Friday, 11 May 2012

Tackling a chief cause of the economic crisis

For our economy to prosper and grow we need to reform our economic system. At the heart of this debate is the issue of ownership. The extreme libertarian view of ownership which has led to the dominance of the PLC model of ownership where improving shareholder value is the over riding objective of the company is part of the problem and a chief cause of the economic collape

Will Hutton, who chaired the Ownership Commission, previews the report and draws out key areas for reform. Interestingly when Labour set up the Commission their chief concern was related to so called 'public sector reform'. Hutton makes the point the PLC model at large in the economy was part of the problem.

 Liberals in Britain have for a century argued the case for a reform of company law on ownership. We have tried to ensure that the contribution of employees was given equal status with capital- these reforms are more urgent now with the decline in individual ownership and the role of institutional ownership/hedge funds/private equity.

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