Whether or not “stakeholding” is an appropriate centre left strategy for a country like Britain, the debate about it produces the feeling that British politics is becoming serious. As Margaret Thatcher realised, serious politics requires simple, powerful ideas. Stakeholding is a strong candidate. It seems important, therefore, to put aside the temptation to talk about spin doctors and warm words, and to engage sympathetically with the concept.

The discussion so far-for instance in Tony Blair’s Singapore speech or in Will Hutton’s book-raises cause for concern. Labour is on the verge of power; it will govern an economy whose most fundamental traits are profoundly Anglo-Saxon: highly developed financial markets and share-based financing; de-regulated labour markets; an education and training system in which companies play little part; and a company sector in which companies have highly competitive, arm’s length relations with each other. Yet the main proposals for developing a stakeholder society are borrowed from a quite different system of advanced capitalism, notably from the more co-ordinated capitalism of northern Europe, and Germany in particular.

A central element of Labour’s idea of stakeholding is to give employees a real stake in their companies, through enhanced security, participation and skill development. This is a characteristic of large companies in northern European economies; it forms an attractive aspect of their type of capitalism (though don’t count on benefiting to the full if you’re a woman), and plays an important role in their competitiveness. But “company stakeholding” works in those economies because they have a quite different institutional framework. By contrast to the liberal market capitalism of Anglo-Saxon economies like Britain and the US, the institutional framework of northern European economies underwrites several important economic relationships: companies securing long term relations with their owners; unions and employer associations playing an important role in the de facto and often de jure regulation of labour markets; companies being closely integrated into the training system and co-operating with each other through powerful industry associations. Without this institutional framework, company stakeholding is unlikely to prosper. Thus Labour is faced with a choice: if it wants to keep company stakeholding as a central part of its strategy, it must envisage institutional changes of dramatic proportions; alternatively, it needs to develop a concept of stakeholding appropriate to an Anglo-Saxon liberal market economy.

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