Four years after a financial crisis that pushed Britain – and much of the world – into the worst recession for decades, the major political parties still have no policies to prevent a repeat economic meltdown. They have failed to put in place adequate checks and balances to overcome the structural flaws in the private-ownership, free market system.
Unlike the Greens and Respect, the Labour, Conservative and Liberal Democrat leaderships support the highly centralised, largely unaccountable neo-liberal economic system – a system that allowed irresponsible financial decisions by banks and other major corporations. This failure to remedy the causes of the crisis leaves Britain vulnerable to more chaos in the future.
A significant cause of the near-catastrophe of the last few years is the way economic power and decision-making is organised: centralised, elitist, autocratic, secretive and unaccountable. These factors predispose the economy to risk-taking and recession, as well as being inherently anti-democratic and unfair.
One element of a stronger and more just economy is greater economic democracy: more participation, transparency, decentralisation and accountability.
Here are seven ideas on how to begin the structural transformation of the economy, to ensure it is publicly accountable and socially responsible:
Make corporate negligence and recklessness an explicit criminal offence, to reign in big business cowboys and ensure more responsible economic management. Bankers and company bosses should not be able to wreck whole economies and squander people’s jobs, pensions and savings with impunity. They ought to be personally liable for damaging corporate decisions, in the same way that doctors and others can be held liable for professional negligence. Sir Fred Goodwin would have not gambled with RBS if he had known that he could be held personally liable and face imprisonment. The threat of legal penalties is likely to result in more prudent corporate governance.
Require medium and large-sized companies (and public institutions like the NHS) to be accountable to their employees and to the wider public by including on their boards one-third employee-elected directors and independent directors to represent the interests of consumers. Proposals for employee directors were included in the 1973 Bullock Report and Labour’s 1976 Programme, and they operate today under the German works council system. Employee and consumer directors would be more likely to promote the wider public interest, rather than narrow management interests. They could act as watchdogs and whistleblowers against corporate irresponsibility. If these directors had been on the board of Northern Rock and had proper oversight, I doubt the management would have got away with so many reckless decisions. Having directors who are not driven by the profit-motive also increases the likelihood of company policies that are more socially inclusive and environmentally responsible.
Give trade unions (or employee mutual societies) a majority stake in the management of their members’ pension funds, to decentralise and democratise investment decision-making and to give it a social and ethical dimension. The nearly £900 billion invested in pension funds accounts for a third of the stock market; a massive potential counter-weight to the economic clout of big business. These contributor-controlled pension funds could be invested in ways that help make the economy more people-centred and public welfare-oriented. They are, for example, less likely to invest in the arms trade and clothing sweatshops. They would be more open to investment to meet social needs, including renewable energy, medical treatments, affordable housing and quality public transport.
Retain the current full or part public ownership of the banks that were rescued by the government, to ensure they operate in the public interest and they use their future profits for the public good. Why should banks like RBS be returned to the private sector when it made such a mess of their finances? The knock-down sell-off of Northern Rock short-changed the public by hundreds of millions of pounds. Retaining public control or remutualising the banks could be the means to fund new social housing, low-interest loans to poorer families and employee-owned enterprises.
Give employees the legal right to buy-out their companies and turn them into workers cooperatives (possibly with funding from the publicly-owned banks). This would weaken the power of big corporations, localise and socialise economic decision-making and give employees incentives for greater productivity. Evidence shows that people employed in workers cooperatives often have higher output, better job satisfaction and stronger social solidarity.
Limit corporate bonuses to a percentage of profits, make them payable in the form of shares and defer payment for ten years. This would deter short-term, high-risk investments. It would make bonuses conditional on a business’s long term success. Only people who made successful, sustainable investment decisions would be rewarded.
Legislate for the progressive transfer of share ownership into trade union-administered employee share funds. This is a variation on the ‘wage-earner funds’ proposed by Rudolf Meidner of the Swedish trade union federation, the LO, in the 1970s. It would obligate all private share capital companies to assign to a union-controlled fund a proportion of their annual profits in the form of a new share issue. Gradually, over many decades, it would give employees, through their unions, a controlling interest in their firms – eventually transforming them into self-governing workers’ co-operatives. The great strength of this scheme is not only its democratic and social justice elements. It also incentivises and rewards employees for economic success. The more productive and profitable a company, the more shares it has to issue to the employees’ funds and the sooner employees gain a controlling stake.
As well as redistributing wealth and power in favour of employees and the wider public, these reforms would reduce the chances of a re-run of the economic crisis. They would achieve these twin goals by a combination of decentralising economic power, democratising economic decision-making, improving corporate social responsibility and strengthening the accountability of businesses to their staff and consumers.
Most of these policies could be implemented unilaterally by a UK government. However, given the globalised economy, they would work most effectively if they were adopted by the whole EU. Although still predominantly a big business cartel, there is nothing to stop the EU pioneering this new economic model if the peoples of Europe demand it and elect parties pledged to enact it. The EU’s massive share of international finance, production and trade would enable it to withstand pressure to conform to the dominant neo-liberal economics of the US-China axis. In other words, Britain and the EU could lead the way in the structural transformation of autocratic, dog-eat-dog capitalism into a more democratic, cooperative and accountable green socialised economy. Why not?
