Nick Clegg: 'Give shares to workers'

Clegg: Give shares to workers

Workers could be given the right to request shares in companies they work for under proposals put forward by Nick Clegg, to create what he describes as a "John Lewis" economy.
In a bid to deploy century-old liberal principles to the debate about crony capitalism, the deputy prime minister argued on Monday that the economy was in danger of being "monopolised by a minority" and that wider share of ownership among employees could be an answer. Clegg said "liberals believe strongly in the virtues of the market, but only if it is a market for the many, not a market for the few".
He described employee share ownership as "a touchstone of liberal economic thought for a century and a half and a hugely under-used tool in unlocking growth".
The employment relations minister, Ed Davey, has been asked to work on proposals for the coalition, and the chief secretary for the treasury, Danny Alexander, is to review possible tax incentives. Restoring tax breaks to employee benefit trusts is to be examined; it was proposed in a report prepared by the Employee Ownership Association to coincide with Clegg's speech.
Clegg also announced an independent reviewer to develop legal models for firms to ease extension share ownership. The plan allowing workers to request shares could extend beyond publicly listed firms to private firms. In the case of John Lewis Partnership, the shares are not traded but held permanently in a trust on behalf of all employees. Clegg argued that companies in which staff had stakes had higher productivity, greater innovation and more patient investors.

I'm afraid I couldn't find the article on the Guardian's website, but it was in the latest issue of their weekly paper I received. Thoughts?

I have read about this in The Economist, and the expected bourgeois skepticism was offered. Worker ownership, they asserted, does not guarantee success, and it engenders certain liabilities in terms of economic growth. In other words, a typical reactionary response in defense of its class interests. I have also perused a recent article in Harvard Business Review, titled "First, Let's Fire All the Managers," which focused upon a private business, The Morning Star Company, operated by its employees—it is not a cooperative. The magazine praised the company's management (or lack thereof) arrangement but also cautioned against its sluggish rate of expansion (due to the difficulties of exporting decentralized management within a capitalist economy). I found this latter article in HBR to be quite fascinating, actually, in that this happens to be a highly regarded economic publication lauding a seemingly socialist principle: self-management.

Of course, the two proposals outlined above are not socialist; in fact, they are perfectly capitalist. They do not strike at the system (far from it), nor is that the intention. The intent is merely to restructure capitalism in order to safeguard its perpetuation (by "humanizing" it during these uncertain economic times). This leads me to my true point: it is impossible to organize capitalism so as to favor the working class. There is very little possibility of such plans to ever witness the light of day, as they directly conflict with the interests of capital. Employee ownership (even to the modest extent of John Lewis) and management undermine the productive relationship of capitalism and therefore will never gain preponderance in the economy via reform.