This month, we are delighted to welcome Malcolm Hurlston, Chairman of The ESOP Centre to our guest blog spot. In this very thoughtful piece, Malcolm contemplates the rise of populism and the role that employee ownership might play in response to that.
Esop Centre Guest Blog
Employee share ownership has had support from all the parties I have had time to talk to over the years. Of course it means something different to all of them but that matters little to those of us who believe in it as long as they sign on the dotted line. The tide of populism may have provoked anguish but, being practical, what might the impact be on our metier?
It may have been Dryden who wrote “now I have lost the bliss I ne’er possessed” – on the death of his unrequited love – and the same applies to employee ownership and Brexit. Our topic was located in the Commission with Employment and Social Affairs rather than Industry or Enterprise and rarely was more than a quarter of an official continuously engaged. Its papers were at best academic and resembled the aggregation of apples and pears.
Populism in the United States, in our topic, goes back to Huey Long, Governor of Louisiana, whose slogan was “Every man a king (but no one wears a crown).” His son Russell Long was a US Senator for nearly 40 years and it was he who, putting his father’s legacy into practice, introduced the bulk of Esop legislation there.
Huey’s life was cut short by political assassination but his 1934 manifesto: Share the Wealth is worth an extended glance. It was highly redistributive and promised free education and training, pensions and a guaranteed annual family income. All this – plus a major programme of public works – was to be paid for by limiting executive reward and the accumulation of excessive wealth. Taking the dollar of 1934 to be worth $18 today, I estimate he was calling for a family income of $36-45,000 dollars with a limit on maximum income at $ 1.35 million .
Further funding would come from a graduated capital levy tax on everybody with net worth over $18m, which would have made a few pips squeak. Of course, the plans introduced by his son sought merely to share the capital worth rather than primarily to redistribute it but employee ownership is a natural destination on the populist direction of travel.
In the UK, populism won the referendum without becoming an electoral force. Nonetheless the JAMs – people just about managing in the May government phrase – are much the same people as the Louisiana electorate to which Huey Long addressed his appeal. Huey – with his liking for strong cocktails – would have gone down well with “Barry down the pub”, the elusive Labour supporter of whom both Corbynistas and Milibandians now despair.
We are told the May theory comes from Joseph Chamberlain known as Radical Joe, Mayor of Birmingham and later MP and minister. Like Huey Long he wanted redistribution to pay for his reform agenda. As he put it bluntly: ‘What ransom will property pay for the security which it enjoys?’ Theresa May will be constrained by her party, as was Joe, but what gives most hope for our agenda is her determination to drive from no 10, bending Treasury and Business to her will.
In that she resembles the two previous best PMs from our perspective: Margaret Thatcher and Gordon Brown both of whom had conviction and made things happen for us. (If a politician asks to see the research, you know they are wasting your time and will be out of office before anything is done).
So populism? Don’t even be beginning to despair. There could be a new golden era for spreading the wages of capital.
Malcolm Hurlston CBE
Chairman, Esop Centre, December 2016