With the demise of communism and the world's stock markets ever prone to periodic wobbles, there has never been a more opportune time for the purveyors of alternatives to the two great "C's" - communism and capitalism, those rival economic theories whose battle for world supremacy has left such deep scars across the face of the 20th century.
Jeff Gates's The Ownership Solution purports to be such an alternative. With a foreword by Swiss industrialist Stephan Schidheiny stating baldly "This book may save capitalism" and pre-publication endorsements from three dozen luminaries - including former New York governor Mario Cuomo, one-time Jamaican prime minister Michael Manley, and Dick Gephardt, Democratic leader of the US House of Representatives, not to mention, from the UK, Madsen Pirie of the Adam Smith Institute and Geoff Mulgan, until recently director of Demos and now in Downing Street - there can be no doubt that the author of The Ownership Solution can teach the world a lot about hype.
But what of his economics? Gates's central thesis is that capitalism can be saved through the creation of more capitalists. Far from concentrating power and wealth in the hands of the few, as the traditional free market has done, or giving the state responsibility for running the means of production and distribution, as communism did, what is needed is to spread ownership more widely.
There is not a lot new in that. You can hear the "hear, hears" echoing down the centuries and across the continents from all but the most crackpot theoreticians. The devil is, of course, in the detail and not least the application.
Gates's preferred method of redistribution is the employee share ownership scheme - or Esop, and variations thereon - spreading ownership to communities and to consumers. In Britain, unions have had mixed experiences of Esops. On average, British examples have a life of three to five years before being replaced by more traditional forms of ownership. Here 1 per cent of buy-outs take the form of Esops, though in the United States they account for 20 per cent. There is scope for improving the British tax regime to favour Esops, as the Chancellor acknowledged in his budget. The Trades Union Congress is also drawing on the experience of unions to make a more informed judgement about the scope for Esops. We would not want them to be the last resort for a failing business, as some of the worker co-ops of the 1970s turned out to be, nor just a transitional stage. We see them as a useful innovation, and one of a number of instruments needed to broaden corporate governance and spread economic responsibility. Overall our view is favourable, with just a dash of scepticism.
But that is just our experience. Gates reaches far and wide to demonstrate the possibilities for change.
He is at his most interesting in giving details of US examples of successful schemes - such as the transformation of United Airlines. And he is not afraid to expose the weaknesses as well as the strengths of such examples. His analysis of the Eastern European experience of seeking to move from a communist system to one where ownership is spread more widely is also valuable and incisive. He also finds space to quote the BBC and the US football team, the Green Bay Packers, as alternatives to the traditional forms of ownership.
Gates is at his least persuasive when reaching deep into history. Who can really believe that in pre-capitalist days economic decisions were taken by groups of wise elders in the interests of the whole community, as he asserts in the introduction?
The section on reinventing labour unions is challenging. There is much of interest for the British trade unions in the description of the changes made in the US under the leadership of John Sweeney. Gates's urging of unions to provide a wider range of services for members of the new, more flexible labour market is an argument that needs to be addressed here as well as in the US.
This is a book that contains echoes of Charles Handy and Will Hutton. There are phrases that capture the imagination. Many of us have railed against the short-termism of the markets and advocated the adoption of policies that reward organisations that plan long term. But few would capture all that in the phrase "Capitalism as if our children mattered". And what could be more concise than the call to put the "own" back into ownership?
Gates's scope is wide. But he is probably too US-oriented for most British tastes. And there are some surprising gaps in his analysis. In essence, the approach he is adopting is that of the cooperative - yet there is next to nothing in this book about the cooperative movement, despite its long history running alongside but never matching either capitalism or communism, and despite its record in developed and developing countries.
Gates has extensive practical experience in the US government and in assisting organisations and countries. He is a practitioner as well as a theoretician. He has produced an interesting and useful book, though the fact that it was written shortly before the Far Eastern economies started to implode gives it a slightly dated feel. But despite the praise for the book from across the political spectrum, or perhaps (to be cynical) because the praise is so widespread, I cannot see this publication changing the world. These are pieces of a jigsaw rather than the whole picture. It falls short of what physicists call a theory of everything - which would require more courage, skill and breadth of knowledge than the author shows. If this book saves capitalism, capitalism is in a worse state than we thought. But if it helps to broaden and inform the debate about how best to run our economies and bring power and ownership closer to the people, it will deserve all the pre-publication praise that it has received.
John Monks is general secretary, Trades Union Congress.
The Ownership Solution: Toward a Stakeholder Society for the 21st Century
Author - Jeff Gates
ISBN - 0 713 99266 2
Publisher - Penguin
Price - £20.00
Pages - 388