[HN Gopher] Every company should be owned by its employees
___________________________________________________________________
Every company should be owned by its employees
Author : ellegriffin
Score : 813 points
Date : 2024-07-25 06:10 UTC (16 hours ago)
(HTM) web link (www.elysian.press)
(TXT) w3m dump (www.elysian.press)
| heckerhut wrote:
| We're thinking along the same lines with Common Ground, a social
| app for communities.
|
| We're leveraging a coop but also combine it with tokenized
| ownership.
|
| https://www.commonground.cg/blog/about-us
| oleg_antonyan wrote:
| It's insane how socialism is growing in the west after defeat of
| soviet union
| heckerhut wrote:
| more nuance wouldn't hurt
| oleg_antonyan wrote:
| The headline itself literally repeats Marxists theory: the
| means of production belong to workers aka proletartiat.
| Inside the article they oppose this working class to "evil
| rich CEOs" aka bourgeoisie. I won't even go deeper to
| unrelated to the article topics like "evil imperialism" and
| other nowadays popular in the west ideas used by Lenin&co
| hundred years ago. This crap cannibalizes the very foundation
| of the success of the western civilization and many people
| fall into this - that's insane to me
| Apocryphon wrote:
| Recent article on Spain's Mondragon Corporation:
| https://news.ycombinator.com/item?id=40143814
|
| > No one bats an eyelid at the co-operative model in
| countries such as Germany, "but with these ideas in Texas
| or Kansas, you're basically a communist," says Mendieta,
| only half jokingly.
| kanbara wrote:
| is it so insane, in a world of disparity and outsized influence
| of CEOs and billionaires, where people cannot afford houses?
| maybe the insane thing was how for hundreds of years we let the
| rich dictate the rules as if they knew better for having taken
| advantage of others.
| talldatethrow wrote:
| People can absolutely afford houses. They can so easily
| afford houses that they buy them quickly, often for over
| asking.
|
| If people couldn't afford houses, they would sit unsold until
| sellers lowered the price to a price someone could afford.
| Luckily so many people can afford houses in most areas they
| don't have to do that.
| sofixa wrote:
| You're confusing _some_ entities, often private equity or
| similar corporations buying assets, often to rent,
| sometimes just to park, being able to buy, and the general
| public being able to afford to buy. In many desirable metro
| areas, you need two high incomes (two people in tech or
| lawyers or finance) to be able to afford to buy anything.
| What about everyone else?
| throwaway4pp24 wrote:
| Why does everyone else need to live in a desirable metro
| area? That sounds infeasible with so few of them. If
| there was more desirable metro areas, the prices of those
| few wouldn't be so high.
| timschmidt wrote:
| > Why does everyone else need to live in a desirable
| metro area?
|
| Jobs, mostly. Along with increased access to all the
| things people like, like food, other people, activities,
| etc.
| sofixa wrote:
| > Why does everyone else need to live in a desirable
| metro area
|
| Because _if nothing else_ (and there is a lot of else)
| the tech /lawyer/finance folks want to have restaurants,
| shops, cinemas, street cleaners, utilities etc etc etc
| etc
| blackhawkC17 wrote:
| Then they should be ready to pay higher rents for it,
| because everyone else also wants the same thing.
| ffgjgf1 wrote:
| > often private equity or similar corporations buying
| assets
|
| What proportion of housing do they own? I would assume
| it's pretty small if still significant.
| mjamesaustin wrote:
| Huge percentage nowadays. Lately private equity is making
| 30-40% of all single family home purchases in the US.
|
| https://www.washingtontimes.com/news/2024/mar/15/in-
| shift-44...
| superb_dev wrote:
| _Some people_ , and a lot of private investment.
| talldatethrow wrote:
| Apparently there are more people with money than there
| are houses. So don't tell me people cant afford houses.
| Tell me that there are so few houses that they are
| overpriced or something, and only the top 25% can buy
| them.
| makeitshine wrote:
| It has become out of reach for an increasing number of
| people all around the world. Look at the ratios of price to
| annual salaries and many have risen a lot.
|
| US: https://www.jchs.harvard.edu/blog/home-price-income-
| ratio-re...
|
| > If people couldn't afford houses, they would sit unsold
| until sellers lowered the price to a price someone could
| afford.
|
| This is fundamentally not the case in much of China and
| Taiwan where the wealthy sit on empty homes for years or
| decades. The housing price in Taipei continues to climb
| while a large number of units sit vacant.
| germandiago wrote:
| I see. And you keep looking at billionaires instead of
| regulations or the things that make it possible, like housing
| regulations (talking Europe now, Idk America well enough).
|
| If you really set the market more free, you will
| automatically have more reasonably wealthy people bc of
| competition. When thede few billionaires exist due to
| governments favors we should think what is wrong with some
| people selling favors to others without providing services to
| others.
|
| If you start regulation after regulation you create an elite
| of people and normal people suffering those regulations.
|
| The elites are basically, in this setup, a collusion of
| sellers of favors (politicians favoring employers) and people
| who buy those to avoid competition and favor their business.
