Capital and Ideology

by Thomas Piketty

On the Slow Diffusion of German and Nordic Co-Management To recapitulate: In the Germanic and Nordic countries (notably Germany, Austria, Sweden, Denmark, and Norway) worker representatives fill between a third and a half of the seats on the boards of directors of the largest firms whether or not they own any part of the firm’s capital. In Germany, which led the way on these matters, this system has been in place since the early 1950s. Despite the widely acknowledged success of the German and Nordic social and industrial model, which is noted for producing a high standard of living, high productivity, and moderate inequality, other countries until recently had not followed suit. In the United Kingdom, United States, France, Italy, Spain, Japan, Canada, and Australia, private firms continue to be governed by immutable corporate bylaws: in all these countries, a general assembly of shareholders continues to elect the entire board of directors according to the principle “one share, one vote,” with no representation for employees (except in a few cases that have a merely consultative representation, without voting rights). Things began to change slightly in 2013, when France passed a law requiring firms with more than 5,000 employees to set aside one board seat out of twelve for a worker representative. This new French rule was nevertheless quite limited compared to the German and Nordic systems (limited in terms of both the number of worker representatives and the scope of fi...