Introduction and items for debate

[Shann Turnbull <sturnbull@mba1963.hbs.edu>]

SELF-INTRODUCTION

My interest in Employee Ownership arose because of my realization that the
capitalist system is inefficient and inequitable, and especially so in the
dominant "Anglo" cultures.  This realization developed while I was Harvard
Business School 1961-3 and was reinforced with my experience as a corporate
raider from 1966 to 1974.  In 1973 I invented techniques to make capitalism
more efficient and equitable and invited Louis Kelso to Australia to
promote his proposals.  To introduce both his and my own proposals for his
visit I wrote "Democratising The Wealth of Nations".  Since then I have
been working on ways to introduce the theory and practice of an ecological
form of private property market economy.  I now have over 200 articles
published.  Some are in internationally refereed academic journals, most
are in professional journals and many in popular publications.  A selected
bibliography is on my web page http://www.mpx.com.au/~sturnbull/index.html
and a full bibliography is available on request.  I can send by e-mail
articles written since1984.  

In 1991 I made two solo lecture tours on privatisation to the Czech +
Slovak Republics and accompanied Jeff Gates to help run a ten day seminar
on privatisation techniques in Beijing.  Jeff invited me to present my
techniques as they did not require either the complex financing
arrangements or tax incentives of the Kelso proposals in transforming
economies.

My intellectual development and analysis of the shortcomings in the theory
and practice of market economies are set out in a paper 'New Strategies For
Structuring Society From a Cashflow Paradigm', presented to the Fourth
Annual Conference of the Society for the Advancement of Socio-Economics
held at the Graduate School of Management, University of California,
Irvine, California, U.S.A. in a "track" on the Third Way, Friday, March 27,
1992.  I have sent this paper to the list editor and requested that it be
made available in the COG archives.

Two of my most relevant articles for this discussion group published in
refereed academic journals are:

'Flaws and Remedies in Corporatisation and Privatisation', Human Systems
Management, IOS Press, 12:3, pp. 227-252, Netherlands, 1993.

'Stakeholder Democracy: Redesigning the Governance of Firms and
Bureaucracies', Journal of Socio-Economics, JAI Press, 23:3, Fall, pp.
321-360, Connecticut, 1994.



ITEMS FOR DEBATE

1. That privatisation is a third best solution to stakeholder ownership and
control involving employees, customers & suppliers.

2. Government ownership with stakeholder control is a second best solution.

3. Government ownership and control without stakeholder participation is a
fourth best solution.

4. There is no theoretical basis to support the view that privatisation is
more efficient than stakeholder ownership and control and there are
arguments to the contrary.  (Refer to my article on "Stakeholder co-operation")

5. A major political driver for privatisation is the ability of a
government to raise funds without imposing taxes.

6. As no equity investor relies on obtaining profits for ever, all
privatisation should only be carried out on the basis that ownership and
control reverts to the stakeholders after the investors time horizon which
can be as short as ten years. eg Like BOOT schemes.

7. No privatisation should be undertaken with a unitary board with its
inherent conflicts of management self interests which allows management to
exploit investors, customers, suppliers and the host community. It is these
conflicts which makes government ownership with its centralised unitary
control system so inefficient and so a fourth best solution.  The
introduction of a division of board powers with stakeholders as found in
Mondragon with its checks and balances and decomposition in decision making
labor would introduce a second best solution more efficient that
privatisation with unitary board.  Unitary control introduces absolute
power to manage board conflicts of self-interest and so the power to
corrupt both people and organisational performance.  

The World Bank and other agencies around the world are introducing and
spreading this corrupting undemocratic form of control through both
privatisation and their other programs.  In 1997 I met with the President
of the Bank to advise him of the problem and the solution of using multiple
control centers.  The privatisation experts in the Bank such as John Nellis
discounted consideration of European techniques for introducing checks and
balances such as researched by list member and Bank Adviser, David Ellerman
at Mondragon.  Instead, the President, an Australian colleague, set up a
Corporate Governance network whose experts are inculturated in the
inherently corrupting Anglo system of unitary control.

Regards


Shann Turnbull
P.O. Box 266 Woollahra, Sydney, Australia, 1350
Phone: 02 9328 7466 office; 02 9327 8487 home
Fax: 02 9327 1497 home & office.  Mobile 0418 222 378
Outside Australia, replace first "0" with "61" after international access code
Life long E-mail: sturnbull@mba1963.hbs.edu
http://www.mpx.com.au/~sturnbull/index.html