In the recent New Left Review, Robin Blackburn tries to provide some content to ‘social Europe’ and resurrects the Swedish labor economst Rudolph Meidner’s ambitious, ill-fated, and now forgotten wage-earner’s fund.
“Anticipating the new social expenditures that would be entailed by an ageing and learning society, Meidner came to believe in the need for strategic social funds—‘wage-earner funds’—to be financed by a share levy. This levy did not work like traditional corporate taxation, which subtracts from cashflow and, potentially, investment. Instead Meidner’s levy falls on wealthy shareholders, the value of whose holdings is diluted, not on the resources of the corporation as a productive concern. According to the original plan, every company with more than fifty employees was obliged to issue new shares every year, equivalent to 20 per cent of its profits. The newly issued shares—which could not be sold—were to be given to a network of ‘wage-earner funds’, representing trade unions and local authorities. The latter would hold the shares, and reinvest the income they yielded from dividends, in order to finance future social expenditure. As the wage-earner funds grew they would be able to play an increasing part in directing policy in the corporations which they owned. . .
If an eu-wide Meidner-style corporate levy—set initially at 10 per cent of corporate profits—was introduced, the resources raised could be put in the hands of regional networks of democratically-administered social funds. This should be conceived of as an addition to—not replacement of—national welfare policies which, where necessary, might also be able to draw on emergency help from the Europe-wide fund. Levied on a continent-wide basis the arrangements would contribute towards ‘tax harmonization’ and help to deter social dumping. The new member states have low corporate taxes—Estonia’s are to be zero on reinvested profits—while their income taxes are broadly similar to those in many parts of Western Europe.”