|
| This is not possible by definition if you see that with bad
| eyes and watch out permanently.
|
| However, people want more and more regulation bc there are
| always things that are "wrong" and eventually those things
| take you exactly to the outcomes you complain about right
| now. But you want more of it. Guess what you are going to
| have if you ask more of it: more of that.
|
| There is a sentence from Javier Milei that I think is very
| correct regarding this matter: "the politician cannot sell
| you a favor he does not have for selling".
|
| Think of it. We cannot reduce all problems to that sentece
| but there is a very big part of truth in it.
|
| I recommend you to take a look at the profiles of
| billionaires there are around the world. Some are very
| different to others. But the more regulations you have in a
| country, especially the ones that did not develop first, the
| less wealth transfer you have and the more money stay in the
| same people's hands. This is something to think about very
| seriously: the path to derregulation is a better choice to
| keep things balanced.
|
| If you choose the other way, no matter how good it looks to
| you, you will get what you are asking for. Basically, "The
| great taking". Look for that book if you do not know it yet.
| ffgjgf1 wrote:
| Free markets almost never can survive longterm without
| (sometimes extensive) regulation.
|
| Historically there might have been a few exceptions to
| that, but basically always you have a few good years and
| then the winner(s) who emerges starts abusing their
| position (even without any regulation that might make it
| easier for them to do that). Unregulated markets tend to be
| inherently unstable.
|
| And it's not so much less vs more regulation, there are two
| axis and yes corrupt and inefficient governments tend to
| produce regulation that decrease competitiveness,
| productivity, fairness etc.
|
| And then you have industries which simply can't be allowed
| to be privately owned unless there is extensive regulation
| (because free competition is almost impossible in those
| sectors): utilities, banking, transportation etc. sometimes
| even telecom (e.g. roaming fees in the EU).
| AnthonyMouse wrote:
| > Free markets almost never can survive longterm without
| (sometimes extensive) regulation.
|
| There is no such thing as "without regulation". Nobody is
| suggesting a system in which murder is legal and the most
| powerful warlord gets a monopoly.
|
| But there is a difference between "the government
| enforces contracts and anti-trust laws and prices major
| externalities" and "the government micromanages the
| economy and is captured by the incumbents".
|
| So for example, a free market doesn't need zoning density
| restrictions. Their absence has no apparent mechanism
| that would lead to a monopoly. Therefore, a freer market
| in which the government has no _power_ to impose zoning
| density restrictions is better than the current one in
| which that is possible and is consequently making housing
| unaffordable. Depriving the government of the authority
| to do that is a viable mechanism by which that form of
| corruption /inefficiency is avoided.
|
| > And then you have industries which simply can't be
| allowed to be privately owned unless there is extensive
| regulation (because free competition is almost impossible
| in those sectors): utilities, banking, transportation
| etc. sometimes even telecom (e.g. roaming fees in the
| EU).
|
| But even in these industries the necessary regulation is
| narrow and should be directed to isolating the natural
| monopoly from any other offering, e.g. roads are a
| natural monopoly but vehicle manufacturing isn't, so the
| government provides roads but the private market provides
| cars.
|
| Conversely, the US has last mile ISPs providing phone and
| TV service, which _isn 't_ adequately isolating the last
| mile and then we get regulatory capture and corruption.
| It's not obvious they should even be providing transit,
| rather than having an entity that narrowly maintains the
| fiber in the street and does nothing else.
|
| You're certainly right that it isn't just a matter of
| "more regulation" or "less regulation", but it _is_ a
| matter of _removing_ many of the existing regulations
| because they specifically are the source of the high
| costs and market concentration.
| germandiago wrote:
| > There is no such thing as "without regulation"
|
| No need to take my words literally. I you will, favor
| natural right and yes, put a bit of something on top. But
| this is not happening clearly. There is a lot of
| subsidizing and regulation. They are giving, literally,
| prizes to people that do nothing and punishments to
| people that kill themselves working. On the way, they
| have been swapping incentives from working hard to not
| work.
|
| This in itself is a problem. Currently I see democracies
| as giant clientele systems. I am not far from the truth
| at all I think, at least in the case of my country
| (Spain).
| jltsiren wrote:
| "The government" is a fictional entity. In reality, it's
| just a bunch of people.
|
| I think the real issue is that free markets and free
| speech are not really compatible. If people are allowed
| to express political opinions, some opinions will
| inevitably become popular. Sometimes that happens because
| people don't like the outcomes of the market. Then they
| try to change things by regulating the market. Repeat
| that often enough, and you get more and more regulations
| over time.
| defrost wrote:
| Some would argue that the freest markets _are_ regulated
| to prevent collusion, to ensure free and equal access to
| all relevant infomation, to penalise deliberate
| falsehoods, etc.
|
| Certainly the OG Free Markets that inspired the first
| order _Invisible Hand_ model were.
|
| 'free market' is such a nebulous term, bandied about en
| masse in forums where rarely is it questioned what
| specific type of free market a specific person might
| mean.
