Is it just me, or have the Lib Dems had a better week? There is a sure-footedness about the party that suddenly seems to be more apparent, culminating in Nick Clegg's proposal that the government should distribute shares in the failed banks to every member of the public.
Now, there has been some predictable moaning about this idea. It is true that it may get in the way of a radical division of the failed banks into their constituent parts, but there is no logical reason why that should be inevitable. The City is sceptical of course. But there have been other comments that it is too reminiscent of the big Thatcherite privatisations which ended with everyone selling off their stake as soon as possible for a quick profit.
I don't think that is true. There are three major advantages about the plan that I can see.
First, it bypasses the City and their exorbitant fees, which they would normally earn in a privatisation. That is almost enough reason to be in favour in itself.
Second, unlike the BT privatisation, people will not be able to sell their shares off quickly, because their value will need to reach a floor price to cover what the government paid out for the banks in the first place. That might be some considerable time.
Third, these shares will be available to everyone and not just a wealthy minority. The combination of the time lag and the large numbers of people who will suddenly have ownership rights over the banks could - though it will not necessarily - provide for popular democratic movements to use those votes to rein in excessive pay and other risky behaviour.
The Thatcherite privatisations involved a minority who did not exercise their ownership rights. This plan will involve a majority and the possibility of popular control.
Friday, 24 June 2011
The genius of the bank share giveaway
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