We love capitalism

Were trade unionists looking in the wrong place when they fought for better pay and shorter hours? T

Karl Marx famously predicted that capitalism would produce its own gravediggers. If so, they have been an awfully long time on the job. (Perhaps they knock off early.) In fact, there is no grave. Capitalism is alive and well, having triumphed on all fronts: economic, social and political. Like democracy, it has proved to be the worst way to run an economy - with the exception of all the others. Yet it seems unlikely that in a hundred years there will be any general need for the word capitalism at all. The only sixth-formers writing essays on "capitalism" or "socialism" in 2107 will be those studying history.

As a result of this total victory, the market economy has been depoliticised. If anything, it is Labour ministers who now make the case for capitalism - for productivity, competitiveness and growth - and new Conservatives who point to the "social irresponsibility" of a selection of companies. When Rover finally went under in 2005, victim of the scouring forces of global capitalism, the national response was a collective shrug. We are all, it seems, capitalists now.

But what species of capitalist do we want to be? Where markets have proved triumphant is in their ability to drive up living standards and personal choice through rising productivity. And yet, as John Maynard Keynes presciently warned in 1930, this solving of "the economic problem" still leaves mankind with his "real [and] permanent problem - how to use his freedom from pressing economic cares . . . which science and compound interest will have won for him, to live wisely and agreeably and well".

Solving this problem means rethinking the essence of each individual's relationship to the labour market. Capitalism is triumphant but complacent - to reform it, we have to go into the belly of the beast.

There are mountains of data being produced which show us what the Beatles and Aristotle instinctively knew: that higher levels of wealth and consumption have a limited, and diminishing, impact on our sense of well-being. Politicians are trading terms such as "general well-being" and "quality of life" because there is a grow- ing awareness of the costs as well as the benefits of consumer-driven growth - the malaise that the psychologist Oliver James calls "affluenza".

The prescriptions for the disease are to "simplify" our lives, consume less, address our "work-life balance" and meditate. There is even a gentle man giving out free hugs. At a policy level, higher income tax is sometimes proposed (presumably because those days of supertax in the 1970s were so euphoric), along with longer holidays and state-mandated limits on working hours. These are mostly well and good. But they skirt around the central issue (and here Marx was at his most acute): the relationship between the individual and his or her work. Purposeful, rewarding work is at the heart of a well-lived life. This is why Gordon Brown has called for "full and fulfilling" employment and why David Cameron - a decade later - supports a "modern vision of ethical work" as part of a drive towards "general well-being". There is a strong, consistent link between job satisfaction and overall happiness. Work is where economics becomes human, where the connection between the creation of wealth and cultivation of well-being is strongest.

Work is also the site at which the skills and effort of the individual are transformed into something the number-crunchers at the Office for National Statistics can measure and call GDP. Right now, in the UK at least, we are not doing too well on this score. The most important component of overall productivity today is labour productivity - in other words, what people actually do (or fail to do) at their workplace each day.

The problem that companies face is how to motivate people to "go the extra mile": to give the firm more creativity, energy or time than is required under the terms of their contract. In the management literature, this is labelled "discretionary effort". But it is much more than an issue for managers. It goes to the heart of the particular model of a market economy that is and has been in vogue for the past century or so, one that is based on people working for a firm owned by other people, to whom most additional profit flows. As the other Marx (Groucho) put it: "What makes wage slaves? Wages!"

There is a solution to both problems, a remedy that will raise levels of well-being and boost productivity. It is, in that incalculably misused phrase, a "win-win". The solution is this: for the people who work in an enterprise to have a real financial stake in its long-term performance. Firms in which the employees are also the "co-owners" are more productive, with more engaged employees. They account for no less than £20bn worth of turnover - roughly 2 per cent of the UK economy - and cover such diverse sectors as retail (John Lewis), civil engineering (Arup) and advertising (St Luke's). In the mid-1990s, Labour flirted briefly with the idea of a "stakeholder" society, then being articulated by Will Hutton, but backed off once the top brass realised that it would entail taming the capital markets. The essential insight of stakeholding was right, but the place to start is in the firm itself, not the market as a whole.