| germandiago wrote:
| It is not nebulous actually. We are just playing with
| ideas, and ideas lead to simplification. The idea of free
| market, in principle is lasseiz faire.
|
| Of course most people do not propose that. My idea is
| that, as one spanish philosopher said (taken from Hume),
| that all law (derecho in spanish, not sure if it is
| exactly equivalent for the meaning in english, since the
| law tradition in Spain comes from Roman law), so take my
| translation with a warning. All law can be summarized in
| two premises: 1. "property is not
| acquired or lost by violence or fraud" 2. "Deals
| must be fullfilled. Whoever does not fullfill their deals
| shall compensate to the side fullfilling it."
|
| The rest is not "law" as such. It is ruling,
| administration, and other things, but not "law". It is
| arbitrary in many ways, and I agree this is true for a
| lot of what we see. For example: there are regulations
| for safety that will make people die waiting a medication
| or someone not able to get some transport vehicle for
| short distances, just because it is forbidden. But you
| can always find a reason to regulate. OTOH, you regulate
| the choices and lives of others, do we really have the
| right to decide for others? I think that is a very
| paternalistic view of things. But not only that, it often
| promotes irresponsibility in action: since they regulate,
| they can be blamed, I do not need to decide. I have seen
| lots of that attitude at least in my country.
|
| It also promotes more scarcity and leads towards
| oligopolistic setups. It is a complex topic, but I favor
| freedom and responsibility over regulation clearly, as
| long as you do not damage others. In fact, regulations do
| damage others but people often take them for their
| intentions and not for their results ... something that
| is a big shocking to me. It is like it gives them peace
| of mind even if the reality has nothing to do with the
| effect they are expecting or imagining.
|
| The translation could be pretty bad, so I apologize for
| that. I just hope it is understandable.
| germandiago wrote:
| As such we must be very aware of your first sentence. It
| is really important that people understand that those who
| manage us are people like us with their own set of
| interests.
|
| Some people think it is something like an overload that
| takes the perfect, most fair decision and, on top of
| that, without room for mistakes.
|
| Looking at the results I would say it does not respond to
| that premise at all.
| germandiago wrote:
| As such we must be very aware of your first sentence. It
| is really important that people understand that those who
| manage us are people like us with their own set of
| interests.
|
| Some people think it is something like an overlord that
| takes the perfect, most fair decision and, on top of
| that, without room for mistakes.
|
| Looking at the results I would say it does not respond to
| that premise at all.
| germandiago wrote:
| > So for example, a free market doesn't need zoning
| density restrictions. Their absence has no apparent
| mechanism that would lead to a monopoly. Therefore, a
| freer market in which the government has no power to
| impose zoning density restrictions is better than the
| current one in which that is possible and is consequently
| making housing unaffordable. Depriving the government of
| the authority to do that is a viable mechanism by which
| that form of corruption/inefficiency is avoided.
|
| This is so well expressed. I take it for the future.
| Concise and clear. This is exactly the kind of things
| that come to my mind.
| germandiago wrote:
| I jsut know that compare to 30-40 years ago we have been
| following this path of increasing regulations and the
| results are starting to be harmful.
|
| However, some people ask for _more_ of this, instead of
| less. It is curious when the solution to a problem is
| throwing more of the problem at it. If it was a
| transition period of some kind where the effects of some
| policies cannot be seen yet... but it is years and years
| and years. The result is high debt and collusion, or that
| is more of what I see around me, in all Europe. It is a
| chain of favors and they regulate more and more aspects
| of our lives, yet we are not better. We pay more, the
| services are not better either.
|
| I think something is broken here and I am very aware that
| the result is not giving more control to regulators to
| even smash us more. It is quite the opposite: leave
| people alone. At least, this is my experience right now.
| I can assure that 25 years ago my country had much more
| balance in most areas and people were more free. I am
| almost 41 FWIW.
| sofixa wrote:
| Your whole premise is wrong. Billionaires (equivalent,
| obscenely rich people) predate regulations. As a matter of
| fact, both initial regulations on business and socialism,
| communism, syndicalism directly came as a result and
| backlash of abuse of rich owners.
|
| Also, you're under the naive assumption that lacking
| regulations, companies will want to compete. Why wouldn't
| they just form oligopolies/monopolies? Either due to
| natural restrictions (e.g. competing in infrastructure is
| way too expensive, usually), or the richest company/private
| equity buying up all the competitors to have a free hand at
| abusing the market.
| daedrdev wrote:
| The housing crisis is caused by government policy voted in by
| locals who dont want their neibhorhoods ti change so block
| new housing that would lower prices. Which can just as easily
| happen in a Socialist country since I assume there is still
| democracy and people havent somehow changed to not be NIMBYS
| ffgjgf1 wrote:
| It's the opposite. In the 60s and 70s many western countries
| were semi-socialist. Just look at Britain, the state owned a
| significant proportion of the industry, housing etc. the unions
| were extremely powerful (by modern standards). Same in other
| European countries.
