Clegg, Shares, and Privatising Consent

January 16, 2012

Today’s announcement by Nick Clegg of measures to facilitate more employee share ownership has been leapt on by Labour media darling Chuka Umunna as an endorsement of Ed Milliband’s ‘Responsible capitalism’ idea. Leaving aside the somewhat audacious claim that Ed Milliband came up with the John Lewis model of business, Umunna’s response demonstrates that Labour have failed to understand the intellectual direction of this Government – and the implications of that for the Labour Party.

I have previously written about how the parties of the Coalition are expressly aiming to use Government to overhaul the way in which the public perceives the private sector, by putting the burden of demonstrating the ethical worth of private enterprise squarely on its shoulders. A drive for greater employee ownership must be seen in this context – co-operatives and mutuals have always been perceived as more ethically sound than models of ownership which concentrate more shares in fewer hands. It puts the cost of an ethical stance on the company, rather than enforcing ethics through legislation. In doing so, it reduces the scope for dissatisfaction with capitalism, limiting the political space open to the likes of the Occupy protestors. It overcomes a very specific challenge: if wages represent a falling share of GDP compared to returns on capital, then the way to overcome this is not simply through higher wages, but the redistribution of capital itself. The share of GDP accorded to wages becomes an insignificant issue.

British liberalism has always recognised that the condition for a free society is the consent of all its members. By moving towards a model which places the burden of securing that consent upon business, Clegg is diminishing the space available for a Labour Party that would seek to secure that consent via the State. Labour’s complicity in this may yet be their undoing.

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