Most policy-makers view the co-ownership sector in the same way as the royal family: a good thing, slightly anachronistic . . . and a bit wet. But firms where workers not only own a real stake but also play a real role in running the firm - where the co-owners are also co-creators - are not for the soft-hearted. These are not reheated co-operatives: pay differentials tend to be lower than in comparable firms, but there is no expectation that everyone will get a same-sized slice of the pie. One of the sources of higher productivity in these "CoCo" companies is tougher peer policing: it is harder to "pull a sickie" when the co-workers who "welcome" you back will be poorer as a result. Information-sharing and innovation levels look to be higher in CoCo firms.

Latter-day pirates

The best study undertaken of relative performance suggests a 19 per cent productivity lift from co-ownership. Applied across the economy, co-ownership would make the UK the most productive nation in the world. In a survey of managers in co-owner firms, 72 per cent reported that staff worked harder than in competitor companies, and 81 per cent that they took on more responsibility. And CoCo firms should not be tarred with the brush of being an example of "corporate social responsibility". They are only as responsible or irresponsible as their owners, just like with any other firm.

CoCo enterprises should be the next-generation capitalist business model. A new organisation, the Employee Ownership Association, will start a campaign this month to raise political and public awareness. The timing is auspicious: the public limited company, until now the mainstay of capitalism, is in some danger from private equity firms (at this very moment, a ravenous group is circling Sainsbury's). It might be possible to throw a few legislative or regulatory obstacles in the path of these latter-day pirates. But the whole point of a public limited company is that its stock is publicly traded. If a private equity firm offers my pension fund a great price for its stocks in Sainsbury's, the fund might well be obliged to accept it. Most CoCo firms, however, are impregnable to outside raiders: the stock has to remain in the hands of employees. It is also easier, in such firms, to take longer-term decisions without too much fear of the impact on short-term share prices.

John Lewis is flying high, but had some years of retrenchment and reinvestment in the 1990s when its headline profit numbers were weak. "If we had been a plc, you could write a script that we would have been under severe scrutiny in those years," says the firm's personnel director, Andy Street. "But our structure allows us to operate on slightly different timescales."

As a business model co-ownership seems hard to beat. Yet if this was the end of the argument, it would be hard to get very excited. After all, productivity per se is scarcely relevant: what counts is how it is arrived at. But CoCo capitalism has other advantages, in its human engagement with work and an increased sense of citizenship that spills over into life outside work. For one thing, it seems that co-owned firms are less likely to award vast salaries to their chief executives, and may act as a brake on runaway wage inequality.

John Stuart Mill, a passionate advocate for co-ownership, argued in the 19th century that the benefits included "the healing of the standing feud between capital and labour; the transformation of human life, from a conflict of classes struggling for opposite interests, to a friendly riv alry in the pursuit of a common good to all; the elevation of the dignity of labour; a new sense of security and independence in the labouring class; and the conversion of each human being's daily occupation into a school of the social sympathies and the practical intelligence".

Given that the "feud" between capital and labour is the raison d'être of the trade unions, co-ownership is not necessarily good news for them. Even in the "corporatist", German-style version of capitalism, the underlying assumption is that labour and capital have differing interests, which have to be balanced peaceably and fairly. Under co-ownership, the distinction implodes. And it was certainly Mill's view that giving "the whole body of workpeople . . . a direct interest" in the profits of the enterprise would bring about "the true euthanasia of Trades Unionism".

Yet a move towards a different sort of capitalism poses challenges to political orthodoxy, too. Despite capitalism's victory, there is a resistance to looking with a clear eye at its flaws; there is still a timidity about questioning the current version of capitalism for fear of being branded a barricade-building red. But surely, it must now be possible to have a conversation about the kind of economy we want: after all, young people born after the fall of the Berlin Wall are reaching voting age.

There are certain policies that might help with the cultivation of co-ownership, from changes in tax treatment to better data collection and the provision of advice. However, the argument has to be won first. For the left, this requires a significant shift in focus. The primary locus of political attention in the past half-century has been on the state and its relationship to the individual. Taxation, regulation, redistribution and public services are the staple diet of Labour types. The fruits of this philosophy, especially the welfare state, are obvious and real, but the party has to start living up to its name again.