|
| Arguably the US was generally much more left leaning than now,
| even somebody like Nixon might struggle passing off as a
| moderate/rightwing Democrat let alone a Republican just based
| on his domestic economic policies...
| sofixa wrote:
| Individual companies being owned by their employees isn't
| socialism. For that matter, the Soviet Union wasn't socialist
| either - the workers owned nothing, the state owned everything.
| All the land, all the factories, all the manufactured goods.
| oleg_antonyan wrote:
| Yep, that's what it leads to. But it all began with "good"
| intentions. They destroyed well-developed empire, took the
| land from the rich and see where it all now. Trust me, you
| don't want "to take money from the rich and spread them
| across poor" in USA, it sucks
| https://en.wikipedia.org/wiki/Dekulakization. Pleas, keep
| being a place where anyone can build a unucorn company and
| become rich af
| sofixa wrote:
| > But it all began with "good" intentions. They destroyed
| well-developed empire
|
| The Russian empire wasn't well developed by any stretch of
| the imagination.
| Miner49er wrote:
| > Individual companies being owned by their employees isn't
| socialism.
|
| Actually, yes, this is the literal definition of socialism.
| It's workers owning the means of production.
| sofixa wrote:
| Not individual companies, but at the wider scale. Socialism
| is an economic system, not the specific act of one group of
| employees owning where they work.
|
| In the same way that China having private companies doesn't
| make it capitalistic.
| TomK32 wrote:
| The Soviet Union was just the same old russian feudalism with a
| new name tag and leadership. In a sense even modern-day
| russians are still not emancipated citizens like we are in the
| West.
| b800h wrote:
| Absolute rubbish.
|
| This is a classic trope of the fully-brainwashed. The bread
| queues that resulted from collectivised agriculture that
| couldn't respond to market conditions had nothing to do with
| feudalism.
|
| The mass-murder of the middle-classes in Cambodia had nothing
| to do with feudalism.
|
| Communism is a brutal, oppressive system that has to erase
| individual liberty in order to force people to comply with
| its absurd, unfair rules. If it was so great, why didn't the
| Russians just vote it back in again?
| croisillon wrote:
| they wrote "same old russian feudalism" and "still not
| emancipated citizens" and you non-sequitur it with "if it
| was so great"..?
| b800h wrote:
| Fair point - my argument is that it added a load of
| additional garbage on top. It clearly didn't achieve
| anything substantially positive, and it hasn't done
| anywhere it's been tried.
| croisillon wrote:
| i agree with that and i believe the person you answered
| to agrees as well
| b800h wrote:
| I'm not so sure. Sounded like apologism to me, which is
| dangerous, frankly.
| eru wrote:
| 'Real Socialism has never been tried'?
| defrost wrote:
| Did the Soviet Union ever actually practice effective social
| policy and embrace control from the lowest working level or did
| they just run with epilet backed dull grey committees with a
| promise they'd eventually get to _actual_ socialism and
| communism post Stalin and all that not socialism stuff?
|
| I'm no fan of the USSR but they're arguably no more socialist
| than the National Socialism of the Nazis.
| Shihan wrote:
| Yeah, communism hasn't been really tried yet - let's try it
| again, I believe this time it will just work out.
|
| On a sidenote, please read "The Gulag Archipelago".
| dennis_jeeves2 wrote:
| >actual socialism
|
| And what is actual socialism? Perhaps more importantly how
| will you enforce it?
| uxcolumbo wrote:
| How do you define socialism? I think it's one of those terms
| that people define differently for themselves.
| jltsiren wrote:
| This sounds like actual socialism. The kind of socialism that
| seeks to abolish private property and the concept of
| ownership. Only personal property remains, and workers
| controlling the companies they work in as a natural
| extension. It may not be intended to be socialism, but it
| would lead to socialism if universally adopted.
|
| On the average, when someone says "socialism", it's intended
| to be an insult. It also serves as an indicator that the
| person is not interested in having a real discussion. But
| this is not it. This is real socialism. The kind of socialism
| that died as a mainstream option in Europe with the USSR, but
| which is still somewhat popular in the US.
| uxcolumbo wrote:
| That sounds like concentrated power in a hands of a few
| people, government officials who decide what's what. This
| leads to oppression. And central planning for everything is
| definitely bad. Plenty of examples from China and former
| Soviet block.
|
| Our current system (which is not true capitalism in my
| view) also has concentrated power in the hands of a few
| people.
|
| So what do you call a system where the majority of people
| can't be exploited by the 1%?
|
| I like Carl Sagan's answer to this topic.
|
| https://www.youtube.com/watch?v=rDK2chgNPZM
| DemocracyFTW2 wrote:
| A finely balanced, thought-through commentary if I've read one
| /s
| Murky3515 wrote:
| >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."
| seanmcdirmid wrote:
| People are lazy. You can always sell your grant as you get it,
| they can't make holding stock mandatory, but a lot of people
| (including me) just hold the stock in a really undiversified
| portfolio.
| Murky3515 wrote:
| So they're too lazy to buy stock when they get paid, but not
| too lazy to sell stock when they get paid?