* For more information about Peter Tatchell’s human rights and social justice campaigns: www.petertatchell.net
Hilary Wainwright argues against reclaiming populism for the left and for a leadership that supports people’s capacity for self-government
It may seem as though these apps are working for us, but we are also working for the apps, writes Kurt Iveson
It's over 100 years ago that domestic workers began to organise to demand the same rights as other workers. Yet with LSE cleaners on strike this week, historian Laura Schwartz asks: how much has really changed?
Omar Barghouti asks whether Donald Trump, in his recent break with America’s long-standing support for the two-state solution, has unwittingly revived the debate about the plausibility, indeed the necessity, of a single, democratic state in historic Palestine?
Glenn Greenwald was interviewed by Amandla Thomas-Johnson over the phone from Brazil. Here is what he had to say on the War on Terror, Trump, and the 'special relationship'
In 1972 David Widgery wrote about the bitter intensity of love in capitalism
Andrew Dolan on how the left must match the anti-establishment rhetoric of the right, but with a different politics
Emma Snaith speaks with directors Emer Mary Morris and Nina Scott about the power of theatre to encourage community resistance to estate demolitions.
In the first of a series of interviews with migrants' rights and racial justice activists from the US, Marienna Pope-Weidemann speaks to Peter Pedemonti, co-founder and director of the New Sanctuary Movement in Philadelphia
Photos from The World Transformed festival in Liverpool, by David Walters
Red Pepper’s race section: open editorial meeting 19 April
On April 19th, we’ll be holding the second of Red Pepper’s Race Section Open Editorial Meetings.
Changing our attitude to Climate Change
Paul Allen of the Centre for Alternative Technology spells out what we need to do to break through the inaction over climate change
Introducing Trump’s Inner Circle
Donald Trump’s key allies are as alarming as the man himself
Secrets and spies of Scotland Yard
A new Espionage Act threatens whistleblowers and journalists, writes Sarah Kavanagh
#AndABlackWomanAtThat – part II: a discussion of power and privilege
In the second article of a three-part series, Sheri Carr reflects on the silencing of black women and the flaws in safe spaces
How progressive is the ‘progressive alliance’?
We need an anti-austerity alliance, not a vaguely progressive alliance, argues Michael Calderbank
The YPJ: Fighting Isis on the frontline
Rahila Gupta talks to Kimmie Taylor about life on the frontline in Rojava
Joint statement on George Osborne’s appointment to the Evening Standard
'We have come together to denounce this brazen conflict of interest and to champion the growing need for independent, truthful and representative media'
Paul O’Connell and Michael Calderbank consider the conditions that led to the Brexit vote, and how the left in Britain should respond
On the right side of history: an interview with Mijente
Marienna Pope-Weidemann speaks to Reyna Wences, co-founder of Mijente, a radical Latinx and Chincanx organising network
Disrupting the City of London Corporation elections
The City of London Corporation is one of the most secretive and least understood institutions in the world, writes Luke Walter
#AndABlackWomanAtThat: a discussion of power and privilege
In the first article of a three-part series, Sheri Carr reflects on the oppression of her early life and how we must fight it, even in our own movement
Corbyn understands the needs of our communities
Ian Hodson reflects on the Copeland by-election and explains why Corbyn has the full support of The Bakers Food and Allied Workers Union
Red Pepper’s race section: open editorial meeting 15 March
On 15 March, we’ll be holding the first of Red Pepper’s Race Section open editorial meetings.
Social Workers Without Borders
Jenny Nelson speaks to Lauren Wroe about a group combining activism and social work with refugees
Growing up married
Laura Nicholson interviews Dr Eylem Atakav about her new film, Growing Up Married, which tells the stories of Turkey’s child brides
The Migrant Connections Festival: solidarity needs meaningful relationships
On March 4 & 5 Bethnal Green will host a migrant-led festival fostering community and solidarity for people of all backgrounds, writes Sohail Jannesari
Reclaiming Holloway Homes
The government is closing old, inner-city jails. Rebecca Roberts looks at what happens next
Intensification of state violence in the Kurdish provinces of Turkey
Oppression increases in the run up to Turkey’s constitutional referendum, writes Mehmet Ugur from Academics for Peace
Pass the domestic violence bill
Emma Snaith reports on the significance of the new anti-domestic violence bill
Report from the second Citizen’s Assembly of Podemos
Sol Trumbo Vila says the mandate from the Podemos Assembly is to go forwards in unity and with humility
Protect our public lands
Last summer Indigenous people travelled thousands of miles around the USA to tell their stories and build a movement. Julie Maldonado reports
From the frontlines
Red Pepper’s new race editor, Ashish Ghadiali, introduces a new space for black and minority progressive voices
How can we make the left sexy?
Jenny Nelson reports on a session at The World Transformed
In pictures: designing for change
Sana Iqbal, the designer behind the identity of The World Transformed festival and the accompanying cover of Red Pepper, talks about the importance of good design
Angry about the #MuslimBan? Here are 5 things to do
As well as protesting against Trump we have a lot of work to get on with here in the UK. Here's a list started by Platform
Who owns our land?
Guy Shrubsole gives some tips for finding out
Don’t delay – ditch coal
Take action this month with the Coal Action Network. By Anne Harris
Utopia: Work less play more
A shorter working week would benefit everyone, writes Madeleine Ellis-Petersen
Mum’s Colombian mine protest comes to London
Anne Harris reports on one woman’s fight against a multinational coal giant