In the UK, Jeremy Corbyn is proposing a major overhaul of corporate governance.
His plan? Allocate 10 percent of ownership and control of private companies to the workers that work there.
The idea grows out of proposals percolating in Labour Party circles for a while to ditch the ideology of so-called “shareholder primacy,” which puts the interests of owners of stock ahead of other stakeholders, like consumers, workers, and communities. (common-wealth.co.uk/Democratic-own…)
This isn’t nutty. The US economy, for instance, performed better when shareholders faced legal and cultural constraints from hoarding all the wealth. (newyorker.com/business/curre…)
Economists like @rodrikdani @natalyanaqvi @MazzucatoM @stephanygj @gabriel_zucman and others see this as a welcome break from decades of austerity and shareholder-centric policies. (drive.google.com/file/d/1kPspUt…)
Yet companies aren’t happy. Law firms have started hawking their services to the private shareholders who stand to see their shares diluted, claiming various violations of international legal rules. (cliffordchance.com/briefings/2018…)
What’s this all about? Read @henryfarrell’s interview with @goodhouses for a primer on so-called investor-state dispute settlement (ISDS) — one of the forums Clifford Chance is recommending shareholders consider for legal challenges. (washingtonpost.com/news/monkey-ca…)
Corbyn and Labour may have some moves they can make, however. They could, for instance, partner with @ewarren or another US administration to shut down investors’ access to enforcement of ISDS awards in domestic courts. (amazon.com/dp/B07BSGN1GG/)
This is why the 2020 to 2022 period could be the most important in recent Trans-Atlantic history for big structural reforms of the global economy. (time.com/5475791/2020-b…)