16/06/2011 § 2 Comments
“Exactly. That’s what’s been happening here for the past ten thousand years: You’ve been doing what you damn well please with the world. And of course you mean to go right on doing what you damn well please with it, because the whole damn thing belongs to you.” Daniel Quinn
Years ago Dasha and I moved into a rented flat in London. It was tiny, with just one bedroom, but had a gorgeous mature garden 100 foot long. I looked forward to working in it, cultivating the soil and planting things, weeding, pruning the shrubs, sowing annuals. Yet as it turned out, I didn’t do any of these things. The grass grew long, the shrubs grew untamed, along with the weeds. I enjoyed spending time in the garden but wasn’t motivated to improve it.
After a year we moved into a small house that we had bought, which also had a garden. This time I had no motivational problems – over the next few years we transformed that garden from a patch of unkempt grass, overgrown laurel trees and old patio to a beautiful, fertile, colourful haven.
The main difference between these two situations is the sense of ownership I felt in the house. In the flat, I knew we were only there temporarily and felt that if I put work in, I wouldn’t get it back. I also knew that I couldn’t make all the changes I would like – it belonged to someone else and they might not approve. In the house, by contrast, I had freedom to do what I wanted (subject to negotiation with Dasha), the knowledge that I would be there for a decent period of time and so could see the results of my efforts over time, and the incentive that a beautiful garden would create value. We would get pleasure from spending time in it and it would increase the value of the property when we came to sell. And so it proved.
For those of us interested in having a healthy relationship with Mother Earth, this sense of ownership is something we want to cultivate. The pillaging of our Earth’s resources and the degradation of our ecosystems would surely cease if we remembered that this is our home for the long term.
Yet much of what is commonly termed “ownership” in our society is simply a license to exploit, carrying rights but precious few responsibilities. This is most extreme in the case of shareholder ownership, which carries power but no legal responsibility. What sort of ownership is that? Our laws are there, it seems, primarily to protect the powerful from any sort of accountability. If we are lucky, an enlightened “owner” will care for what he or she owns. If we are not, the law sits idly by.
We need a far more mature version of ownership – ownership based on love and freedom, not on fear and control.
Funnily enough, we can see a model, of a sort, in the development of the role of the Queen over the years in property law. In strict legal theory the Queen (or to be precise the Crown, which in effect means the state) owns all the land in the UK. We simply have a temporary license to occupy it with her permission. In feudal times this gave the king or queen huge power. Over the years however, as a result of a series of freedom struggles not so different from what has been going on in north Africa this year, we have been liberated. We now hold our land free from interference from the Crown (“freehold”) and this is backed up by the law. Of course the Queen is still there, but her role is now largely symbolic.
Is this the future of shareholder ownership? At the moment shareholders retain ownership of their capital and “lease” it to the board and staff to make profit from. The shareholders then sit at a distance and collect the surplus profits. They can fire the board if there is insufficient surplus. This places considerable pressure on the board to maximize profit above anything else – after all, for many people the first thing on their list of things to do each morning is “Keep my job”, which means keep the shareholders happy. Hence we get this remorseless drive towards growth at almost any cost. We would get very different, more responsible, behaviour if shareholders power were diluted, allowing a universal suffrage where a cross-section of society appoint the directors.
As I write all this down it sounds terribly sensible (to me at least!). Yet to question the nature of ownership in our society is a revolutionary act. It is to risk being called a communist or worse.
Yet as I have tried to show, I strongly believe in ownership and the positive behaviours that can accompany it – responsibility, caring, taking a long-term approach. It is just that they’re not generally associated with shareholder ownership, and certainly not on the stock market, where remote speculators exchange shares like playthings.
I don’t mean to tar all shareholders or businesses with the same brush. There are business people who act like long-term owners. But far too many are acting like temporary tenants – once this piece of land has been exploited, they’ll move on. Only there is nowhere else to move to. Whoops….