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Sixty-two years ago, the Californian financial sage Louis Kelso, in his major work, "The Capitalist Manifesto," correctly demolished the labor theory of value and argued that since productivity came increasingly from capital assets and investment (tangible and intangible), labor should have a proper share of the returns. Millions of wage earners would thereby be turned into owners in a fairer and less divisive pattern of socialized capitalism. This should be achieved, among a variety of ways, through much expanded employee-share ownership and similar schemes.

For more than half a century nothing much happened. In the United Kingdom in the 1980s, the idea came and went that privatization of state industries could be combined with substantial share distribution to wage earners on a massive scale, ending class war and employer-employee antagonism. In fact, this Thatcher-era dream went further — that class divisions and inequalities would melt away as wealth ownership widened, bringing dignity and security for almost all.

Proponents were fond of referring to Japan, which was seen at the time to be one of the most equal major economies, with modest top pay, good health statistics and admirably high and widespread personal savings. (Less attention was paid to the lack of gender equality and to overworked and exhausted businessmen.)

But in the West it was only a dream and it soon faded. Instead, wages stagnated, divisions widened, safe jobs for life shrank and a new so-called precariat — the generation working in the gig economy — emerged, bringing fresh uncertainty and sense by many of being unjustly left behind.

Speeches were made about popular capitalism and wider ownership, but round the world the old capitalist pattern staggered on unreformed into the new century, with wealth tending to be ever more concentrated on a vast scale in fewer and fewer hands (one of Karl Marx’s predictions that came true), and with the assumption prevailing that nothing much needed to change or was going to change.

But now, with the world economy reeling, some perceptive thinkers and columnists see the idea of much wider sharing of wealth, and deep reform of the capitalist system, as a key part of the recovery from the COVID-19 pandemic. The crisis, it is being argued, could at last provoke the reform and onward evolution of capitalism that the past had failed to deliver.

As governments have had to prop up firms and whole industries as never before, pouring out loans and grants and actually paying most of the wages of millions of workers, it would be only fair, goes the thesis, for the state to acquire equity shares in companies rescued, which could then spread around to most of the adult population.

This would be not so much universal income — an idea often floated but impossibly expensive — but universal capital, meaning the security and dignity for millions of households of a modest bit of savings for all, in place of the job insecurity and mounting indebtedness that seem to be the fate of too many working families.

As a vision it is very attractive. But does it have any more impetus, and any more practicality, than all the failed initiatives of past decades?

There are two big reasons why it might.

The first is that faith in the old formula in the West — that freedom and democracy, with the rule of law and healthy capitalism, were all inseparable and needed each other — was beginning to fray long before the pandemic. Increasingly the whole system seemed to be under challenge, not just from popular discontent inside Western societies, and not just from archaic ideas of the coming triumph of socialism — now deeply discredited — but much more from a new form of Asian capitalism that was roaring ahead, notably in China, even though nothing like democracy prevailed there and the law was applied in an arbitrary manner, favoring the rulers rather than the ruled.

The second reason why the time might at last have come for real change in the Western capitalist model (or rather process) is that it is now not just a pious aspiration, it is a mass demand. Digital technology and the communications revolution have both empowered the vast majority to call for a better deal and lifted the veil on the less acceptable faces of the current capitalist system. Transparency has pierced the inner workings of global business and finance, and what has been revealed is proving politically unsustainable.

Fairer sharing of wealth, and especially new wealth is, of course, only part of the story. The demand from the grassroots for a far greater say in shaping not just the economic future but the social, legal and moral order of today and tomorrow, is being amplified as never before by almost total connectivity and information flows. The pressure is on for democracy to become more and more direct.

So with fairer capitalism has to go better access to more effective parliaments and governing institutions, much fuller educational opportunities, pleasant homes and reskilling for all to meet the needs of a transformed industrial era.

In short, a new kind of egalitarianism is pushing its way to the center of the global stage.

The dream of 50 or 60 years ago is now coalescing into a reform movement of dogged determination — not to bring in some new world order or political utopia but to upgrade living and working conditions for the great majority decisively. That means improving the world’s economic systems in radical and achievable ways — not by ideology but by sensible and steady piecemeal reform.

It has taken a major crisis, on top of a technological revolution, to get real change moving, but it may at last be under way.

David Howell is a Conservative politician, journalist and economic consultant.

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