Saturday, 25 June 2011

Blue Labour, governance and nostalgia

I was at the Compass conference today. I spoke in one session, on pay inequality, but I also managed to catch the session on Blue Labour's economy. The fact that there was a slot on this subject shows that a) people want to get into a bit more of the detail of this strand of thinking and b) that there is more to the Glasman tendency than just 'faith, flag and family'.

I am one of those who thinks that BL has something in it and I've always thought characterising it as 'right wing' fundamentally misses the point. Even before I read more about Glasman I thought the language being used was influenced by Polayni, and I think that influence demonstrates that this isn't just about cultural conservativism and nostalgia (although....).

What was interesting to me today was that the speakers, including Glasman, started talking about... err... corporate governance without any prompting from the audience (even before the questions started). Picking up on the idea that work, and workers, should be valued the idea of governance reform was tied to the need to make the UK's conception of business less about flexible labour markets, speculation and - implied - a liberal Market for corporate control.

Instead Glasman in particular advocated a much bigger emphasis on vocational training and acknowledgement within governance of the contribution from labour. This, he suggested, would be a shift away from recent history when the workforce in companies has been badly treated and excluded as party within governance. Essentially he seemed to be suggesting that by properly valuing workers, and giving them a real voice, a sense of common endeavour within companies could be established to replace the current deference to finance capital.

All quite interesting, and the concrete proposal stemming from it was workers should be represented on boards in UK companies, so co-determination, or something like it.

Workers on the board though? As is obvious, despite spending my working life trying to make it work I am not wedded to the UK's current approach to governance, and would be open to arguments for a tilt away from shareholder primacy, like employee representation of rem comms. But co-determination would be a major shift.

And this is an area where maybe nostalgia does show through. Because this sort of reform, a shift to a more Rhineland capitalism, was of course The Next Big Thing in the mid 90s. Labour had the opportunity in 1997 for this kind of turn, and did not take it. It would have been difficult then, I think it would be equally if not more so now. Because whilst I personally agree with the need to recognise the contribution of the workforce, and to enshrine their right to participate, can we marshall enough evidence of the business benefits to build support for such a radical change?

Labour could of course just make the case in political terms, but that would be a big, big statement, and are we sure that the public would respond positively to it. Certainly some business people believe that the market for corporate control is too liberal, and that they face too much short-term pressure from investors who don't really care about the long-term success of the company. But would they think a strategic alliance with labour would be a good way out of it?

So some big obvious challenges to implementing such a major reform. At least you can't accuse BL of not being ambitious.


Andrew Curry said...

Why would a shift to 'Rhineland capitalism' be harder now than it was in 1997? Germany has clearly survived the crash in a better state than the UK; issues like the hostile Kraft takeover of Cadbury's have demonstrated the impotence of existing governance to protect existing businesses and their investment in people and knowledge; corporate excesses such as booming CEO pay, post-crash, have created greater concern about fairness; employee-owned businesses such as John Lewis have weathered the crisis better than conventionally owned competitors. If not now, when?

Tom Powdrill said...

I just think in 97 we had a real mandate for change and enough support to be radical. I don't think we are anywhere close to that now, quite apart from not being in power. Many non-financial companies would also argue that they did nothing wrong pre-crisis so why does their governance require such a radical overhaul?
Also I think the general acceptance of the right of labour to play a significant role - as labour - in society, let alone Corp gov, is weaker now than 97.
As I say I'm sympathetic, but it's very aspirational.