Then every employee should be ready to sacrifice their personal net worth if the company makes losses.
They can reap the benefit, but also take losses. Seems entirely fair.
Every company should be owned by its employees
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Re: Every company should be owned by its employees
#832If a company needs capital injection (boot strap), will employees be required to fund or put up their assets as collateral? How will bankruptcies be managed?
Re: Every company should be owned by its employees
#833I think the most surprising thing about trends in modern executive class pay is just how steep it is compared to the median employee. It makes me wonder why shareholders outside the company are happy with it. For example, the Boeing CEO made 22M in 2022 and 32M in 2023. I'd argue that he did a much worse job in 2023 than in 2022 but somehow got paid almost 50% more. Even Jensen Huang, CEO of Nvidia, is "only" being p…
I understand why CEO salaries are high. It's essentially a bidding war among companies. What I don't understand is the lack of responsibility CEOs are expected to take when things go wrong.
Re: Every company should be owned by its employees
#834Earlier quoted context omitted.
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.
>It’s like putting all your retirement fund into your company’s stock. As opposed to putting your retirement fund into other company's stocks, which everyone does at the same time, making those companies too big too fail without unraveling several threads of social fabric. I think your statement actually proves why employees should have stock in the company. If we really were worried about issues such as this we'd ha…
If I'm employed by Acme Corp, and have a 401k in index funds, but get laid off after the company goes bankrupt, I lose my income, but not my wealth.
On the other hand, if my wealth is in Acme Corp and they go bankrupt, I lose my wealth and my income.
The first model is less risky, yet profitable enough to be worth it. And everyone can still own the means of production.
Re: Every company should be owned by its employees
#835Earlier 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.
Seems also like a perverse incentive to delay or avoid hiring as well. Every new employee makes everyone else poorer. Unless that one employee is so productive they single handedly make up for lost ownership with increased profit.
Re: Every company should be owned by its employees
#836Earlier quoted context omitted.
But what are you suggesting? We forcibly allocate capital less efficiently; make markets less efficient and less responsive to innovation; with the sole aim of achieving a utopian worker-cooperative owned world? Hrmmm, where have I heard that before...
Capital allocation under capitalism is also not efficient, it's pretty damn wasteful when you consider the resources used to find its "efficiency". Innovation is also becoming a meaningless word to defend the system, the innovations have their foundations fostered with public money, through funding of scientific research which is then later captured by the industries to develop products. The innovation is productiona…
It's not perfectly efficient but I would say it's remarkably efficient.
Re: Every company should be owned by its employees
#837Earlier quoted context omitted.
Then maybe "taking over the market" is a bad metric, and we should be optimizing for making a company that makes the workers' lives better. The US cultural bias is showing here, as it's assumed that profit is above all else, and a company that forgoes profit to make workers happier must thus be less good. The vast majority of people in companies are workers. Let's stop optimizing for owner wealth and start optimizing…
Why are there so many more startups in the US compared to Europe? While not a perfect measurement, there is more innovation and economic generation that happens in the US compared to Europe. Time will prove which culture of business wins.
Natural selection. All the ambitious dreamers left Europe 100-400 years ago.
Re: Every company should be owned by its employees
#838Worker co-ops and ESOPs are already available as business structures. If they’re better, they will be more common, it’s as simple as that. Mandating employee ownership is ridiculous. In terms of policy I think a cap on revenue per employee for a privately held company and a cap on individual ownership is a better solution to reducing income inequality. That and eliminating involuntary unemployment so that companies h…
> That and eliminating involuntary unemployment so that companies have to compete with a guaranteed job that is not exploitative. You don't need to have job guarantees for that. A strong economy in general helps for this, and a basic income would also help.
A strong economy helps certainly but a JG eliminates involuntary unemployment, provides a basic income, ensures price stability and sets the minimum work standard the private sector must exceed in order to hire.
If you’re waving a magic wand anyway why not choose the best policy?
Re: Every company should be owned by its employees
#839Earlier quoted context omitted.
They can have more revenue than the cap I’m just saying they should be publicly listed.
Oh, misunderstood. You still need to think about what it is you wish to optimise for. I am not a regulation hater but naive regulations tend to cause rather than mitigate pathological economic incentives. It is very very hard to get these kinds of things right. Another thing, one related to your original post: it is, of course, good imho to have a working hand-out system so that you don't starve when you are out of a…
I’m optimising for concentration of ownership. So if you allow a privately held company to get too valuable it’s harder to enforce against concentration of ownership, much easier to do with a publicly traded company IMHO.
In relation to your concerns about a job guarantee they’re all addressed in writing, in particular by Pavlina Tcherneva who has done the most comprehensive work on the subject along with Bill Mitchell and Randall Wray. It should be noted that I disagree with Bill Mitchell on some political issues but his JG work is rock solid.
Re: Every company should be owned by its employees
#840Earlier quoted context omitted.
They can have more revenue than the cap I’m just saying they should be publicly listed.
what makes public listing a good criteria for which the revenue cap be removed? in fact, i dont get the rationale for revenue caps at all. It doesn't produce less inequality, and only produces inefficiencies.
Cap on revenue per employee for a company before it must be publicly listed so that a cap on ownership percentage can be more simply enforced.