Towards worker ownership
Robert Oakeshott
With the partial exception of Mr James Prior, who has spoken of 'methods of financial participation' in the context of the industrial democracy debate, no leading figure in the Labour or Tory Party has yet grasped either the importance or the potential popular appeal of worker ownership. Of course this is not surprising. Labour is uneasy about betraying the party's commitment to public ownership and about offending the trade unions. The Tories are frightened of upsetting the centres of capitalist financial and industrial power. Yet both common sense and the available empirical evidence suggests that industrial democracy, by which I mean the ultimate control of enterprises by people working in them, is bound to function better with worker ownership than without it. There is also striking evidence, if only at this stage from the US, that policies designed to encourage worker ownership could well have a significant appeal to the electorate. A US opinion poll conducted by Hart Research in 1975 showed that 66 percent of an interviewed sample would prefer to work in an employee-owned enterprise rather than in one belonging to private investors or the state.
Common sense tells us that power without responsibility will lead to bad decisions. Only if worker power is made responsible in the precise sense of having something at risk, is there any assurance that the ' best decisions will have a good chance of being made. Conversely, unless worker ownership arrangements are brought in together with worker representatives on company boards, the shareholders' representatives on those boards are likely to find themselves in the hopeless position of having responsibility without power.
But there are more fundamental arguments for worker ownership in Great Britain. To begin with, there is the age-old argument for spreading wealth. It is difficult to see how that can be achieved to any significant extent in an industrial society except by some system of worker ownership. However, perhaps the most persuasive argument for introducing a measure of worker ownership into the British economy is that it would bring our ownership arrangements much more closely into line with the new realities. When shareholders enjoyed real power, it was appropriate that ownership of the enter prise should lie with them and for company law to be structured accordingly. But those conditions no longer apply. Worker power now normally exceeds that of the shareholders by a large margin. Far better, to adapt company structures to these new realities by assigning ownership of the enterprise to those who have both the largest interest in its success and the power to reach the goals they set themselves.
Of course, the sceptic will reply, the record of enterprises structured in this way, the traditional workers' co-ops of one kind and another, has been unimpressive. Until quite recently that argument has seemed on balance convincing, for it is true that there have been many more failures than successes. However, the balance of the debate has lately shifted in the direction of cautious optimism for two reasons. First, new studies of workers co-ops over the last hundred years or so have thrown up plausible explanations of relative failure. Unfavourable access to capital, low-calibre management, a hostile environment, poor co-operative laws, faulty structures — these are considered the key handicaps in terms of which the record should be understood. Secondly, public attention has lately been drawn to a remarkable group of mainly industrial co-ops centred on the old steel-making town of Mondragon in the Basque provinces of Spain. They have been fairly widely described in the press and we need do no more than note four crucial points about them. First, they are structured in such a way that their democratic control arrangements are solidly underpinned by a major element of individual worker ownership. Second, by creating for themselves a splendid hybrid institution, the Caja Laboral Popular, (CLP), which combines the roles of local savings mobiliser and pro
wider of professional management back-UP services, they have overcome two of the main problems with which traditional workers' co-ops have been beset. Thirdly, these are not enterprises which would appeal, to borrow a phrase of Richard Gott's, to the 'real ale and sandals brigade', but good, second-division companies mak' ing washing machines, refrigerators, earth-moving equipment, machine tools and so on. Finally, and particularly since the CLP was founded in 1959, the Mondragon co-ops have expanded dramatically creatin8 an average of 800 new jobs a year between 1960 and 1977.
The success of these enterprises owes
much to the creative strength of local BO' que nationalist feeling. And that ingredient might not be easily reproduced in Britain, On the other hand, there are surely some parts of the country where local pride and loyalty is stronger than class antagonism. Mondragon style co-ops might not have much going for them on Merseyside or in any of the other depressed areas of the old industrial north. But the position might be substantially different in places like Leominster, or Yeovil, or King's Lynn, However, the climate for workers' co-ops IS now better than at any time since the out. break of the first world war. This is reflected in the all-party support for the proposed, new government funded Co-operative Development Agency. There is also some prospect of all-party support for certain Ea% concessions for workers' co-ops. And there is the prospect that the CDA, once in bus' mess, may well be able to press successfullY for improvements in co-operative law. Against this background it is not altogethel unrealistic to foresee two kinds of develoP' ment: a decision by some existing enter; prises to convert themselves into workers co-ops, and some initiatives to start work' ers' co-ops from scratch.
If these things do start to happen, then it
will be essential that the lessons of the Mondragon experience be properly under' stood and in particular that there should be no misunderstanding of the crucial impe tance of incorporating an element of indi' vidual worker ownership in the new struc' tures. But if that and other lessons can be learnt, then I see no reason to be undul) despondent about the prospects of success. Of course any actual developments in the 'early stages will be on a small scale. But in the longer term there seems no reason why to work in a worker owned co-op should nol appeal to people of very differing political attitudes. The reason is that such co-oPs reflect the values of both group solidaritY, derived from the traditions of the working class, and those of sturdy self-reliance which are attractive to the right. Who knows, We might move on eventually 'to tackle a more serious task, the distribution of ownershiP in those great units of production, distribution, transport etc which cannot of their nature be worked severally as can the on the flank and forgive forge, the carpenter's shop and the grooc"
ery.' The words are Hilaire Belloc's,
Previous page
