Resist the “John Lewis economy”

Nick Clegg’s advocacy of a “John Lewis economy” in which more workers own shares in “their” company is nonsense, an attempt to put a progressive spin on the massive assault on working-class living standards and rights which his government is overseeing.

Claiming that politicians are “too often cowed by corporate power” (yes) and denouncing “crony capitalism” (yes), Clegg has called for a “well-rewarded workforce” through more “employee share ownership”.

Clegg’s soundbite is illiterate even in its own terms. John Lewis workers do not own shares in the company. It is a mutual company, without shareholders, in which workers receive a payout every year. Whatever you think of that model, it is not actually what Clegg is advocating. Clegg wants a few more workers to get shares in private companies. And of course that begs the question: how, with declining real wages and living standards, are workers going to acquire these shares?

Clegg likens what he’s trying to do to the Thatcher government’s expansion of share ownership in the 1980s. That’s an apt comparison. What happened then was that more middle-class people and even a few better-off workers got a few shares — at the same time as real living standards fell and the main outposts of working-class control and democracy within British society were demolished. Indeed the distribution of shares was often linked to privatisation (of British Telecom, for instance).

The figures show the reality of Clegg’s call for “well-rewarded employees” and “responsible capitalism”, and David Cameron’s calls for “popular, democratic capitalism”. (Apparently when Clegg launched his “campaign”, in front of an audience of City bankers, he asked who in the room was in favour of “irresponsible capitalism”. As the Guardian’s Simon Hoggart commented: “No, none of them did, of course not. But I’ll bet some of them thought it.”)

In the last year, average real wages have fallen 3.5 percent, while senior managers have gained by 7 percent and CEOs/directors by 15 percent. The economy is on the brink of another recession and many predictions suggest that next year unemployment will approach three million. Meanwhile the banks are preparing to pay billions in bonuses — for instance a predicted £10 million for Barclay’s Bob Diamond.

In his Mansion House speech, Nick Clegg apparently cited the key vested interest he wants to take on as the trade unions! That tells you everything you need to know.

Beyond the cynicism and hypocrisy of the Tories and Lib Dems, what should socialists say about cooperatives?

There is a lot of buzz among Labour politicians about “the cooperative model”. This is posed as an alternative to the Tories’ privatisation agenda. But in fact it is also an alternative to the socialist demand for publicly-owned, publicly-funded services run under democratic control.

The point about cooperatives is that they typically operate in the market, facing constant pressures to function more and more like ordinary capitalist businesses or go under.

The Cooperative, which runs many supermarkets and other businesses, for instance, was founded by workers as part of the labour movement. But today, despite its lack of shareholders, it is hardly distinguishable from a normal capitalist firm. Its workers certainly do not see much difference; the GMB union has clashed more than once with Coop management. (Talk to anyone who’s worked at John Lewis for a similar, but worse, picture.)

As Marx pointed out, cooperative businesses created by workers’ struggles can have value in providing an example that capitalism is not the only way of doing things. One of the best modern examples is the cooperatives set up in the occupied factories and workplaces which emerged in Argentina after the 2001 economic crisis. But tellingly the most developed and “revolutionary” example, the Zanon ceramics factory in Neuquén, has demanded ownership by the state (combined with continued workers’ control) because they do not want to operate in the market.

This is a world away from what the Labour politicians have in mind. When Vestas wind turbine workers on the Isle of Wight occupied their factory and demanded nationalisation to stop it closing, then Energy Secretary Ed Miliband would not touch it. The point is that this wing of the Labour Party sees cooperatives as something counterposed to public ownership.

At the same time that he praised workers’ cooperatives, Marx also argued that they cannot conceivably replace the capitalist economy, bit by bit.

And the idea that they can provide a real alternative at a time of huge ruling-class offensive against the most basic working-class rights is delusional.

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John Lewis cleaners' protest, 23 June

On Saturday 23 June, from 3pm, at 300 Oxford Street, John Lewis cleaners will be protesting for the London living wage, no cuts to jobs or hours, and recognition of their union the IWW. Please come along and show solidarity!