Over the last twenty years a number of governments have sought to reconcile the competing claims of capital and labour by encouraging employees to acquire ownership of capital in lieu of wage or salary increases. In the post-Keynesian world of stagflation, this has often been a trade-off between consumption against savings and investment in which wages are ‘deferred’ for a share in capital. The countries where this has taken place include Sweden, Australia, the United Kingdom and, surprisingly, the United States. From Scandinavian wage-earner funds to Anglo-American pension funds, ownership of corporate equity through share markets has, more or less successfully, been transferred from personal and corporate owners of capital to groups of employees organized around the workplace. While these financial forms were by-products of macroeconomic policy, they have also been represented as contributions to social welfare.

There is now a range of social ownership models which involve significant transfers of capital and steps towards new types of ‘common ownership’. Communism may have collapsed but social ownership has inexorably, if often surreptitiously, been on the increase. Many governments have, as a matter of policy, shifted from ‘pay-as-you-go’ pension schemes to funded arrangements. Often, as in the uk, this has also involved a shift from public to private provision, though it is possible for a publicly-run scheme to involve the accumulation of a fund just as it is possible for private schemes, as in France, to be run on a ‘pay-as-you-go’ basis. By 1994 the world-wide accumulated assets of pension funds totalled $10,000 billion, equivalent to the market value of all the companies quoted on the world’s three largest stock markets. While the great majority of these funds are held by us and uk funds, there are also significant holdings in Japan, the Netherlands, Ireland, Argentina, Peru, Columbia and a number of other South American states. The two largest pension funds in the world, tiaa-cref (the Teachers’ Insurance and Annuity Association—College Retirement Equities Fund) and calpers (California Public Employees’ Retirement System), both in the us, have assets of $140 billion and $100 billion respectively. If investment regulations allowed, either could buy any American company on the us stock markets. The largest pension fund in the uk is the jointly managed Post Office and British Telecom Fund with assets of over $35 billion. Again, in termsof size, it could buy any uk quoted company, including BritishTelecom itself. Many other pension funds are larger than their sponsoring organization.

But the ‘policy-holders’ in these schemes generally have little or no control over their functioning, as we shall see when we look more closely at the operation of financial markets and the global power of financial institutions. In the uk nearly 80 per cent of all pension fund assets are managed by banks and similar institutions. This control is very concentrated: in 1995 the top five investment managers controlled nearly two-thirds of all uk pension fund assets. While regulations and legal judgements governing the use of these funds have required that they be invested using the most narrow criteria, this has manifestly failed to prevent abuse or under-performance. Despite the well-publicized problems of private pension provision, the potential of the ‘unseen revolution’ in social ownership has not been much considered in the preparation of the Left’s alternative economic and social policies. The inclination of New Labour is to defer to financial markets and ‘professional fund managers’ with no real understanding of the implications of the current political economy. While there are significant opportunities here for a socialization of the accumulation process, this is only possible if it is recognized that the move towards more dispersed share-ownership has aggravated a number of the characteristic vices of the Anglo-American stock markets. The big funds are notorious for their short-term investment practices, spurring unproductive and costly take-over battles, and prioritizing short-term dividend payments at the expense of broader economic and welfare considerations. In both Britain and the United States a majority of employees is now covered by privately funded schemes, a development linked to the privatization of welfare and the decay of public provision. Since some of these schemes are poorly-devised or under-performing, and in any case, since many are not covered by them at all, the end result is to aggravate inequality and insecurity.

We should not be surprised that social budget cuts, the spread of privatization and the attempt to dump long-accepted commitments has provoked strikes in France, Greece and Italy. There has also been widespread concern at the frequent misappropriation of funds, which has dogged the new ‘social ownership’ sector, whether pension schemes, Savings & Loans or housing associations. The most notorious case in Britain recently has been Robert Maxwell’s purloining of some £400 million from his employees’ pension fund. This led to the 1995 Pensions Act, to protect such funds from such abuse—the tuc, however, points out that that the new Act does not offer sufficient protection nor any element of democratic control.

So what can we make of these hugely important forms of mediated ownership at a time when New Labour has rejected state ownership of industry and embraced ‘regulated’ capitalism? Should the new mass of policy-holders reconcile themselves to an entirely passive role? Should trade unionists leave pension problems to the financial experts? Is there a ‘third way’ which could use a new concept of property—neither public nor private—for socially progressive ends? And, if so, does this render obsolete public provision and state enterprise?