The central social and economic issue of our time is the relationship of individuals not to the state, but to the organisation for which they labour. Co-ownership could be seen, using the old labels, as socialism without the state, yet it could equally be seen as capitalism with more capitalists. The point is that it doesn't matter. What should concern us now is whether existing structures and cultures are enabling us to live "wisely, agreeably and well" and, if not, what we might do about it.

CoCo Companies is published by the Employee Ownership Association (http://www.employeeownership.co.uk)

This article first appeared in the 19 February 2007 issue of the New Statesman, Iran - Ready to attack

Getty
Show Hide image

As bad as stealing bacon – why did the Victorians treat acid attacks so leniently?

In an era of executions and transportation, 19th century courts were surprisingly laissez-faire about acid attacks. 

"We are rather anxious to see the punishment of death rescinded in all cases except that of Murder," stated the Glasgow publication, The Loyal Reformers’ Gazette, in 1831. But it did not share this opinion when it came to Hugh Kennedy.

Previously of “irreproachable character", Kennedy fell out with a fellow servant and decided to take his revenge by pouring acid on the man while he was asleep. “He awoke in agony, one of his eyes being literally burned out,” The Gazette reported.

Lamenting the rise in acid attacks, the otherwise progressive journal recommended “the severest punishment” for Kennedy:

“We would have their arms cut off by the shoulders, and, in that state, send them to roam as outcasts from society without the power of throwing vitriol again."

More than 180 years later, there are echoes of this sentiment in the home secretary’s response to a spate of acid attacks in London. “I quite understand when victims say they feel the perpetrators themselves should have a life sentence,” Amber Rudd told Sky News. She warned attackers would feel “the full force of the law”.

Acid attacks leave the victims permanently disfigured, and often blinded. Surprisingly, though, the kind of hardline punishment advocated by The Gazette was actually highly unusual, according to Dr Katherine Watson, a lecturer in the history of medicine at Oxford Brookes University. Hugh Kennedy was in fact the only person hung for an acid attack.

“If you look at the cases that made it to court, you see there is a huge amount of sympathy for the perpetrators,” she says.

"You want your victim to suffer but you don’t want them to die”

Acid attacks emerged with the industrial revolution in Britain. From the late 1700s, acid was needed to bleach cotton and prevent metals from rusting, and as a result became widely available.

At first, acid was a weapon of insurrection. “Vitriol throwing (that is, the throwing of corrosive substances like sulphuric acid) was a big problem in 1820s Glasgow trade disputes,” says Shane Ewen, an urban historian at Leeds Beckett University. Other cases involved revenge attacks on landlords and employers.

Faced with this anarchic threat, the authorities struck back. Scotland introduced a strict law against acid attacks in the 1820s, while the 1861 Offences Against the Person Act s.29 placed provided for a maximum sentence of life in England and Wales.

In reality, though, acid attackers could expect to receive far more lenient sentences. Why?

“They had sad stories,” says Watson, a leading historian of acid attacks. “Although they had done something terrible, the journalists and juries could empathise with them.”

Acid attacks were seen as expressions of revenge, even glorified as crimes of passion. As Watson puts it: “The point is you want your victim to suffer but you don’t want them to die.”

Although today, around the world, acid attacks are associated with violence against women, both genders used acid as a weapon in 19th century and early 20th century Britain. Acid crept into popular culture. Arthur Conan Doyle’s 1924 Sherlock Holmes story, The Adventure of the Illustrious Client, featured a mistress throwing vitriol in her former lover’s face. In Brighton Rock, Graham Greene’s 1938 novel, the gangster Pinkie attacks his female nemesis Ida Arnold with his vial of acid, before falling to his death.

Lucy Williams, the author of Wayward Women: Female Offending in Victorian England, agrees that Victorians took a lenient attitude to acid attacks. “Historically speaking sentences for acid attacks were quite low,” she says. “Serious terms of imprisonment would only usually be given if the injury caused permanent blindness, death, or was life-threatening.

