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Every company should be owned by its employees

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Re: Every company should be owned by its employees

#841

Post by WalterBright »

andrepd wrote: post #786
WalterBright wrote: post #649

Earlier quoted context omitted.

It's way more efficient than any other system that has been tried. Free markets bury command economies.

"Free markets" and "planned economies" don't encompass the breadth of possibilities of organisation of politics and economics. Case in point: TFA ... This post is precisely about a free market economy where the (imo unnatural) disconnect between working in an enterprise and owning the products of that enterprise doesn't exist. That's all. Not sure what "command economy" has to do with it.

> unnatural

If you hire a landscaper to redo the landscaping of your property, is he thereby entitled to own a share of your property? How about the guy you hired to fix your water heater? Does he get a share, too? Is that natural?

Re: Every company should be owned by its employees

#842

Post by [deleted] »

sidmitra wrote: post #632
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

>We build monuments for individuals not for committee. That's the second time i'm hearing that quote today from completely unrelated sources. The quote is from David Ogilvy, in case anyone is wondering. "Search all the parks in all your cities; you'll find no statues of committees." https://x.com/The_AdProfessor/status/1705254246109651053

[deleted]

Re: Every company should be owned by its employees

#843

Post by ozim »

panarky wrote: post #543
ozim wrote: post #535

There is a little * and fine print. Every profitable company. There is nothing written in the article what happens when company would be profitable 5 years and then suddenly crashes because of market forces. Can employees take the hit and work next 2 years without salaries to wait out until market goes back?

When a company's shareholders are employees, their wages don't stop just because the company loses money two years. Just like a company whose shareholders are pension funds and index funds doesn't stop paying its employees when they have a couple down years.

Most of companies in the world are not pension funds or F500 or that company in the article - my take is that it is misguided also to label "one single company owner takes all" because that is not true.

Most of companies in the world are mid to small size companies that cannot survive 2 years continuous loses without taking a loan to pay their employees. Those loans are not "mortgage rate" like 2% but more like 20% and it sinks those companies quite a lot.

Most company owners are not Elon Musk or Bill Gates or Steve Jobs as people would like to imagine and unfortunately most of arguments I see are like 99% of company owners would be flowing in riches like ones mentioned ... just to remind Steve Jobs died of cancer and all the money he had did not help him (like Walt Disney who is frozen /jk)...

Re: Every company should be owned by its employees

#844

Post by bccdee »

WalterBright wrote: post #647
bccdee wrote: post #466

Earlier quoted context omitted.

> We forcibly allocate capital less efficiently Efficiency with regard to what goal? The current allocation of capital in the US is quite inefficient if we're interested in the welfare of the public. Billionaires have far more capital than they know what to do with, and since they're unaccountable for their investment choices, they strongly tend to steer the economy toward vanity projects. Meanwhile, many families ca…

Without American billionaires, there would be no SpaceX. YCombinator is billionaires investing in startups.

I already addressed this:

> Billionaires tend to steer the economy toward vanity projects.

Musk's only meaningful contribution to SpaceX was money. We could just have raised NASA's budget instead, but we didn't. There are lots of things that we need to spend money on. Space is not our top priority.

Musk, however, is independently wealthy and can spend his money on whatever he wants. So he spent it on rockets, as a vanity project. Yes, some useful innovations came out of that. But what was the opportunity cost? Was this where the money was best spent? I have no reason to believe so.

Re: Every company should be owned by its employees

#845

Post by bccdee »

apantel wrote: post #534
bccdee wrote: post #466

Earlier quoted context omitted.

> We forcibly allocate capital less efficiently Efficiency with regard to what goal? The current allocation of capital in the US is quite inefficient if we're interested in the welfare of the public. Billionaires have far more capital than they know what to do with, and since they're unaccountable for their investment choices, they strongly tend to steer the economy toward vanity projects. Meanwhile, many families ca…

The system is not perfectly efficient because humans aren’t efficient. I think the idea is, keeping a market relatively free (with a sane amount of regulation) allows capital to seek returns. This leads to a lot of independent, decentralized value production, like startups popping up out of nowhere because some founders have an idea and attract capital. The thing is, people who pile up capital don’t have to be effici…

> The only difference between rich people and poor people is they have more money so their inefficiencies are louder.

Yes. Their inefficiencies are deafeningly loud and have a massive impact on the rest of us. This is why I am suggesting that we intervene to get rid of the ultrawealthy as a class.

> If you wanted to implement a perfectly-efficient system

Stop right there. Don't pretend that "what if we got rid of billionaires" is a slippery slope towards a society of perfect clones where all individuality is suppressed. You don't really believe that—you're just fishing for gotchas, and it's beneath you.