| oneshtein wrote:
| This will tank price of shares.
| eru wrote:
| Huh, why, how?
| HelloNurse wrote:
| Of not traded shares that don't really have a price?
| eru wrote:
| Well, there's still a bid and an ask quote on the market,
| even when no trading is happening?
| eru wrote:
| > You can always sell your grant as you get it, they can't
| make holding stock mandatory, [...]
|
| They can. It's easy in private companies to limit what an
| employee can do with their stock, and in public companies
| they can insert a clause in the contract to that effect just
| fine. Or just have very long vesting periods.
|
| (Of course, as a would-be employee I would take these
| restrictions into account when deciding where to work.)
| sofixa wrote:
| Not every public company pays its employees in stocks/stock
| options/RSU/etc.
| dan-robertson wrote:
| If the company is public, one can simulate the scheme by
| buying their stock, I guess. Taxes may be different and
| phrased like that, it seems weirdly risky to buy more of the
| thing you're most exposed to (if the company lays you off,
| the stock may be down too).
| glandium wrote:
| > if the company lays you off, the stock may be down too
|
| Don't most layoffs make the stock go up?
| AnthonyMouse wrote:
| Layoffs generally imply the company is contracting rather
| than expanding.
| Jensson wrote:
| Depends on if you are cutting fat or cutting muscle.
| AnthonyMouse wrote:
| The Iron Law of Bureaucracy implies it's usually the
| second one though. If the company isn't already dying
| then the insiders will fight against cuts until it is.
| vineyardmike wrote:
| TLDR: Research says no
|
| Some companies experience short-term improvements in
| price as their costs drop, but usually it has a longer-
| term impact on morale and productivity that takes longer
| to play out. Additionally, layoffs are typically
| performed on unhealthy companies (eg. _not usually_
| companies like Google and Meta that print cash and have
| huge margins), and unhealthy companies typically have
| other secular or structural issues beyond too-many-
| employees.
| jrflowers wrote:
| 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.
| stavros wrote:
| > If stocks were only a proxy for money and nothing else the
| example would be spot-on
|
| They are, in the modern startup world that HN is mostly in.
| That's why commenters here don't remember there are voting
| shares.
| coderatlarge wrote:
| What are some corporate votes that you feel wider employee
| ownership would have improved?
| stavros wrote:
| Laying off 10% of the workforce because the company isn't
| growing fast enough and then giving the CEO a bigger
| bonus.
| psd1 wrote:
| Lindy Fiorentina fucking up HP. Boeing all over. I'd hope
| to see employee-owners counteract short-termism
| Gormo wrote:
| Can you elaborate on how shareholders having a say in
| governance relates to worker compensation? Why _shouldn 't_
| shareholders have control over governance?
| greycol wrote:
| They shouldn't have complete control over governence
| because, especially in larger businesses, the shareholders
| are less invested in what a business does than the
| stakeholders.
|
| A classic example would be an employee forced to work in an
| unhealthy manner. If the cost of replacing the employee
| when they're worn out is less than the extra profit made by
| causing the employee to work in that manner it might be the
| right form of governance for shareholders. Even if it would
| not be profitable if the health costs weren't externalised.
| phkahler wrote:
| 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.
| Gormo wrote:
| 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?
| talldatethrow wrote:
| The company I work for sucks. I rather take more cash and just by
| stocks in companies I believe in more.
| teaearlgraycold wrote:
| Why not work for a company that sucks less?
| twelve40 wrote:
| That's beside the point: the idea of hedging your bets has
| its place. You already sink 8 hours every day into one
| company, it makes sense to invest parts or all your
| compensation into other things instead of dumping it all into
| the same company. Unless you are balls-to-the-wall bullish on
| this one business.
| eru wrote:
| Perhaps talldatethrow believes that his employer sucks as a
| business, because they are overpaying workers?
|
| Or when I was working for Google in the mid-2010, I thought
| Google was a great company and I liked working there; but I
| also thought that their stocks were probably overpriced.
| (These days, I guess Tesla or Nvidia might fill that role for
| some? These are just examples, I have no opinion on them.)
|
| In the other direction, one can love Amazon as both a
| customer and a shareholder, while simultaneously not wanting
| to work there.
| knifie_spoonie wrote:
| Not everyone has that luxury
| morning-coffee wrote:
| That ignores the costs (time spent) of finding another
| company and assumes one has information to conclude that it
| does indeed suck less without actually having the experience
| of working there to know.
| loa_in_ wrote:
| Ultimately I don't decide what company I work for, but others
| do
| talldatethrow wrote:
| 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.
| germandiago wrote:
| I disagree. This is a matter of contract between sides.
| Terr_ wrote:
| > 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 market-defined rate.
| (Arguably a form of stock-buybacks by the company.)
|
| However that _does_ sidestep the other tricky problems of taking
| money from retired employees (via diluting their stock) to award
| an ever-growing pool of shares to current employees every month.
| phkahler wrote:
| 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.
| Gormo wrote:
| 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?
