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Every company should be owned by its employees

elysian.press

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Re: Every company should be owned by its employees

#801

Post by W3cUYxYwmXb5c »

yibg wrote: post #762
Nifty3929 wrote: post #594

I think it's easy to look at this with an existing, successful business in mind - but things don't always work out that way. How would a business like this get started? Usually the owner is the one who invests a lot of their own time and/or money into the business to get it off the ground in the first place. Would we be asking workers to pony up in those early years when failure is likely? With Central States, the st…

This model also puts a lot of risk on the employees. It’s basically forcing investment in the same company that pays your salary. An investment that has less liquidity than standard investments. It’s like putting all your retirement fund into your company’s stock.

This is a very good and understated point. One of the benefits we have as employers is being unattached. If things go bad, we can cut and run to some other company. On the other hand, the owners and primary investors are by definition more invested, and have to actual bear the burden of failure. I definitely didn't want that level of involvement in most of the companies I have worked for.

Re: Every company should be owned by its employees

#802

Post by Gormo »

piva00 wrote: post #430
Gormo wrote: post #421

Earlier quoted context omitted.

>2. A business-first, citizens-second approach to society. This is meaningless. Businesses are activities undertaken by people. Everything resolves back to the people -- the same aggregation of the same individual people in all cases. Reifying the abstraction of "business" to treat it like some separate entity that's at odds with the very people who are engaging in the actual activity that term describes is a monumen…

No, it's not meaningless. Businesses are activities undertaken by people but they are also legal entities which have no need to abide by ethical or moral standards, shielding the underlying people from liabilities incurred by such entity. People can't do that. Citizens need to abide to cultural norms, societal expectations, etc. Of course everything resolves back to people, in a reductive sense, but those entities (c…

> Businesses are activities undertaken by people but they are also legal entities which have no need to abide by ethical or moral standards, shielding the underlying people from liabilities incurred by such entity. People can't do that.

I don't understand the concept of assigning moral agency to a pattern of activity. The legal entity is itself just a conceptual framework under which actual people operate, and not a concrete entity capable of autonomous action.

The individuals who own and operate the business are the moral agents, and I don't see how they are shielded from the consequences of their own actions. Limited liability just creates a distinction between personal and business assets for the purpose of financial liability, and does not have anything to do with ethical or moral standards.

> their only motive is profit-motive,

"Profit" is just a quantification of net gain in subjective utility experienced by people, in whatever form that takes. Fundamentally, "profit motive" is a redundant phrase, because "profit" refers to the fulfillment of whatever motivation you had in the first place. Whether that's good or bad overall isn't a function of the pursuit of profit -- profit consists of fulfilling the pursuit of anything -- but rather what was being pursued, and what moral boundaries were crossed its pursuit.

Some people seem to bend over backwards to create conceptual frameworks aimed at externalizing the causality of human behavior. Perhaps those who want to create utopia need to find the fault in our stars, not in ourselves, in order to hold out hope that all the world's problems can be someday solved, so they blame abstractions like "capitalism" or fictional characters like the devil for the unethical behavior of human beings. But none of that is really valid -- all of the problems of society are rooted in the fallibility of human nature, and there's no way around that. Unscrupulous, ambitious people don't go away simply because you've altered the form of some abstract system -- they will find ways to benefit at the expense of others no mater what system you cook up.

Re: Every company should be owned by its employees

#803

Post by Alupis »

Draiken wrote: post #712
hemantv wrote: post #617

Earlier quoted context omitted.

Individuals have visions not committee. We build monuments for individuals not for committee. Having said that no man is island of itself. Current incentive structure works great to motivate individuals to start companies

I don't think this holds to scrutiny. This breaks down as soon as you get out of the idea phase. Everyone has visions, and most great achievements today are the results of an amalgamation of them. The really big achievements are almost always the result of groups, not individuals. People that idolize others have to turn a blind eye to everything surrounding that individual's achievement. It's simply easier to simplif…

> This breaks down as soon as you get out of the idea phase.

No, it does not. Most ideas fail, and a significant amount of "off the ground" projects fail.

To be successful long term, it requires vision and commitment. You can find people to grind on your vision, but you cannot make them see what you see.

The overwhelming majority of massive successful projects and companies have a key figure that drove them to success.

I'd wager there are very few examples (if any) of a massive and successful companies that began life as a startup with a 30+ person board, for example.

Re: Every company should be owned by its employees

#804

Post by Gormo »

YokoZar wrote: post #776
jonas21 wrote: post #763

Earlier quoted context omitted.

Google spent $22 billion on stock-based compensation in 2023 [1]. That's over 1% of the stock of the company transferred to employees in one year. Now, many people probably sell that stock as soon as they can, so the employee ownership isn't cumulative over the years. But it would be quite hostile to employees to stop them from doing this in an effort to make the company more employee-owned. [1] https://abc.xyz/asset…

Indeed, employees often effectively sell their stock to existing owners via share buybacks. This seems entirely rational to me - I've bet a significant part of my career on the success of the company I work for, why should I also bet my savings? Diversification has real value, and going all-in on one company is just a bad bet.

