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‘Responsible’ Capitalism

25 January 2012

David Cameron’s recent speech on building a fairer economy is the latest attempt by a political leader to seize the initiative on ‘responsible’ capitalism. Like Nick Clegg’s efforts earlier in the week, his plan has suffered a mixed press. But what is the historical significance of his actions?This post offers a brief analysis to answer the questions raised on January 20th .

Cameron has certainly made the case for the increased use of cooperatives before. In 2007, he famously launched a plan for more employee stakeholding at Battersea Power Station (a speech which tied the idea into that of the Big Society). The theme was returned to briefly in 2010. With a Bill now promised – and with Labour seeking to draw their own political capital from the theme of ‘responsibility’ – it is likely to become increasingly prevalent through 2012.

But to what extent can Cameron claim that this is drawing on a  historical legacy? The January 20th speech invoked nineteenth century social responsibility, a looser ‘popular capitalism’ and Thatcherite emphasis on ‘ownership’. But Cameron’s vision is arguably closer to that of two other former Prime Ministers – Harold Macmillan and Anthony Eden – and a widely forgotten 1920s MP called Noel Skelton.

In 1924 Skelton published a collection of early essays under the title ‘Constructive Conservatism’. Written against a turbulent background that would culminate in the 1926 General Strike, his pamphlet called for a greater devolution of ownership and coined the phrase ‘property-owning democracy’. For Skelton, to own a stake in one’s society would encourage greater cooperation and was the only way of avoiding calls for socialism.

Two decades later, Skelton’s ideas would reemerge as Eden invoked the concept of a ‘property-owning democracy’. During the 1950s, this would become synonymous with a house building programme spearheaded by Macmillan. However, like Skelton, Eden’s earliest speeches drew upon the concept in more abstract terms.

Macmillan, too, had drawn on the idea of holding a societal stake in his famous 1938 text ‘The Middle Way’ – and even earlier alongside Robert Boothby in ‘Industry and the State’ (the relationship between Macmillan and Boothby is a story for another post…). Macmillan’s ideas, Skelton’s concept and Eden’s rhetoric found their way into Conservative policy when the party published its ‘Industrial Charter in 1947’.

Like Cameron, the ‘Charter’ was conciliatory and reformist. And, like Cameron, it urged for a new ‘responsible’ capitalism.

To find out whether it really does provide a model that can be applied to today, you’ll have to stay posted.

For another perspective see Matthew Francis’ analysis on Notts Politics


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