| xmprt wrote:
| I 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 paid $34M in 2024.
| infotainment wrote:
| It's so bizarre, considering that the modern CEO's only job is
| to issue meaningless positive statements to shareholders.
|
| If you look at many top CEOs resumes, they are almost always
| devoid of any real experience. People talk about replacing
| various jobs by AI, but I'm pretty sure an LLM could replace
| most CEOs and no one would notice.
| cess11 wrote:
| It's someone who can take blame to protect branding and is
| easily replaced.
| infotainment wrote:
| Exactly; is someone who is essentially a replaceable
| scapegoat really worth millions per year in salary?
| cess11 wrote:
| Sure, if it allows owners to stay in control and keep
| profiting from the people that perform the labour in the
| organisation.
|
| It's someone you can pin board and shareholder decisions
| on, as well as changes in market and accidents, that just
| goes away and lets some other people keep their power and
| profits instead of being accountable for their mistakes
| or lack of strategic performance.
| klipt wrote:
| But if it were just that, plenty of people would be
| willing to take the blame for less money.
|
| I think the problem is you have to hire someone highly
| qualified and with relevant experience to at least _show_
| you 're doing due diligence, and those people aren't
| cheap.
| cess11 wrote:
| It has to be someone who looks somehow impressive, it
| can't just be a random homeless person doing it for a
| meal, that would look like the enterprise is doing
| something criminal.
|
| Pay plays a part in that, it signals that the person is
| extraordinarily competent and all around great and
| important.
|
| In large corporations CEO:s aren't very important, it's
| just one person who mainly collects and structures
| information from people closer to the work and makes
| public appearances on behalf of the corporation and does
| paper shuffling required by the state and so on. It's not
| rocket surgery. Using this person to protect the
| reputation and image of shareholders and the board as
| well is a 'no-brainer' decision to make if your interests
| are well served by it.
| dash2 wrote:
| I very much dislike these threads where two people act
| like sockpuppets of a single not-very-advanced llm,
| agreeing with each other's views which are invariably
| exaggerated, uninformed and cynical. I've been seeing
| more of them recently; if you see one, downvote it.
|
| American capitalism has lots of problems. The idea that
| CEOs "almost always" have no real-world experience is
| hardly worth arguing against: "almost always" is
| meaningless rhetoric and "real-world" likewise (what
| counts as real-world experience for Google? WPP? Northrop
| Grumman?). Jensen Huang is mentioned literally at the top
| of this thread and is an obvious counterexample.
| cess11 wrote:
| Sorry, I don't mean for my views to hurt your feelings.
|
| I find it obvious from the context that they were
| referring to celebrity CEO:s in global corporations and
| not Mom or Pop in some small mom-and-pop corner store.
|
| When I look at en.wikipedia on Huang it seems he
| graduated into a managing role and then founded Nvidia.
| By "real-world experience" I'd mean experience as a
| worker, but I can't answer for the person you're actually
| quoting.
|
| However, it's an interesting example. Clearly Huang has
| managed to promote an image to you that is very different
| from mine. As I see it, Nvidia is a main supplier of
| hardware for globally fashionable grifts and scams, like
| large portions of so called 'crypto' and 'AI'. I also
| expect Nvidia to be an important supplier in the war
| industry, and I'm sure it is in surveillance tyranny.
| dash2 wrote:
| Huang started as a chip designer and then founded a
| company developing chips. What other kind of work
| experience would be relevant? AI contains scams, but also
| obviously important real progress; your points about war
| and surveillance are pure mood affiliation and irrelevant
| to the topic at hand.
| cess11 wrote:
| Production of chips, for example. One could argue that
| design is a form of administration rather than work.
|
| I'd say so called AI is largely a scam. It's wobbly
| databases with non-deterministic query languages dressed
| up as a substitute for intelligence. Email is similarly a
| scam. Through mail you send someone an item, which might
| or might not have some script on it. Email is very
| different, and it's largely used for spam, even though
| the name seems to say it is very similar. Is this what
| you call progress?
|
| No, I'm pointing out that Nvidia are supplying criminals
| and tyrants with the tools they need for their abusive
| and oppressive activities. I do not expect your mood to
| change from having this pointed out, rather the opposite,
| I expect you to already be somewhat aware of it.
| Personally, I try to avoid doing business with such
| people, and I would prefer to not be dependent on their
| enablers, though that is almost impossible for systemic
| reasons.
| proteal wrote:
| Scam is doing a lot of heavy lifting here, no? If by
| scam, you mean that a large volume of the "work" enabled
| by these tools is not productive to society, then fine, I
| think what you say follows. However, there's a lot of
| good work that is done with email and other tools you
| mentioned. For every good email I send, there might be
| 100 spam emails, but the drag from the spam on society is
| surely much less than the value of my "real" email.
| Furthermore, the technology is an improvement over snail
| mail for many use cases. I agree that the jury is still
| out on whether or not AI is as good as imagined, but it
| seems overly pessimistic to entirely discount a new
| technology that has been at least personally useful to
| me. If we were to really run with this definition of
| scam, we'd soon realize that all technology is a scam. So
| why even get up in the morning? Might be a simpler life
| to mail bombs and rot in prison at that point...
