2 - Industrial Democracy, Market Socialism, and Stakeholder Capitalism

Summary

Chapter 2 recovers a distinct interpretation of ‘modern socialism’ that focused on diffusing power to producers, consumers, and communities. Over the 1970s and 1980s, several left-wing thinkers and politicians championed redistributing economic and social power through industrial democracy or consumer and community empowerment. These explorations were fuelled by critiques of the post-war state, trade union assertiveness, corporatist experiments, municipal socialism, and market socialism. In the 1980s, they were championed as ‘modern socialism’, mainly as a response to Margaret Thatcher’s flagship policies like popular share ownership and the ‘right to buy’ a council house. Drawing on maverick academics and Eurocommunist journalists, ambitious Labour MPs argued that a ‘modern socialism’ needed to diffuse power through schemes like employee share ownerships. They embraced socioeconomic democracy as ‘modernisation’. However, while some decentralist ideas remained influential, the popularity of diffusing economic power peaked in the late 1980s. This helped scotch subsequent attempts to make the ‘stakeholding economy’ a foundation of New Labour’s ‘modernisation’.