Britain can prosper by understanding how Germany succeeds

The founder of German social democracy Eduard Bernstein was right, the movement is everything.(…..) What Labour should take from Germans is a governing ideology that understands the human nature as based on self-interest broadly conceived, an ideology in which well-being of others is a condition of our own flourishing, and in which the preservation of quality through practices of democratically organised, non-pecuniary institutions is necessary as fiscal discipline and upholding of individual rights. The prevailing paradigms cannot explain why the economy with highest level of workforce participation in its governance, the greatest degree of regulation of labourmarket entry through vocational enforcement and the most severe constraints on capital in its banking system should be most competitive in Europe, as well as its most efficient. However, an explanation of the comparative superiority of German economy should be central to Labour’s new economic offer. We are all in this together in ways George Osborne cannot begin to understand. Such a political position requires the following: a reassertion of the value of labour and the representation of workforce in corporate governance; a renewed role for vocational institutions in reproducing skill; selforganised universities run by academics on the basis of the internal goods of knowledge rather than the external goods of money or policy objectives; self-governing cities with the power to shape destiny of their citizens; the endowment of regional banks that can resist the domination of the “Big Six” in internal investment and enable access to capital in the regions where there is no nourishment to be found. A Renewal of solidarity in social security and welfare is required, that establishes solidarity, subsidiarity, status as guiding principles. Politics of mutual sacrifice is the necessary complement to that of mutual benefit. That is meaning of reciprocity. The domination of internal investment by the banks that had to be bailed out following the crash of autumn 2008 must be challenged by creation of new financial institutions and the renewal of old ones. These should be funded by using 5% of bailout money to endow new Banks of England. This would challenge the centralisation of capital, offer an alternative to payday lenders, offer tangible investment to local businesses. Jon Cruddas, in his “earning and belonging” speech in February this year, told the story of how the Northern Counties Permanent Building Society, which was rooted in north-east of England, survived depressions, growing through each, could not survive its demutualisation as Northern Rock in 1997. In maximising returns, the asset was lost, a trusted local institution was destroyed. The overwhelming lesson of the German economy is a balance of interests in corporate governance between capital and labour is as necessary as a more relational and localised banking system. Accountability is too important to be left to accountants. The only group with the expertise and an interest that could hold elites accountable and have an interest in the flourishing of the business is the workforce. This is double-edged: on the one hand, capital must negotiate with labour and share information about firms and their environments. On the other hand, workforce must commit itself to good standards of work and to the well-being of funders and consumers. The common good is a demanding category (…..)



Acerca de ignaciocovelo
Consultor Internacional


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