Re: Every company should be owned by its employees

#846

Post by bccdee »

hellojesus wrote: post #755
apantel wrote: post #534

Earlier quoted context omitted.

The system is not perfectly efficient because humans aren’t efficient. I think the idea is, keeping a market relatively free (with a sane amount of regulation) allows capital to seek returns. This leads to a lot of independent, decentralized value production, like startups popping up out of nowhere because some founders have an idea and attract capital. The thing is, people who pile up capital don’t have to be effici…

Efficiency is measured exactly by people maximizing their utility subject to their preferences and constraints. What you see as vanity, such as hair extensions, may be a high utility item for others. Consider the hair extensions make them a more attractive mate and provide them the opportunity to breed with a better stock, for example. Similarly, consider that 20k ft sq mansion in context: all the prior owner(s) of t…

> That is maximally efficient, economically speaking.

It is not. The resources which went towards that mansion would be (by your definition) much more efficiently spent elsewhere. The utility which one wealthy person gets from a 20k sqft mansion is much smaller than the total utility which 20 homeless people would get from a 1k sqft apartment.

Re: Every company should be owned by its employees

#847

Post by nostrademons »

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.

nit: With a buyback, the buyer is the corporation itself, and the cash comes from the corporate treasury. Transitively this is "selling to existing owners", but it's not like their shares are transferred to other shareholders. Rather, the shares cease to exist and the value of all other shares increases to reflect the reduced number of shares outstanding.

Mechanically it's pretty similar to if the company had just paid out cash as salaries (cash leaves the corporate treasury and enters the employee's brokerage account at market values), but the market is the intermediary, and the tax and accounting treatment is pretty different.

Re: Every company should be owned by its employees

#848

Post by bccdee »

Aerroon wrote: post #737
bccdee wrote: post #466

Earlier quoted context omitted.

> We forcibly allocate capital less efficiently Efficiency with regard to what goal? The current allocation of capital in the US is quite inefficient if we're interested in the welfare of the public. Billionaires have far more capital than they know what to do with, and since they're unaccountable for their investment choices, they strongly tend to steer the economy toward vanity projects. Meanwhile, many families ca…

> The current allocation of capital in the US is quite inefficient if we're interested in the welfare of the public. The welfare of the public today is not the same as the welfare of the public for all time. The Soviet Union couldn't compete on the development of computers, because the USSR was trying to optimize towards what could computers be used for then and there. It turned out that computers could be used for a…

You assume pharmaceutical profits are all funnelled to R&D, rather than to shareholders. I see no reason why we shouldn't slash profit margins on medicine and offer the money back in earmarked grants.

So you see, I'm actually radically in favour of R&D.

Re: Every company should be owned by its employees

#849

Post by bccdee »

hellojesus wrote: post #751
hgomersall wrote: post #642

Earlier quoted context omitted.

There's a big range between living in a dictatorship and having only private entities allowed to invest in things.

Is take the American system every day. What is the moral justification for a state stealing private property? Billionaires get to invest however they want because it's their property. What you see as a vanity project actually employs workers, feds families, and generates tax revenue. They are massively contributing to the economy.

> What is the moral justification for a state stealing private property?

I think it'd be good, is why. Non-intervention with private property is extremely low on my list of moral priorities. If someone's starving, I don't think you really have a right to keep food away from them.

> What you see as a vanity project actually employs workers, feds families, and generates tax revenue.

…and are they actually making anything useful? Or are they wasting everyone's time? Workers could be employed doing any number of things. For a rich person to "creating jobs" means nothing if those jobs are pointless. We could easily take that money away and create jobs doing something more important.

Re: Every company should be owned by its employees

#850

Post by bccdee »

blackhawkC17 wrote: post #500
bccdee wrote: post #466

Earlier quoted context omitted.

> We forcibly allocate capital less efficiently Efficiency with regard to what goal? The current allocation of capital in the US is quite inefficient if we're interested in the welfare of the public. Billionaires have far more capital than they know what to do with, and since they're unaccountable for their investment choices, they strongly tend to steer the economy toward vanity projects. Meanwhile, many families ca…

> The Chinese state takes a rather strong hand in allocating capital, and that has treated it fairly well over the past few decades. The Chinese government has spent massive amounts on vanity projects. A lot of government funds have also been looted by CCP honchos. Thanks but no. I’ll take American capital allocators over the Chinese any day. Most importantly, I don’t want to live in a dictatorship.

> A lot of government funds have also been looted by CCP honchos.

Yeah, because they're corrupt and undemocratic. I certainly don't endorse China. But they do put to rest the idea that the freer the market, the stronger the economy.

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