Independent View: Cable should revisit Mill’s Principles of Political Economy

John Stuart MillCable should revisit Mill’s Principles of Political Economy

With new analysis this week showing as many as 50,000 women lose their jobs each year while taking time off to have a baby, insecurity appears to be the new normal for British workers.

From mothers losing out whilst on maternity leave, to the rocketing growth of zero hour contracts on which as many as 1m people are now employed, millions of people face instability at work. These bad employment practices combined with the on-going squeeze on wages means that over half of people say they struggle to keep up with bills. As conference approaches, Vince Cable would do well to consider these issues as matters of pressing importance.

The findings of the comprehensive 2012 Skills and Employment Survey, published early this year, confirm the scale of the problem.  It found that employees are feeling more insecure, fearful and stressed at work than at any time in the past 20 years.

Workplaces structured by patterns of domination, hierarchy and managerial prerogative run counter to the ideals of an inclusive, generous liberalism, and leave millions of workers marginalised, lacking autonomy and financial security.

However, these detrimental outcomes don’t occur by chance. They are the negative consequences of the dominant and defective UK business model, which was critically exposed in the financial crash as bad for the long-term health of companies, their employees and the UK taxpayer.

Fortunately, there is a successful alternative to that model that better balances the needs of employees, owners and management by aligning their interests: shared capitalism. Workforces where there is significant employee ownership or involvement in the running of the company have higher rates of satisfaction, higher rates of job security and greater commitment to their company.

Nick Clegg, in his “John Lewis” economy speech in January 2012, took a step in the right direction.  However, the Government can do more. IPPR’s recent Power and Profit Sharing report shows the Government has a wide range of options to advance the shared capitalism agenda.  A few examples include strengthening and expanding consultation rights, restoring the tax advantage to employee benefit trusts, and looking at how to incentivise profit-sharing on a much wider scale.

This agenda should be a natural fit for the Liberal Democrats.  After all, John Stuart Mill was one of the original champions of the idea, writing in Principles of Political Economy:

“In this or some such mode, the existing accumulations of capital might honestly, and by a kind of spontaneous process, become in the end the joint property of all who participate in their productive employment: a transformation which, thus effected…would be the nearest approach to social justice, and the most beneficial ordering of industrial affairs for the universal good, which it is possible at present to foresee.”

We can still foresee the powerful effects that shared capitalism could achieve for companies and employees alike; it is now time to act and make that vision a common reality.

* Mathew Lawrence is a Research Fellow at IPPR

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This entry was posted in Op-eds and The Independent View.


  • Completely agree with the article. It’s definitely time to reform our form capitalism to allow women with children feel more confident that their positions are secure. The coalition government and Vince Cable need to address this issue and it’s quite tragic that as developed as we are as a nation, this issue still persists. With a liberal democrat as the current business secretary, I expected more to be done about this problem by now.

  • If only. Not going to happen with the Orange bookers though.

  • jenny barnes 30th Aug '13 - 5:09pm

    Reform capitalism? Minimum / citizens wage would be a good start, and levels of tax such that we have a lot more equality. We need carers, cleaners, binnies etc just as much as MPs and forex traders, maybe more. But hoping for reform with a few fairly cosmetic changes is like trying to make “an alligator let loose a hog” Tough regulation, which doesn’t cave in at the first whiff of ” we can all go to China you know” is the only way to do it. I don’t see the neo-liberal leadership doing that.

  • @ Dave
    “Not going to happen with the Orange bookers though.”

    That’s a really negative kind of approach. Why not? There’s nothing here that any of the Orange Book writers would, or at least should, object to.

  • Simon McGrath 30th Aug '13 - 9:10pm

    @jenny – the tax paid by the Forex dealers pays for the carers etc. So you need both.

  • With profit sharing, it depends how it works. Let’s say me and 4 other young lads set up an IT business together and we each have a 20 percent share. Things go well and we have a lot of work on, so we consider getting a 6th person. Now, it seems to me that if we have to cut that person into a share of the profits (effectively a share of the work we have already done up to this point and a share of what we own up to this point) then we would be a lot more reluctant to get someone than we would be if we were able to offer him/her a straight money for work deal (which is what most of the applicants would probably prefer).

  • Profit sharing in a big company

  • David Evershed 2nd Sep '13 - 3:49pm

    Mathew Lawrence is implying that people who are not taking time off to have a baby should be made redundant in preference to those taking time off to have a baby. That is clearly unfair and contrary to Lib Dem fairness principles.

    In general, Lib Dem policy should be to create the most jobs for the most people. This means providing a good environment for businesses to prosper and not loading them with extra costs of government responsibilities. It also means the government should encourage jobs to be filled on merit and not by gender or race quota.

  • Jeremy Davis 2nd Sep '13 - 4:29pm

    This seems to get to the heart of my worries about the Liberal Democrats. The emphasis of those leading the party seems to be on ensuring economic prosperity and the consequent well-being of the people. Perhaps the Greens may disagree that is close to motherhood and apple pie, but the Tories and the Labour Party claim the same. What should distinguish Lib Dems is a willingness to look to the immediate and future benefits of people having more control over the own lives, including where they spend most of the waking hours and expend most of their efforts – at work!

  • @David Evershed

    The root of discrimination against child-bearing women and women of child-bearing age is successive governments attempting to use business to do social policy on the cheap. The tax system should be used to spread the costs of maternity leave among all business.

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