| SkiFire13 wrote:
| To be fair if I were to be a scapegoat for Boeing there's
| no way I would do that for cheap.
| cootsnuck wrote:
| When company valuations are fundamentally based on "faith
| to perform well", yes. It's a product of touting a
| speculative economy as one of "rational actors". CEOs
| function as mythological heroes more than anything. So
| there's no number too high to pay since even their defeat
| can be incorporated into the ongoing myth of the brand.
| It's very strange to me.
| bpodgursky wrote:
| I don't want to be rude but you have no idea what you are
| talking about and clearly have 0 insight into the day-to-day
| of an actual CEO. It's fine to argue that a particular CEO is
| underperforming, it's often true, but very few of them are
| "underworking" by any reasonable definition.
| gardenhedge wrote:
| Empty rebuttal. Consider adding more substance to your
| comment. As a reader I have no idea which of you is
| correct.
| earnesti wrote:
| CEO's definitely are underworking. Maybe not CEO's of
| publicly traded companies, though.
| cess11 wrote:
| Arguably CEO:s are administrators, not workers.
| roughly wrote:
| How's this for a definition: the average CEO gets paid 350x
| what the average worker gets paid, so unless they're
| generating 350x the value of the average employee, they're
| underworking.
| EnigmaFlare wrote:
| If they have 350 employees, then they double the
| company's profit, I suppose they just generated 350x
| times the value of an average employee. If they have more
| employees, they only need to increase it a smaller
| proportion to be generating 350x as much value.
| lesuorac wrote:
| Doubling profit is relatively easy.
|
| If you have 10M of revenue and 9.5M of expenses then an
| increase of 500k in sales doubles your profit. Given that
| everybody in the company is needed (for sake of argument)
| to produce the initial 10M I wouldn't say that the CEO
| inking a new sale for 500k is worth the entirety of the
| original company.
| overrun11 wrote:
| Your example assumes 100% gross profit margins which is
| unlike any company I've ever heard of.
| carlosjobim wrote:
| Yes, if the 350 employees kept working the same as usual,
| and the only thing that changed was something the CEO
| did, not anything he ordered the employees to do.
| high_na_euv wrote:
| Hint: impact
| jandrewrogers wrote:
| The average CEO in the US gets paid FAANG SWE wages, per
| the US government's own data. Cherrypicking a handful of
| highly compensated CEOs out of the tens of thousands of
| large corporations in the US is misleading at best.
| Workaccount2 wrote:
| CEO's get paid by shareholders, workers get paid by
| companies.
|
| The money that workers bring into a company is often not
| being used at all to pay these CEO's. It's why so many
| CEO's have $0 salary or $200k salary.
|
| It's a critical distinction because it clears up so much
| confusion people have about this topic. Those 300x
| multiple stories you see are almost always comparing two
| completely different income sources. You can almost think
| of it like a 3rd party is paying the CEO to run the
| company.
| s1artibartfast wrote:
| It is very easy to generate 350x value.
|
| If you get 1% more work out of 350 people than the
| alternative.
| s1artibartfast wrote:
| It is very easy to generate 350x value.
|
| If you get 1% more productivity out of 35,000 people
| _than the alternative_ you have done it.
| psychoslave wrote:
| There are things that needs inner insights to understand
| and conclude anything meaningful. And there are things that
| can be judge by external insights alone, or even only from
| external point of view not being embedded in the system
| internal consideration while trying to emit the judgement.
|
| We don't need deep packet inspection to spot a very out-of-
| the-chart huge traffic.
|
| We don't need micro-details of an economical agent actions
| to spot an anomaly in wealth distribution.
| consteval wrote:
| I would wager you could replace the CEO with a cardboard
| cutout and none of the employees, who actually produce the
| product which makes the company money, would notice.
|
| You could probably get away with it for months, honestly.
| pie_flavor wrote:
| If it's so easy, why aren't you doing it? Presumably it
| requires some amount of investment to break into, but with
| such a high upside it's still massively +EV.
| Peritract wrote:
| Some people want to do work they find meaningful.
| paxys wrote:
| Then why complain about how much someone else is getting
| paid?
| Peritract wrote:
| The parent comment isn't complaining about the amount
| CEOs are paid, but the amount they are paid relative to
| the value provided.
| pydry wrote:
| I dont know why on earth youd assume that the
| executive/board/CEO club is meritocratic or that it would
| be open to talented outsiders.
| maximus-decimus wrote:
| The job being easy to do and the job being easy to get are
| two completely different things.
| pie_flavor wrote:
| So how are new ones minted?
| consteval wrote:
| By luck and status. Right place right time. They have
| some experience, and they just so happen to know X, Y, Z
| (probably because their dad knew X-1, Y-1, Z-1 and so on)
| so they get in. Maybe they went to harvard or something.
