Back in 1985, Margaret Thatcher hailed a new era:
“… popular capitalism means what it says: power through ownership to the man and woman in the street, given confidently with an open hand.”
At the core of this popular capitalism would be an ownership revolution, a ‘property owning democracy’, in which individual shareholding would be widespread.
Did this revolution happen?
It appears not. In the 30 years since that speech, the number of individual shareholders on the London Stock Exchange halved to 11% in 2015. So, who does own British companies? Over half of listed shares are now foreign owned at 53%, compared to just 13% in 1985.
So, how does it feel to work in such an economy? Polling by Respublica shows that 58% believe they have no influence in the workplace (this rises to 70% for part-time workers), 59% feel they have no influence over big business, and 58% feel they have no influence over the economy as a whole. Understand these figures, and it becomes easier to understand the allure of the slogan ‘take back control’.
The good news is that other models of business ownership exist and they are thriving in Britain and around the world. In contrast to Margaret Thatcher’s vision of an individual ownership revolution, these are models based on collective and democratic ownership.
There are 7,000 independent co-operative businesses in the UK today, democratically owned by their workers or employees. These range from the iconic convenience stores to industrial and creative industries and credit unions, as well as a new generation of community-owned pubs, shops, and football clubs. Critically, more than 17 million people collectively own them.
Employee-owned businesses are experiencing particular growth. Each year, the number of employee-owned businesses increases by 10%.
Why does this matter? What is different about co-operatives and employee-owned businesses?
As businesses owned by the people who use and work in them, co-operatives operate in a collective, rather than private interest. Profits that would otherwise be retained in private hands are widely distributed among those members, benefitting the community at large.
There is also a sound business case for these forms of ownership. In particular, evidence suggests that employee-owned businesses are more innovative, productive, and resilient than other models.
Unlike PLC businesses, the short-term demands of shareholders do not drive co-operatives, which are therefore able to focus on long-term success. With collective benefit at the core of their purpose, they are well-positioned to lead on issues of public concern like Fairtrade and Fair Tax, for instance many of the founders of the Fair Tax Mark are co-operatives.
As bogus self-employment increases, the calls for a crackdown will only grow louder. Legal cases by trade unions and others have shone a light on this and are very important. The co-operative model has much to offer in this arena too, with the potential to build solidarity in place of insecurity in our labour market.
For solutions, we can look to some examples from within the UK and elsewhere. Not Alone, a report produced by Co-operatives UK, Unity Trust Bank and the Wales Co-operative Centre, has identified 3 main categories;
- Co-operative service providers – co-operatives providing services to self-employed workers who may otherwise have to rely on expensive, profit-making agencies. This includes music teachers, supply teachers and taxi drivers.
- Shared work spaces – businesses like Indycube are providing work spaces, and other services, for freelancers reducing isolation and enabling collaboration.
- Mutual aid and insurance – ‘Bread funds’ in the Netherlands enable freelancers to pool the risk of periods of unemployment by creating funds into which freelancers can pay when they are working and then draw upon if they are not able to work.
The co-operative sector in Britain is growing and developing, but experience from other countries shows that there is significant potential for further growth.
The Labour Party has committed that the next Labour government will look to double the size of the co-operative economy which would have a transformational impact and be an important step on the road to building an economy in Britain which works in the interests of the many and not the few.
The Co-operative Party is working with Labour to develop detailed proposals to make this happen.
Based on a presentation to the Labour Party New Economics Conference, Newcastle, 18th March 2017.