Ownership
The question of ownership lies at the centre of economic life and in this issue of Associate! we draw attention to various facets of this question. It begins with an article by Stephen Torr, looking at the correlation, or otherwise, of economic substance and legal form.
Torr writes mindful of the piece by Will Hutton that sums up the current thinking that typifies public concern. In his view ‘the crisis of ownership […] goes to the heart of our current ills. The title of his piece is in itself revealing when he says, ‘We need a revolution in how our companies are owned and run.’ The implication is that there are two issues needing to be addressed in that the notion of ownership entails two distinct concepts.
The first concerns the benefit that ownership brings, the second control. An owner of a share in a company (and it is primarily on this kind of ownership that the debate centres) will normally have both the benefit (in the sense of an entitlement to dividends and residual values) and the control (through voting rights to appoint the board at the Annual General Meeting). But the fact that these two rights are normally found together does not mean they need to be fused and this distinction should be borne in mind in the various perspectives that this issue considers.
When Hutton describes the problematic strategic choices that ‘great’ companies have made, it is to be seen in the light of the short-term motivations that give the company its direction. Hutton wants to deepen the notion of ownership by equating it with commitment (manifest, for example, in long-term holdings) and to formalise the obligation of directors by legal redefinition that would give companies more of a Trust structure. It is in this area that the debate is to be had: who gets the say and on what basis?
The second piece ‘Of Coops and Associations’ considers to what extent ‘co-operative models’ might be an example of associative working, whether in essence they heighten public-spiritedness or embed self-concern. This question and that of economic effectiveness must decide whether or not they offer a viable alternative to the corporation as it has evolved thus far.
The archive piece ‘The Coming Day’ features the example of a group of companies working together in the 1920s with the explicit intention of using the joint stock company to foster a co-operative industrial spirit that would allocate excess profit to research for public benefit.
The AE-Exchange page discusses a contemporary example of what might be seen as a parallel venture to ‘The Coming Day’, the Mondragon co-operative in Spain. Is the model generic and therefore scaleable to a macro-level or is it peculiar to the culture which gave rise to it?
Finally in Victor’s View from Rare Albion, the core underlying question is alluded to: ‘how is one individual or group to express confidence in another?’ How one understands that question, so one will arrange how capital is allocated to economic activity in ways that reflect wider needs. These arrangements cannot but be expressed in the details of company structure and Victor’s View comprises a practical distillation of the bigger picture issues (which Hutton also eloquently describes) into a trim-tabbed vehicle, ‘The Right-on Corporation’, that is fit to enable individuals as entrepreneurs firstly to be capitalised in their initiative and then to make their undertakings serve a star that ‘takes full account of the social, ecological, and financial environments in which it operates.’
There is a fine line to be walked between fostering anti-social individualism and constraining the enterprising spirit upon which economic life depends. In the former camp we find gung-ho capitalism, in the latter those who would regulate all initiative through external control. Those who walk this line might well find a useful motto in Rudolf Steiner’s averring that ‘it means extinction and death to the economic body when we deprive the individual of his initiative, which must proceed from his intellect and take part in the ordering of the means of production purely for the benefit of human society.’ (1)
(1) The Social Future. Anthroposophic Press, New York. (Lecture 2, 25th October, 1919, Zurich. GA0332a.)