Rethinking the Third Way

Taking the Third Way as a form of compromise between the Old Left and the New Right, the policies of Blair, Brown et al. seem to have barely scratched the surface of third way thinking. Instead they have adopted the capitalism of the New Right and sought to append social justice through government intervention. However, there can be a more radical, alternative application of the Third Way.

If the conflict of the 20^th century between socialism and capitalism can be understood as the conflict between state ownership (on behalf of the people) and private ownership of the means of production, then surely supporters of the Third Way should be committed to marrying these two economic systems together as a compromise for the 21^st century? The planned economy was proven over the course of the last 100 years to be unable to withstand the dynamism of the market economy, but why does that mean that proponents of socialism have to give in to the dominance of capitalism? Instead of state ownership of the means of production, the next Labour government could instead aim to decentralise and redistribute ownership among employees and allow them to restate their claim to ownership which nationalised industries used to represent. In addition, this new system of shared ownership between employees and investors would allow companies to harness the dynamism and flexibility of the market economy and shake off the constraints of state planning – a true Third Way alternative.

I propose a ‘Bundesliga model’ of company ownership. Germany’s highest tier of football, the Bundesliga, operates a strict policy on club ownership and mandates that clubs must be majority-owned by fans. This manifests itself in the 50+1 rule which is intended to prevent control of a club by a single entity and instead promote fan ownership of clubs. Why shouldn’t this ownership model be extended to the wider economy?

As opposed to fan ownership, the next Labour government could push for majority ownership of companies by employees. Indeed, there are several key advantages to this system. Shared ownership would allow company profits to be divided between both employees and investors and would go some way to decrease income inequality. Additionally it would allow employees to influence company policy and represent their needs alongside those of investors. In the wake of Thatcherism trade unions have lost their traditional strength and appeal. However, as opposed to bargaining with company bosses from the outside, why can’t trade unions work within companies representing the rights of shareholding employees? This would allow trade unions to regain their relevance and allow shareholding employees to represent their views collectively.

While Thatcher offered the electorate the ‘Right to Buy’ scheme and increased home ownership, the next Labour government should subvert Thatcherism, apply the Third Way and legislate to give aspirational men and women the right to shared ownership of their companies.