It is the central proposition of the revisionist, or Croslandite, left (I refuse to call it the ‘radical’ left) that capitalism can now be managed without further major steps towards social ownerprivate industry is today largely controlled by technical managers who have other interests and motives than maximising profits and can the more readily be influenced, therefore, to follow these other, more social, interests, submitting themselves to higher rates of taxation, discriminatory controls etc. Any challenge to this basic assumption may expect to be sharply resisted by these ‘radicals’ of the left.

The assumption was in fact challenged by the series of studies, “based on some slender pieces of research,” which appeared as articles on ‘The Insiders’ and ‘The Controllers’ in Universities and Left Review between 1957 and 1959. No one should therefore be surprised at Crosland’s come-back on this subject five years later in his new book, The Conservative Enemy. In this the reader will find a whole chapter, two appendices and innumerable footnotes devoted to our efforts. Crosland relies for his evidence on showing some apparent contradictions in the ULR articles and on the study of Ownership, Control and Success of Large Companies by Professor Sargant Florence, which was published in 1961, and which revises in important respects his earlier work on which the ULR studies were in part based.

This study according to Crosland, demonstrates conclusively first, the increasing divorce between ownership of shares and control over policy in private industry and secondly the subsequent controlling position of full-time industrial managers (p.69 ff.). Before considering Sargant Florence’s work it is necessary to repeat briefly, the thesis of the ULR articles, or at least those on ‘The Controllers’ for which I was wholly responsible. This was

I shall take Crosland’s critique of these nine points in turn; page references in brackets refer to pages in Crosland’s book.

1. Crosland quotes Sargant Florence to show that in only one-third of 98 top companies in 1951 could the larger share-holders be said to dominate the companies. It is of great significance, however, to note how Professor Florence selected these 98 companies. As Crosland himself conceded (p.71) they exclude all steel, shipping and ship-building and brewing companies, as well as all private companies like Pilkington, Ferranti and David Brown. They also exclude, which he does not mention, all companies operating mainly overseas or with H.Q. outside London. This means among others Shell, B.P., Esso, The Distillers. There is no doubt that if all these were added the proportion of owner-control, on the Professor’s definition, would be much higher.

Crosland, however, believes that all this is offset by the fact that the third of the companies that are owner-controlled are not really very important in terms of economic power, although they include A.E.I., Ford, Bristol Aeroplane and Crompton Parkinson. The companies excluded, and especially the steel and oil companies, are of course of dominant importance and are largely owner-controlled. Sargant Florence’s test, moreover, of dominant shareholding lets through the net, as Crosland concedes, Sir Isaac Wolfson’s Great Universal Stores and the Salmon and Gluckstein family firm J. Lyons, and several others that may fairly surely be said to be owner-controlled.

What is more important, Professor Penrose has argued (Royal Statistical Society Journal, 1946) that a determined minority with only 6% of shareholding (much less than Sargant Florence requires) can do what it will nearly all the time, in view of the unlikelihood of the other shareholders having a common policy. Sargant Florence has undoubtedly shown in his latest book that there was between 1936 and 1951 a reduction in the concentration of share ownership in large companies. This is not surprising in view of the growth in the capital of these companies and the increased number of shareholders. The Professor does not claim to have shown that control cannot still be exercised with a smaller share of the total capital. Indeed he himself quotes Prof. Penrose’s argument to this effect.