"The Social Ownership of Capital" by Richard Minns, in New Left Review (Sept.-Oct. 1996), 6 Meard St., London W1V 3HR.

Communism may have proved a resound- ing failure, but socialism-of a sort-has, almost unnoticed, won the day. In the United States, the United Kingdom, and elsewhere, employees have become, through their pension funds, owners of "the means of production." In 1994, pension funds world- wide held accumulated assets worth $10 tril- lion, an amount equal to the market value of all the companies listed on the world's three largest stock exchanges.

The one thing the new worker-owners lack is control, complains Minns, a former financial officer of the Greater London Enterprise Board who now works for the European Bank for Reconstruction and Development. "Instead, they and their sav- ings are hostages to a financial regime which systematically searches for the high- est rate of return regardless of the conse- quences for employment, the environ-ment, or the state of the social infrastruc- ture." Of the $7.5 trillion in pension fund assets in the United States and United Kingdom, he points out, about 80 percent are managed by professional investment firms.

Doesn't it make sense for workers to leave investment decisions to those finan- cial experts? Not in Minns's view: they "are notorious for their short-term investment practices, spurring unproductive and costly take-over battles, and prioritizing short-term dividend payments at the expense of broader economic and welfare considera- tions." In the end, "high profits from invest- ment at the cost of reduced jobs do not cre- ate better pensions or more secure pension funds.'

But shifting control of corporate capital to labor, Minns observes, is no easy matter. In the mid-1970s, Rudolf Meidner of the Swedish Trade Union Confederation pro-posed requiring large companies to issue new shares equal to about 20 percent of profits, with the shares to be owned by wage- earner funds controlled by trade unions. But even worker-friendly Sweden could enact only a watered-down version of the plan.