The corporation is an extraordinary social institution. Endowed with a set of expansive legal privileges that enable it to structure external capital investment, produce profits and accumulate wealth, its productive capacity has created the world we live in. Yet in its current form the modern corporation is profoundly undemocratic, and acts as a driving force for inequality in the heart of our economy. Both the uneven wealth of society and the depth of crises confronting us are consequently inseparable from the corporation.
Any attempt to overcome the democratic neutering, economic inequality, and accelerating forms of planetary breakdown endemic to capitalism must therefore have a strategy for transforming the corporation. It is in this light that the importance of Labour’s Inclusive Ownership Fund – which a recent Financial Times analysis suggested would redistribute corporate wealth and spread share capital to workers worth up to £300bn over a decade – becomes clear. It is a part of a wider progressive policy agenda for transforming and democratising the corporation and therefore reshaping wealth and power in society.
Reimagining how the corporation operates requires us to go beyond the policy tools of a regulatory or redistributive state into rearranging the distribution and nature of property, governance and control rights that shape its behaviour. This is because how the corporation is owned and governed fundamentally affects how it operates and in whose interest. Today, a combination of shareholder primacy in the governance of the company, the intermediation of corporate ownership by rentier-like financial institutions, and the deep financialisation of the corporation has turned many companies into engines of wealth extraction, detached from their original purpose.