“If this was not the case, a defendant might spend just a few months in prison - sometimes even less.”

Courts would weigh up factors including the gender of the attacker and victim, and the strength of the substance.

But there was another factor, far removed from compassion “Many of the sentences that we would now consider extremely lenient were a product of a judicial system that valued property over people,” says Williams. It was quite common for violent offences to receive just a few weeks or months in prison.

One case Williams has researched is that of the 28 year old Sarah Newman, who threw sulphuric acid at Cornelius Mahoney, and was tried for the “intent to burn and disfigure him” at the Old Bailey in 1883. The attacker and victim had been living together, and had three children together, but Mahoney had abandoned Newman to marry another woman.

Although Mahoney lost the sight in his right eye, his attacker received just 12 months imprisonment with hard labour.

Two other cases, uncovered by Ancestry.co.uk, illustrate the Victorian attitude to people and property. Mary Morrison, a servant in her 40s, threw acid in the face of her estranged husband after he didn’t give her a weekly allowance. The attack disfigured and blinded him.

In 1883, Morrison was jailed for five years, but released after two and a half. The same year, Dorcas Snell, also in her 40s, received a very similar sentence – for stealing a piece of bacon.

"People just had more options"

If Victorian attitudes become clearer with research, why acid attacks receded in the 20th century remains something of a mystery.

“My theory is people just had more options,” says Watson. With manufacturing on the wane, it became a little harder to get hold of corrosive fluid. But more importantly, the underlying motivation for acid attacks was disappearing. “Women can just walk away from relationships, they can get divorced, get a job. And maybe men don’t feel the same shame if women leave.”

Acid attacks did not disappear completely, though. Yardie gangs – mainly comprised of Jamaican immigrants – used acid as a weapon in the 1960s. Other gangs may have used it too, against victims who would rather suffer in silence than reveal themselves to the police.

Meanwhile, in 1967, the first acid attacks in Bangladesh and India were recorded. This would be the start of a disturbing, misogynistic trend of attacks across Asia. “Acid attacks, like other forms of violence against women, are not random or natural phenomena,” Professor Yakin Ertürk, the UN’s special rapporteur on violence against women, wrote in 2011. “Rather, they are social phenomena deeply embedded in a gender order that has historically privileged patriarchal control over women and justified the use of violence to ‘keep women in their places’.”

The re-emergence of acid attacks in Britain has been interpreted by some as another example of multiculturalism gone wrong. “The acid attacks of London’s Muslim no-go zones”, declared the right-wing, US-based Front Page magazine.

In fact, descriptions of the recent attackers include white men, and black and minority ethnic groups are disproportionately among the victims. A protest by delivery drivers against acid attacks was led by Asian men. 

Jaf Shah, from the Acid Survivors Trust International, suspects the current spate of attacks in fact originates from gang-related warfare that has in turn inspired copycat attacks. “In the UK because of the number of men attacked, it goes against the global pattern,” he says. “It’s complicated by multiple motivations behind these attacks.” Unlike other weapons in the UK, acid is easy to obtain and carry, while acid attacks are prosecuted under the non-specific category of grievous bodily harm. 

Among the recent victims is a British Muslim businessman from Luton, who says he was attacked by a bald white man, two teenage boys in east London, a delivery man, also in east London, who had his moped stolen at the same time, and a man in Leicester whose girlfriend – in a move Hugh Kennedy would recognise – poured acid on him while he slept.

Shah believes the current anxiety about acid attacks stems from the fact the general public is being attacked, rather than simply other members of gangs. Perhaps, also, it relates to the fact that, thanks to advances in our understanding of trauma since the Victorian period, 21st century lawmakers are less interested in the theft of a moped than the lifetime of scars left on the driver who was attacked.

With Rudd promising a crackdown, the penalties for acid throwing are only likely to get harsher. “Many survivors feel the sentencing is too lenient,” Shah says. Still, the rise and fall and rise again of acid throwing in the UK suggests the best way to eradicate the crime may lie outside the courts.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

This article first appeared in the 19 February 2007 issue of the New Statesman, Iran - Ready to attack