The stakeholder debate conflates two distinct problems: competitiveness and social exclusion. The training industry does the same. The result is a feeble qualification system which helps neither mployers nor employeesby Ronald Dore / June 20, 1996 / Leave a comment
Most people who have decided to vote for Tony Blair in the expectation that his lot will have marginally more decent instincts than the present lot would agree that Britain has two big problems. First, a competitiveness problem; second, a social polarisation/poverty/social exclusion problem. They would probably also agree that solving one is not going to solve the other.
“Trickle down” may have some relevance in the fast growing economies of agrarian Asia, but in an advanced industrial society such as Britain, it means little more than sending the day’s leftover sandwiches to the soup kitchens.
The fact that solutions to the competitiveness and social cohesion problems can be comfortably accommodated under the same stakeholder slogan does not mean that the two are complementary, or even compatible. The “stakeholders’ firm” certainly has advantages over the “shareholders’ firm.” If you make firms a bit more like communities-by treating core employees as full members of the firm, guaranteeing stability of employment, offering profit-sharing schemes and so on-you can gain commitment, involvement and flexibility. But that usually involves a polarisation between a privileged core (which the wise employer keeps as restricted as possible) and a dispensable “periphery” of part time, temporary and contract workers whose flexibility is still of the easy-hire-easy-fire kind.
Fraternity can all too easily begin, and end, in the home firm. Nowhere are firms more like communities than in Japan. There, even the unions are fragmented single firm organisations; this encourages “enterprise egotism” to a point which precludes “insiders'” concern for “outsiders.” By contrast, German unions do show broader social concerns (as in the proposed Alliance for Jobs, which would trade off wage increases for employment). David Soskice, writing in Prospect (April 1996), suggested that this feature of German unions was part of a broader sense of social cohesion, which manifests itself in the strength of chambers of commerce and employers’ associations, in co-operation in the apprentice training system and so on. He suggested that this sort of social cohesion was a necessary precondition for any kind of Will Huttonish stakeholder firm; and that it was ruled out of practical politics because Britain is incapable of developing such national institutions.
It is not obvious that Soskice has identified his chicken and egg correctly. A change in company law which acknowledges the claims of other stakeholders-enjoining co-operation and compromise rather than individualistic unilateralism in the enterprise-could be the place for…