At the end of the day, an employee is just a special class of vendor -- scrape away all of the normative cruft that gets injected into these discussions, and you have a fee-for-service relationship between a customer and a supplier.

And lots of people would rather just be that supplier, who gets paid a specified amount of money for a specified provision of service, and not be forced to bear short-term risk or to hold out for a long-term upside that depends on lots of stuff they have no control over working out for the best.

Re: Every company should be owned by its employees

#805

Post by Scarblac »

skizm wrote: post #798
Scarblac wrote: post #782

Earlier quoted context omitted.

> How would a business like this get started? The one I know, it just started out with some people who were all equal co-owners. When a new employee joins, they get the same share as everyone else. When someone leaves, they lose their share. Shares can't be sold, everyone has the same amount. It's a cooperative.

This seems extremely good for late employees and extremely bad for early employees / founders? Late employees have no risk and the same reward.

It's originally a software agency that later decided to also develop some of their own products, so there's not that much risk. The primary reward for everyone is just their wages.

They're organized at team level, teams have to write business plans that must be approved by people from other teams, teams decide whether to recruit an extra person, and so on.

Large investments (they built a new hq) are voted on by the whole company.

Re: Every company should be owned by its employees

#806

Post by talldatethrow »

teaearlgraycold wrote: post #34
talldatethrow wrote: post #8

The company I work for sucks. I rather take more cash and just by stocks in companies I believe in more.

Why not work for a company that sucks less?

Countless reasons. Office is near my home, and maybe Im not hiring material at those better companies. But I might be bright enough to see that they are doing better than my company.

Re: Every company should be owned by its employees

#807

Post by Gormo »

eszed wrote: post #509
nindalf wrote: post #468

Earlier quoted context omitted.

We actually have two mechanisms: laws/regulations and customers voting with their wallet. Since we see that a majority of customers consistently go with the cheaper option, we know how they feel. So the "better" firm gets outcompeted. So regulation, you say. But those regulations are set by governments voted in by the same consumers. Their preference for lower prices is clear, and government follows their preference.…

We already do this in lots of areas. It would be "cheaper" - and doubtless more profitable; lots of people would choose them! - to produce / buy, say, bicycle helmets that are made out of cardboard and nails, but we collectively recognize that would be counter-productive and require that only the "expensive" types be offered for sale. I'm sure there are some people who are upset by this.

No, I don't think that's right at all. I don't think anyone is "collectively recognizing" anything, and the reason why bicycle helmets made of cardboard and nails are not being sold is because people -- as individuals and not "collectives" -- do not in fact want them.

Re: Every company should be owned by its employees

#808

Post by Gormo »

jrflowers wrote: post #15
Murky3515 wrote: post #5

>Every year, those employees get a percentage of their salaries in company stock. Ok? Anybody can choose to do this if they work at a public company. But what happen if it's mandatory and the stock goes down? Now your labor was stolen at below market rate! Then we will hear "employees compensation should be resilient to market fluctuations."

I like this caricature of the spoiled entitled employee because it completely ignores the concept of shareholders having a say in governance. If stocks were only a proxy for money and nothing else the example would be spot-on.

Can you elaborate on how shareholders having a say in governance relates to worker compensation? Why shouldn't shareholders have control over governance?

Re: Every company should be owned by its employees

#809

Post by Gormo »

phkahler wrote: post #258
Murky3515 wrote: post #5

>Every year, those employees get a percentage of their salaries in company stock. Ok? Anybody can choose to do this if they work at a public company. But what happen if it's mandatory and the stock goes down? Now your labor was stolen at below market rate! Then we will hear "employees compensation should be resilient to market fluctuations."

This is not about publicly traded companies. It's about employee owned ones. Your point is still valid, but not in the way you think.

If employees can't sell their shares on an open market, do they really own them? What does it mean for them to own the company if they can't trade their ownership stake for money, if that's what they want?

Re: Every company should be owned by its employees

#810

Post by Gormo »

phkahler wrote: post #264
Terr_ wrote: post #13

> After they leave the company or retire, the complete balance of their accounts will be paid out to them over a six-year period. Hmmm, so that line is a little misleading since they don't really "own" the stock in a conventional sense. They can't sell it to anybody else and they can't hold on to it indefinitely. To the extent they "own" it they are are forced to only ever "sell" it back to the same company at some m…

It's tricky. It wouldn't be employee owned if you could sell your shares to the public or keep them indefinitely after you leave. That's why you have to sell them back to the company/employees. Doing that over a period of time makes you value longer term company performance vs short term.

What do you get out of "owning" shares that you can't sell and that have no market price? Why would someone want this instead of just being paid cash for services rendered by someone else who's bearing all the risk?
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