Corbyn and Labour want to end shareholder primacy — what’s that mean?

In the UK, Jeremy Corbyn is proposing a major overhaul of corporate governance.

His plan? Allocate 10 percent of ownership and control of private companies to the workers that work there.

In @monkeycageblog @washingtonpost, @lenorepalladino and I dive in (washingtonpost.com/politics/2019/…)

The idea grows out of proposals percolating in Labour Party circles for a while to ditch the ideology of so-called “shareholder primacy,” which puts the interests of owners of stock ahead of other stakeholders, like consumers, workers, and communities. (common-wealth.co.uk/Democratic-own…)

This isn’t nutty. The US economy, for instance, performed better when shareholders faced legal and cultural constraints from hoarding all the wealth. (newyorker.com/business/curre…)

Economists like @rodrikdani @natalyanaqvi @MazzucatoM @stephanygj @gabriel_zucman and others see this as a welcome break from decades of austerity and shareholder-centric policies. (drive.google.com/file/d/1kPspUt…)

Yet companies aren’t happy. Law firms have started hawking their services to the private shareholders who stand to see their shares diluted, claiming various violations of international legal rules. (cliffordchance.com/briefings/2018…)

What’s this all about? Read @henryfarrell’s interview with @goodhouses for a primer on so-called investor-state dispute settlement (ISDS) — one of the forums Clifford Chance is recommending shareholders consider for legal challenges. (washingtonpost.com/news/monkey-ca…)

Corbyn and Labour may have some moves they can make, however. They could, for instance, partner with @ewarren or another US administration to shut down investors’ access to enforcement of ISDS awards in domestic courts. (amazon.com/dp/B07BSGN1GG/)

This is why the 2020 to 2022 period could be the most important in recent Trans-Atlantic history for big structural reforms of the global economy. (time.com/5475791/2020-b…)