The social-democratic worthy Will Hutton, in his heyday the chief advocate that Britain can come good by adopting “Rhenish capitalism” on the German model, is happy about Labour Shadow Chancellor John McDonnell's plan for a bit of worker shareownership, as announced at (but not put for debate to) Labour Party conference.
Hutton's praise is sincere, but double-edged if read by socialists.
“Today John McDonnell has crossed a line: by wanting workers as shareholders and represented on boards, he signals that capitalism can be made to work for the common good. His comrades from the 1970s would turn in their graves...
“His proposed inclusive ownership funds demand that every [publicly listed] company with more than 250 people progressively allocate 10% of its shares to be held on the employees’ behalf... if you recast it as a compulsory employee stock ownership plan... is trying to achieve what George Osborne's 2013 Enterprise Act attempted but failed miserably to do”.
Hutton approves. But a lot of us “comrades from the 1970s” are not yet in our graves, and a lot of new young activists agree with us in fighting for workers' and democratic control, not a 10% “worker” nudge for capitalism.
The worker reps on boards will be a minority, probably tied by boardroom confidentiality, and much more likely to be made a channel for telling workers they must help the bosses succeed than to become a voice for workers' rights.
The £500 per year which workers are due to get can be evaded by companies in several ways. For most workers in big companies, it is not a lot anyway.
Hypothetically, the scheme would give much more to the government - effectively by a tax on dividends - than to workers, but (if the scheme is legislated) that will probably just mean big firms using share buybacks instead of dividends, routing profits into companies within their empires which have fewer than 250 employees, or taking the shares private, off the public stock exchange.
McDonnell's scheme is loosely based on ideas from the 1970s Swedish Social Democrats (the “Meidner Plan”) and the early 1920s German Social Democrats (“Sachwerterfassung”).
Both in Sweden and Germany, the Social Democrats never carried through their plans. But the plans were intended to establish majority worker ownership and control of all big industry over time (Sweden) or at least to expropriate a large chunk of big-business assets to pay for social spending (Germany).
Sadly, McDonnell has watered down the idea so much that it has lost all that was radical in the Swedish and German plans.