Tuesday, 21 April 2009

Share-ownership debates - we've been here before

One of the books I have on the go at the moment is Lawrence Mitchell's rather good The Speculation Economy. This is a pretty exhaustive overview of the way the stockmarket rose to prominence in the US economy, and a decent read. One of the things that surprised me (which rather exposes my lack of historical knowledge of issues I regularly sound off about) is that some of the debates we are having now about empowering share-owners were played out over 100 years ago.

Reading though Mitchell's research into the discussions that were going at the time, you find early versions of many of the arguments being played out right now. Like that the best way to ensure that corporations stay on the straight and narrow is to have engaged shareholders. Meanwhile there was a lot of chatter about getting the ordinary bloke in the street to have a direct stake in the economy through share-ownership.

Most interesting to me though is a quote from the Industrial Commission in 1902 which provides an early sceptical take on how far employees could actually participate (as investors) in corporate governance:
"[I]n view of the enormous and inceasing size of units of industrial control, any expectation of an effective participation of wage-earners in the government of the great industries by any method based on their individual ownership of shares of the capital is chimerical."


Anonymous said...

As a regular reader of your labour and capital blog there are some issues I would liek to discuss in detail with you. Cant find an email address for you?

Thanks, Nick ( nick.bradley@vfemail.net)

Tom P said...

Hi Nick

happy to have a chat - will drop you line later.