Employee ownership has always been a cornerstone of Liberal policy and in every manifesto from Asquith to Ashdown. Our leaders seldom talk of it now other than to advocate a meagre bit mutualism on the margins. This is a far cry from the policy which the party championed for most of the last century.
Jo Grimond was enthused by the example of the Spanish worker owned businesses in Mondragon to which Robert Oakshott introduced him. These examples of worker owned industries and mutual banks are in a long line of models of ownership which Liberals have highlighted. The great Liberal Yellow Book of 1928 has a whole chapter on the Diffusion of Ownership with examples from the UK and America.. Successful British Companies like Baxi , Scott Bader and John Lewis are owned by their employees.
The spectacular collapse of the economy from which we are slowly recovering was in part brought on by the failure of the model of governance and ownership which dominates in Britain today. The only obligation of Directors is to shareholders who want to see the value of the shares increase. This leads to short term policy making with no regard for the other legitmate stakeholder-the employees. Liberals have always argued (until Clegg took over) that this is a bad model of ownership and governance. The interests of capital should not be dominant. Our plan was always to use state power to ensure that as a minimum companies with over 50 employees should have co-owneship -industrial democracy and profit sharing. Jo Grimond and Robert Oakshott helped found what is today known as the Employee Ownership Association. Over on the Equality Trust website Robert Oakshott writes:
"In an employee owned business, the majority of the shares are held by individual employees, or held on their behalf by a trust, or a mixture of both. Ideally there will be safeguards in place to prevent shares being sold to private shareholders. When this is combined with participative management, where employees have a significant input into decision making, there are both substantial economic benefits for the business1 and growing evidence of health and social benefits for individual employees.2
Democratic employee ownership and control also has many advantages as a way of creating a more egalitarian society. It puts earning differentials under democratic control, redistributes wealth quite substantially, prevents external shareholders taking unearned income, improves productivity, develops a sense of community and begins to free people from the divisions wrought by hierarchy and status competition. Furthermore, because employee ownership can and does exist side-by-side with conventional business, it makes successful transformation achievable, with the new society developing within the old."