Economic democracy: one shareholder, one vote?

I’ve recently finished reading Wilf Wilde’s book Crossing the River of Fire: Mark’s Gospel and Global Capitalism, a book which – as the subtitle suggests – combines Christian theology with socialist politics/economics.

For a very brief summary of the theological perspective, see this post on my Tumblr. What I wanted to look at in this post is Wilde’s one practical proposal (in this book, at least) for reforming capitalism in Britain: changing the voting structures of existing capitalist corporations to a “one person, one vote” system, similar to that for parliamentary elections. (Though the more precise description that Wilde uses is “one beneficial owner, one vote”.)

As Wilde writes:

The proposal on capital may not sound much of a reform but it is designed to attack and subvert the legitimacy of capital and capitalist thinking. To fully implement it would destroy the concepts lying behind capital’s power over us.

He argues that, until the 1880s, the concept of using one person, one vote to elect MPs “appeared silly”:

Surely those with more property – with a greater stake in society – should have more say. …

Most of the working class and all women were still disenfranchised in Britain until 1918. So, what appears an obvious principle to us now was revolutionary until 1918…

By contrast, capitalist corporations are still run on principles pre-dating the 1832 Reform Act: the more you own, the more of a say you have.

Under Wilde’s proposals, investors in companies would still be able to buy greater or smaller stakes in companies, and thus enjoy greater or smaller gains or losses in their investments. What they would not be able to buy is greater power over those companies: any individual could buy a single share in that company and get the same voting power in it.

The only reasons for buying more than one share would be financial: to get a greater return. So pension funds (who invest primarily for a financial return rather than for control) would be affected less than someone like Rupert Murdoch.

In effect, this would turn every corporation into a mutual. We would still have a market economy (which has a number of beneficial features), but control of the surplus accumulation within that economy would no longer be concentrated in the hands of a few large corporations – or, for that matter, of “a board with a lord”, as happened under nationalisation. Rather:

the mutual corporation would … re-create a new social and democratic control form within civil society.

It’s hard to see how this could be implemented – as Wilde admits, it would go beyond “the limits of existing politics” – but the real question I’d like to pose to those reading this post is how workable it would be. What do you see as the potential pitfalls and problems with this as a concept?

A couple of thoughts I’ve had. First, there would clearly need to be similar safeguards for shareholder voting as apply to voting in parliamentary and local elections – to avoid institutional shareholders simply hoovering up individual’s votes as a block.

Second, Wilde’s proposal seems focused on the largest corporations (FTSE 100 level) where shares are more likely to be owned as an investment than as a means of direct control. But in smaller companies, the control afforded by different sizes of shareholding is often at least as important as the financial value of those shares. Smaller companies could find it hard to secure investment if investors were no longer assured of using their voting power as shareholders to protect their investment.

That said, however, this is still an intriguing proposal for economic democracy – and perhaps Wilde is right in saying that it only seems alien and dangerous to us in the same way (and for the same reasons) that political democracy seemed alien and dangerous in the days of male-landowner suffrage.

So, what do other people think of this?

Monbiot vs Marx

George Monbiot’s last two Guardian columns have been on a similar theme, as summarised in today’s piece:

[T]he government is not managing the economy for the people of this nation. It is managing it for a tiny transnational elite, a kind of global gated community. … The politicians who get to the top in these circumstances don’t just present no threat to the gated community; they actively do its bidding.

Or as he put it last week, concerning changes in corporation taxes to benefit transnational corporations:

I’ve realised that injustice of the kind described in this column is not a perversion of the system; it is the system. … Our ministers are not public servants. They work for the people who fund their parties, run the banks and own the newspapers, insulating them from democratic challenge.

I think Monbiot is right to shift the focus from “abuses” or “failures” of the economic system (language which implies that the system itself is fundamentally just and sound, or would be if properly regulated) to the inherent injustices of the system itself.  However, his rhetoric has some significant dangers in it, because it personalises what are really matters of social relations, impersonal economic forces.

Monbiot presents capitalism as a system in which a wicked “transnational elite” deliberately and maliciously sets out to oppress the rest of us. That’s an analysis which can lead as easily to fascism as to the liberal/democratic/socialist agenda which Monbiot would presumably support. “Transnational elite” is uncomfortably close to “international financiers” – and we all know what that was code for back in the last century. (Hint: try googling “transnational elite” and “zionist”. And then wash your hands.)

Blaming the individual beneficiaries of the economic system – indeed, encouraging us to hate them, the exploitative, gated-community-dwelling, political-system-perverting, Tory-party-financing bastards - is a dangerous path. As a great philosopher put it:

Beware the dark side. Anger, fear, aggression. The dark side of the Force are they. Easily they flow, quick to join you in a fight. If once you start down the dark path, forever will it dominate your destiny. Consume you it will…

What’s needed is not populist rhetoric about the “global gated community”, but a greater awareness of how economic power operates, regardless of the personalities who operate it or benefit from it. Perhaps someone could suggest Monbiot adds some Marx to his reading list?