Towards a Less Irrelevant Socialism: Stakeholding as a ’Reform‘ of the Capitalist Economy
| Author | David Campbell |
| DOI | http://doi.org/10.1111/1467-6478.00037 |
| Date | 01 March 1997 |
| Published date | 01 March 1997 |
In a recent paper entitled ‘Corporate Governance, Stakeholding, and the
Company: Towards a Less Degenerate Capitalism?’,1Paddy Ireland has
authoritatively stated the marxist criticism of the concept of stakeholding.
For the purposes of this paper, I take socialism to be the making of
fundamental choices about allocations of goods by a consciously political
process rather than by ‘the invisible hand’2of the capitalist market. I take
‘marxism’ to be the claim that it is basically ‘economic’ developments within
the capitalist mode of production that will lead to socialism. It is obvious
that on these definitions there is a very strong connection between socialism
and marxism such that the latter is a particular grounding of the former
which turns on the identification of economic developments within, rather
than on the ethical critique of, capitalism. From Mr. Ireland’s previous work
and from personal conversation, I believe that I am right to say that he is
both a socialist and a marxist in these senses. I share Mr. Ireland’s socialism
and I am so wholly sympathetic to the argument of
Das Kapital that I would
be a marxist were it not that I think that the above definition of marxism
works by reference to a defining error. I want here to reject Mr. Ireland’s
marxist criticism of stakeholding as a specific example of the general rejection
of marxism as a failed political project which I have set out in my recent
The Failure of Marxism.3I hope in this way to say something of interest
about both what is good about stakeholding and what is bad about marxism.
I should, perhaps, begin by clearing up one possible confusion. In the
form in which it would appear to be adopted by the Labour Party,
stakeholding has many objectionable features which arguably are not
© Blackwell Publishers Ltd 1997, 108 Cowley Road, Oxford OX4 1JF, UK and 238 Main Street, Cambridge, MA 02142, USA
* School of Financial Studies and Law, Sheffield Hallam University, City
Campus, Pond Street, Sheffield S1 1WB, England
This paper was written whilst I was a Visiting Scholar at the National Centre for Corporate
Law and Policy Research and the School of Law of the University of Canberra. An earlier
version of this paper was given to the School of Law, Macquarie University. I should like to
thank these Universities for their hospitality.
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JOURNAL OF LAW AND SOCIETY
VOLUME 24, NUMBER 1, MARCH 1997
ISSN: 0263–323X, pp. 65–84
Towards a Less Irrelevant Socialism: Stakeholding as a
‘Reform’ of the Capitalist Economy
DAVID CAMPBELL*
necessary to the concept as such, such as what seems to be the mere
‘soundbite’ idea of citizens being ‘stakeholders’ in ‘society’,4and I will ignore
these. Mr. Ireland rightly keeps his discussion of such features to a minimum
(p. 287), for his criticism of stakeholding works at a much deeper level both
of the analysis of the concept itself and of its relationship to socialism.
Though the revised Clause IV of its Constitution still commits the ‘New
Labour Party’ to being ‘a democratic socialist party,’ it is not a socialist
party in the sense I have given the term, though the immanent critique of
the ‘redistributive market liberalism’5to which that party presently seems
committed would, in my opinion, lead to that concept being recognized
either as untenable or as a form of socialism. However, it appears that some,
perhaps most, of New Labour’s leading officials do not even recognize what
is at issue in choosing whether to be a socialist in the sense I have given the
term. Accordingly, whatever acute problems of political tactics the adoption
of stakeholding by New Labour undoubtedly pose to socialists, the socialist
significance of the concept of stakeholding cannot entirely be assessed by
reference to stakeholding as presently adopted by that party.
I wish to direct my comments at what I take to be the core components
of the concept of stakeholding as such, in order to rebut the conclusion
which Mr. Ireland draws from his criticism: that ‘stakeholding will do little’
because it fails to address ‘the question of the growing dominance of material
and social life by the capitalist market and its imperatives’ (p. 315). This
very powerfully sums up the marxist objection to stakeholding. And, indeed,
the core of stakeholding is an attempt to remove from centre stage the bluntly
economic imperatives of the capitalist market. Reflection on my definition
of socialism will, however, lead one to conclude that I take it that this is
not an outcome socialists should wish to oppose. I want to argue, indeed,
that Mr. Ireland draws quite the opposite conclusion about stakeholding to
the one socialists should draw. There is no ‘growing dominance . . . by the
capitalist market’ and it is one virtue of stakeholding that it makes us
confront this, the central feature of the world capitalist economy today.
However, such an avoidance of the recognition of the weaknesses of the
capitalist market is a central feature of the marxist socialism Mr. Ireland
authoritatively represents, and is the main reason for its failure as a political
programme.
MR. IRELAND’S CRITICISM OF STAKEHOLDING
I take the core of stakeholding to be the governance of private corporations
according to a range of politically agreed values – stakes – in addition to
the (itself presently politically agreed) capitalist economic value of providing
a return to the owners of equity6in those corporations. Equity holding
thereby is removed from its exclusive sovereignty over the governance of
the corporation and reduced to being but one of a plurality of stakes having
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© Blackwell Publishers Ltd 1997
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