

From R for Re-establishment to S for Socialization

Ad hoc socialization of all important fields cannot happen overnight. It is therefore all the more important to consider where different steps — small steps included — can be taken in the right direction. As previously indicated, this might range from building alternative structures or re-establishing companies to expanding democratic rights through public participation in the private sector, to buying (municipalization) or, in many cases, buying back (re-municipalization) companies (or parts thereof) or even socialization under Article 15 of Germany’s Basic Law. In the Bundestag, Die Linke has repeatedly proposed that Germany's federal government create a kind of consultancy agency for municipalities and improve the legal framework for such steps in cooperation with the German states.

In the meantime, as normal “public administration with a functioning calculator”, re-establishment and (re)municipalization are a low-key part of political activity in the field of public service: between 2005–2016, for example, 152 municipal, community, or regional electricity or gas distribution utilities were re-established in many places. They also play a part in other fields, such as industrial cleaning.[1] They are present wherever the objective is to offer citizens important public services of a desired quality, in the desired scope, and without a superfluous profit-orientated markup.

(Parts of) companies will have to be bought or bought back whenever the necessary expertise, required titles of ownership, or concessions cannot be acquired through re-establishment. That is how numerous municipalities have set out to bring their housing stock (from Coburg to Berlin) or the local hospital (from Parchim to Peine to Marburg-Giessen) (back) under public ownership in recent years.

In practice, the fact that the price needs to be agreed with the previous owner often proves to be a crucial sticking point. In case of doubt, the owners have the upper hand and municipalities are faced with a dilemma: the purchase price, which factors in possible future profits, can only be refinanced with correspondingly high usage prices. However, that is precisely what should be ruled out. This is where socialization under Article 15 of the Basic Law applies. This constitutional article is the democratic tool for breaking the “protective ring” around private property by democratic means — without needing to meet private actors' speculative profit expectations in the process . That is why understanding the impetus for the socialization of Deutsche Wohnen & Co. Expropriation under Article 15 of the Basic Law as part of the political toolbox has opened up a new horizon. Its possibilities and limits are being reassessed in the current debate.

The necessary financial resources have to be allocated for all the options named here. This can be done via transformation funds, once established. Previously existing structural aid — for instance for transforming former coal regions or funds for climate change adaptation — should be extended in this direction so that the necessary transformations are not thereby ultimately paid for by public funds while the profits that they enable are then reabsorbed by private interests, such as what happened with state investments in Biontech for Corona vaccines, for example. Their patents would have to be rescinded, as urged by the WHO (TRIPS waiver), among others.

Next Steps

Regardless of the path taken to socialize enterprises, if we are serious about the project of socialization and aspire to pragmatically implement it, foreseeable problems and challenges will arise beyond the question of how to carry out these struggles by means of everyday politics. Democratic management, direction, and monitoring is an enormous challenge and it starts with considering who should be included at which points in a process of social negotiation and planning. The question of how to manage and occupy the housing stock that is to be socialized in Berlin is anything but trivial — it requires new democratic practices and completely different social responsibility for social housing policy.

However, considering Article 15 of the Basic Law, socialization struggles must be initiated from below and thoughtfully organized. In that regard, there is a lesson to be learned from the signal conflict in Berlin. As a socialist party, obviously Die Linke can and should also play an important role in these struggles.

A spectre of socialization is haunting this Republic. While it remains an open question how things will proceed with the expropriation committee that was agreed upon in the coalition agreement, the next initiatives to expropriate privately owned housing stock will begin this year with the “Expropriate Hamburg” petition.

The Deutsche Wohnen & Co. Expropriation initiative organized a nationwide action conference and in the fall of 2022 there will also be a conference co-organized with the Rosa Luxemburg Foundation titled “Socialization: Strategies for a Democratic Economy”. In the sense of a public enterprise or infrastructure socialism, socialization can and should serve as a unifying perspective that brings an invigorating added value to debates on hospital and health care corporations, securing private information and digital infrastructures, mobility and energy transformation, provision of housing, or even with a view toward a new land policy.

A broad-ranging socialization initiative could bring many large and small struggles together in striving for a public, democratized economy for the common good that would work for everyone as well as for our planet.

References

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[1] In Dusseldorf, 50 percent of cleaning services are now performed by municipal owner-operated enterprises. This is also on the agenda in Berlin with schools in mind.