Giving employees a stake in firms would reshape power: this could be the start of a transatlantic challenge to neoliberalism
Mon 3 Jun 2019 by www.theguardian.com
Progressives are no longer content to just regulate capitalism – instead they’re going after capital, seeking to dramatically transform wealth itself. That is the lesson of Bernie Sanders’ most ambitious policy yet, announced last week: a plan to reshape ownership of business so that workers share in the wealth they create.
On both sides of the Atlantic, an alternative is now visible. In place of an extractive and unequal economy, the fight is on for one that is democratic and sustainable by design, rooted in new models of ownership.
Although the details of Sanders’ plans are still to be decided, the outlines are clear. The policy would require businesses to transfer a percentage of their shares annually to a fund controlled by employees. The fund would then pay a regular dividend to workers while giving them a powerful voting bloc in corporate governance. Growing over time, the funds would be a new way of socialising the economy from the inside out.
Reshaping ownership would give people a stake and a say, helping democratise their workplace. Analysis for Common Wealth, a left-leaning thinktank – which I am director of – focused on designing ownership models for the democratic economy, showed that with a 10% stake in the largest US corporations, the average dividend payment per employee would be $2,725 (£2,160) per year. Of course, there are sharp differences in profitability between different companies and sectors. Getting the design of how the dividend is distributed will be crucial to ensuring the policy does not worsen inequality. And that also means ensuring that society as a whole – not just workers – gets a share of collectively produced profits. But done well, it can transform private, corporate wealth into common wealth.
The greatest benefit, though, is not greater income, but more collective power. Few of us, whether in the US, the UK or elsewhere, own shares directly. While household savers might be indirect shareholders, voting rights are controlled on their behalf by large financial institutions who often fail to act in the interests of the saver – and extract vast rewards for themselves in the process. In other words, most of us lack meaningful control over where we work, and existing structures of ownership fail to deliver it.
The Sanders plan would transform that, giving people the power to collectively and directly shape their company. Instead of private capital monopolising corporate decision-making, workers would now have a voice. By rewiring ownership, we can reshape power.
The plan is the latest example of the growing cross-fertilisation of ideas and energy across the Atlantic. Alexandria Ocasio-Cortez’s proposal for a Green New Deal has helped catalyse a thrilling wave of climate activism in the UKand beyond: the challenge now is to translate it into an agenda that can match the scale of crisis confronting us. Social movements are learning and sharing strategies and tactics for mobilising power.
Sanders’ worker ownership policy, meanwhile, appears to have been inspired by Labour’s inclusive ownership fund policy, which was announced last year. This would give workers a genuine stake and a say in their companies, fundamentally altering how they operate and for whom. Late to the party, and with much to learn from similar movements across the world, the transatlantic left is fast joining efforts to move beyond a broken economic status quo.
The return of ownership to the heart of progressive politics has come not a moment too soon. Ownership matters. How our economy is owned and by whom powerfully shapes how it operates and in whose interest.
We have twice before transformed our society – both times deep shifts in our relationship to property drove the change. The extension of public ownership in the 1940s underpinned the postwar consensus. Privatisation – from land to housing to utilities – was in turn fundamental to the neoliberal counter-assault from the late 1970s onwards, reshaping how assets were controlled and binding in new constituencies to an emerging settlement.
Today, as we confront the climate crisis and stark inequalities, we need another transformation on the speed and scale of those past moments, albeit in a different direction: toward the deepening of democracy in everyday life. A new and pluralistic architecture of ownership must be fundamental to that transition. Sanders’ plan is an important step towards that alternative.
• Mathew Lawrence is director of the Common Wealth thinktank