Everyman His Own Capitalist
By SARAH GAINHAM
BONN
Nco-LIBERALISM in Federal Germany has the declared policy of including as many of its citizens as wish to join in the possession of pro- perty. Wages of industrial workers and techni- cians of all kinds are as high as in Great Britain; the money is there, it was a question of adopting a new attitude. Traditionally, the industrial pro- letariat was addicted to Marxism; but now, given the chance to acquire a stake in the industrial wealth of Germany, even those old Socialists who still talk Marxism have adopted the alterna- tive: Volksaktien—or People's Shares.
The idea is not new. Germs of it were con- tained in some of the theories born during and after the great slump at the end of the Thirties; Professor Erhard himself was then studying political economy as Director of the Institute for Economic Studies in Bavaria. Some of the ideas of public investment to create wqrk and buying power were adopted and distorted by the Nazis later (not invented by them : they invented no- thing). Similar ideas were at the root of Roose- velt's New Deal; in the US too the undertakings floated by public funds were afterwards put on the market to preserve free enterprise, as in the case of the Tennessee Valley Authority. What is new about the German system is the built-in guarantees that keep the investments down among the lower income groups.
First, experimentally, came Preussag (Preus- siche Bergwerke and Huetten AG—the Prussian Mining and Foundry Works Ltd.). This was a State company owning what lay in the West of the original steel company belonging to the Im- perial Hohenzollern family, nationalised under the Weimar Republic. Preussag needed capital investment; a share issue of about £21 million was floated in 1958, buyers having to.prove an income of below £750 a year (twice that for mar- ried people). Guarantees were devised to prevent the Big Boys buying up large blocks through middlemen. The Federal Government had meant to retain a large block of share capital itself to stabilise and control the new venture until the new capitalists had learned to run their own affairs; but the demand was so great this control was given up to avoid disappointing the public and creating a bad psychological atmosphere for future ventures. Preussag shares were at once over-subscribed and became a popular feature of life; jokes by the dozen showed how quickly the idea had spread (girl to suitor : 'No good trying to impress me with your re- spectability—if your income is low enough to buy Preussag shares, there's nothing doing').
The second issue of People's Shares was by the Volkswagen company, the gold mine that has grown out of Hitler's original swindle over the People's Car. The legal situation of the company was obscure; but the original subscribers agreed last week, after a fight which' took ahem four times in thirteen years to the supreme Federal Court, to a compromise which pays them £8 in cash or a £50 reduction if they buy a Volks- wagen.
In fact, if not by law, Volkswagen belonged to the Province of Lower Saxony, where tit factories lie, and to the works themselves. N( °Ws: wagen did not need capital—it was as rich as Croesus—nor did the management or the Prtr vince want outsiders to get at their happy f in Wolfsburg. Finally, as with the old sub" scribers, a compromise was reached. The Laild (Province) got a block of shares, the Federal Government another, a Foundation for the An' and Education was set up with accumulated funds, and shares were floated—People's Share' A new stabiliser was devised for a similar arrangement to Preussag; no matter how ma" 1) shares anybody owned, they could never car0 more votes at board meetings than would be represented by one ten-thousandth of the entire capital of VW. This does not prevent shareholders making alliances to control the company, but small stock holders have been encouraged to form clubs t° protect their interests. The Province and the Federal Government are exempted from the ing restriction for ten years to give the small car talists time to learn the tricks of the trade. Though there was a market recession at the time of the share issue (unlike Preussag, which were 00 a with a boom) and the motor industry in Germany was showing signs of strain for the first time since the currency reform of 1948, the whole issue was instantly snapped up; most were be' spoke beforehand through trade unions, savings banks and pay packet subscriptions. Every be' owner of a VW not only has a stake in the country and in one of the soundest properties in the world; he also feels that he has. Theonce; wagen has a strong hold on the imagination ell Germans—not only the 'beetle' itself, but its , strange history; now shareholders talk oiC Volkswagen works. It was a long way round but, no thanks to the Nazis, the idea of a PeoPle' Car has come true. Austria may try People's Shares too. The con servative side of the black-Red coalition there is trying to level off unwieldy costs in the huge the nationalised undertakings, largely run by A Red side of the two-in-hand government 0119., comprising over 80 per cent. of the basic industil of Austria, by floating shares in them as PeoPle;5 Shares. The Austrian Socialists, less empirical an less enlightened than the German SPD, are Wes. unwilling; just as they are unwilling to countelle. ance the movement for workers to buy Ebel' houses or fiats instead of accepting the' al as t' gracious gifts of city or local building dcP3r ments—if they can get them. The Austria ° Socialists cannot admit their dislike of the letariat becoming owners of property, but th do what they can to prevent the idea spreadniP In West Germany the Social Democrats are supporting the Volksaktien movement, partly no doubt because there are two trade union Illave' nnents here, that affiliated to the SPD and the Christian movement allied to the CDU govern meet party. The left wing of the Christian Der°,1 crats, including their trade unions, have play e' a hand in the coalition discussions between old government party and its new Free Demoeflli partners who are far to the right of the feller government—and who wanted, among °then things, to brake the movement towards EverY, b10 his own Capitalist, in the interests of the industrialists.
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