It was going to be one of the great themes of the Thatcher era, a key part of what we saw as the coming freedom. All through the seventies, and as far back as the late sixties, we toiled in the Conservative backrooms trying to give real momentum and depth to the cause of popular capitalism and the capital-owning democracy.
The theme of course was well-established in Tory thinking, going right back to Churchill’s and Eden’s times. But we were determined to give it fresh life in the grey atmosphere of the socialist – and deeply divided- 1960s and ’70s Britain, as the old and failed consensus politics collapsed around us.
We drew inspiration heavily from the USA, and from the works in particular of California-based Louis Kelso, the pioneering author of the bible of capitalism, ‘The Capitalist Manifesto’, and in effect the modern messiah of employee share ownership plans – ESOPs, – and mass ‘worker’ capitalism, although there were many other apostles.
Kelso argued that wider ownership of savings in all forms, but particularly of stocks and shares, was not just good labour relations, it was THE answer to the paralysing wages-versus-capital conflict, turning earners into owners , making new capitalists by the million, and giving dignity, security and status which sole dependence on the weekly or monthly wage could never ensure.
He believed that this was the pathway to genuine public ownership – ownership by the people – as opposed to the bogus ‘public’ ownership of fat-cat socialist corporatism. It would bring both enlarged freedom and an increased sense of social responsibility at all levels, as well as taking some of the steam out of ceaseless inflationary wage demands and domineering trade union militancy.
All this was music to our ears – and music was what the dismal British economy and British politics then badly needed.
As the Thatcher revolution dawned we aimed to marry the wider ownership theme with two other strongly emerging Conservative ambitions – greatly increased support for smaller businesses, and privatisation. It was this added ingredient, we hoped, which would elevate the mere denationalisation of lethargic state enterprises into a popular and wealth-sharing capitalist crusade.
When the time came, did we succeed? Sort of. Not of course during the Heath Government when, after a brief dribble of minor encouragements to wider ownership the drift back to a thicket of incomes policies and inevitable industrial strife soon crowded out most financial and market reforms.
But a decade later, with Margaret Thatcher in Downing Street, the big opportunities began to open out. The obvious manifestation was freedom to buy and own council houses, driven by the late Peter Walker, while tax changes began to encourage some recovery for SMEs. But then the big tide of privatisations really began – leading in due course to the ‘Tell Sid’ campaign and the feeling that popular capitalism was at last taking hold.
One of the neatest early privatisations, over which I presided but where the groundwork was largely laid by Norman Fowler, was the privatisation of the National Freight Corporation, which both dramatically dynamised an inefficient and ramshackle state entity and, more to the point, delivered a nice bundle of shares to 80 percent of the staff through an employee buy-out scheme. Substantial hidden NFC assets were uncovered – especially real estate. It was said that enriched and motivated truck drivers discovered they could turn their vehicles in fifty percent less depot space than previously insisted on by the union, thus releasing large areas for development and considerably boosting the value of their shares.
All in all, popular capitalism in Britain moved forward in some degree during the Thatcher era – not as far as some of us wanted, and not nearly as a far as the USA , with its forty percent of the population holding shares and its intense radio and TV coverage of financial news – almost absent in Britain these days on the BBC or other channels.
What does this tell us for today? The Thatcher reforms just about survived the Blair years of relative disinterest in popular capital ownership and some progress has undoubtedly been made over the decades. Traces of the spirit of start-up entrepreneurship and optimism of the Thatcher era are coming back after the grim post-Lehman years.
But something is still missing. Most obviously the miserably low returns on all forms of lower risk holdings and assets offer a rotten incentive to savers, and the abnormally low interest rate policy, which is bound to come to an end, hangs like a sword of uncertainty over share investment. Soggy management of pension funds, with rip-off charges and commissions, casts another shadow, although recent and proposed pensions reforms will help undo past damage.
The irony is that when it comes to large-scale progress towards popular capitalism one needs nowadays to look more to the high-saving Asian societies, with Latin-America and parts of Africa following along the same path, to see the culture of widely-spread capital ownership truly taking root.
Advice from the past to younger generations of leaders can be infuriating, but the one piece I have dared to offer is that the butter – when there is some – is spread to all corners of the toast. Maybe ‘tastes-like-butter’ will have to do for the time being, but spread it must be, by every conceivable device and incentive to ensure that as many families in the land as is sensibly possible have a share in the revived growth of national wealth, have something more than just wages on which to fall back, and are stakeholders in the new capitalism of the digitalised age.
The need is for more of that most powerful political ingredient of all in good government, social stability and advancement – namely, imagination.
