The Democracy Collaborative's testimony to the IPPR Commission on Economic Justice on how to bring about a thoroughgoing democratisation of our political economy.
The Institute for Public Policy Research (IPPR), the United Kingdom’s leading progressive think tank, is heading-up the Commission on Economic Justice, a two year initiative to examine the current state of the British economy and present a new vision for a more sustainable post-Brexit Britain, grounded in justice and broadly-shared prosperity.
In the fall of 2017, they reached out to The Democracy Collaborative requesting evidence from the United States on broad-based ownership strategies and recommendations for how wealth can be generated and shared more equally across nations and regions, as well as gender, ethnic, and socioeconomic groups.
In response, we submitted the below testimony on the best practices and innovative models that we have studied and supported across the country over nearly two decades. These efforts present real solutions and viable alternatives to the trenchant challenges of ever-worsening wealth inequality both here and abroad.
They have used this testimony as support in their just released report: Capital Gains: Broadening Company Ownership in the UK Economy.
Writing about this report, the editorial board of The Guardian has offered an enthusiastic endorsement of its principal recommendations:
The wealthiest 10% of UK households now own 45% of the nation’s wealth, while the least wealthy half of all households own just 9%. A larger proportion of the population ought to have a greater share of capital. Owning capital is not just about expanding fortunes, it is also about gaining control over how businesses are run. Alternative forms of ownership allow power, voice and reward to be distributed differently, more pluralistically and democratically. A recent report by the Institute for Public Policy Research makes three very good suggestions, which are mainstream in Europe, to put flesh on the bones of such ideas. First, it suggests the establishment of a national citizens’ wealth fund, giving the public a share of corporate and other assets. A model of this could be Norway’s wealth fund, which has £65bn worth of stakes in 74 companies, generating £3bn in dividends a year, to create value in the national economy. The report also calls for the expansion of employee ownership trusts, which give staff majority ownership of companies. It is a scandal that boardrooms hoard share-based pay in the UK, awarding themselves 30 times the equity that ordinary workers might get if salary levels determined handouts of stock. Last, the thinktank rightly pinpoints the need to grow the co-operative sector, a form of capitalism whose virtue can be gauged by the fact that the five largest UK mutuals paid 50% more tax than Amazon, Facebook, Apple, eBay and Starbucks.
Here at The Democracy Collaborative, we are excited to continue participating in this increasingly robust transatlantic dialogue around the urgency of a transition to a more democratic economy.