| dheera wrote:
| > Even Jensen Huang, CEO of Nvidia, is "only" being paid $34M
| in 2024.
|
| 26.6M of that was stock. In percentage terms it's just equity
| that he effectively handed out before as a founder and is
| getting back in return for growing the company even more. I
| don't see a problem with it, considering that the median
| employee takes almost zero risks and can leave whenever they
| want.
| TechDebtDevin wrote:
| Investing your talent and time in a company is a potential
| risk.
| chii wrote:
| an employee is not taking risk "investing in time" in a
| company, because they are paid wages for it.
|
| If it were the case that employees need to put in capital
| into the business before being employees, then it would be
| a different story. In fact, those schemes exist - they're
| called MLM, or multi-level-marketing schemes, where you pay
| the company upfront to buy the product, and try to sell it
| at a profit (like herbalife), and try to recruit on behalf
| of the company!
| RicoElectrico wrote:
| No, the risk for regular employee is higher due to downside
| vs upside. Once you cross some wealth threshold, it's not
| possible to lose _everything_ (e.g. become homeless) unless
| you do something deliberately stupid like gambling or drugs.
| There 's always plan B if you're rich. Like, rent out
| property or something.
| dheera wrote:
| The risk for a software engineer at any of the big tech
| companies is extremely low if you have some common sense
| level of financial literacy.
|
| If you're an engineer at Nvidia you'd have to do some
| braindead stupid things with your money to end up homeless.
|
| Also, if you have technical skills at a level that Nvidia
| would hire you, you can easily get a job at probably a
| thousand other companies. Layoffs are a non-issue.
| Recruiters will be scrambling to hire ex-Nvidia folks in
| the event of a mass layoff, barring a major global
| financial collapse (in which case you're still better off
| than 95% of the population).
| lnsru wrote:
| Thanks for writing this. Owning a place to live and couple
| rental properties makes one economically independent.
| Leaving a toxic workplace means loosing fancy car and
| canceling expensive vacation. Loosing job before that
| wealth threshold means homelessness and poverty.
| dheera wrote:
| > Leaving a toxic workplace means loosing fancy car and
| canceling expensive vacation.
|
| > Loosing job before that wealth threshold means
| homelessness and poverty.
|
| No, it doesn't. Maybe don't borrow money and buy a fancy
| car and vacations you can't afford? Buy a normal car with
| cash and go on normal middle-class vacations?
|
| If you work in an mid-level engineer capacity at a FAANG
| or Nvidia in the Bay Area you can easily live on 1/3 of
| your take-home compensation (that's including a normal
| car, a couple economy-class vacations a year, and a
| modest apartment) and invest the rest in index funds.
| Within a few years of working, you would have banked
| enough to have a decade worth of expenses saved before
| you'll be homeless, and I'm sure you can find another job
| in that decade.
|
| I work at a big tech company, my (very normal) car cost
| me 1/10 of my annual take-home salary, I've never flown
| anything but economy class, and I save 60-75% of my take
| home pay and invest it. I can't afford rental properties
| or any of that, but I _do_ have enough funds to last me
| several years at my current lifestyle.
|
| Back when I was at startups (including co-founding one),
| I was never able to save more than a few months' worth of
| emergency fund, and that was not good for my mental
| health. That's one of the reason I joined a big tech
| company for now -- to de-risk myself financially.
|
| Startups are financially FAR higher risk. You'll get 1/4
| the pay that Nvidia gives you, the equity may end up
| being worth $0, and if it does end up being worth $0,
| you'll have missed out on the opportunity cost of being
| hired at any of the FAANG companies for whatever time you
| spent there.
|
| I'm not discouraging anyone from doing a startup, but it
| IS higher financial risk in every way.
| throwaway2037 wrote:
| Wow, 60-75% savings rate is incredible.
| > I can't afford rental properties or any of that
|
| Why not? Combine a 10% down payment and a bank loan. You
| can definitely afford it.
| dheera wrote:
| In my book, borrowing money to buy something I don't have
| the cash for does NOT mean I can afford it.
|
| Back in the days when I didn't have money to buy a car
| with cash, I just didn't buy a car and used a bike and
| public transit to get everywhere.
|
| I mean, maybe that's why I have a high savings rate.
| robertlagrant wrote:
| > No, the risk for regular employee is higher due to
| downside vs upside
|
| People start businesses and actually risk everything they
| have on them. If you only look at someone who owns and runs
| the biggest company in the world, you're just using the
| apex fallacy[0] to justify your perspective, and hoping
| nobody notices.
|
| [0] https://rationalwiki.org/wiki/Apex_fallacy
| rendaw wrote:
| What risk does Jensen Huang take and why can't he leave
| whenever he wants?
| sgammon wrote:
| Are you kidding?
| rendaw wrote:
| IIUC you think it's obvious but it's possible it's not
| obvious or that different people have different views on
| it, all of which they consider obvious.
| sgammon wrote:
| It's an honest question.
| freilanzer wrote:
| If I earn 30 million a year, I have next to no risk and
| can retire anytime I want. Hell, I could retire after the
| first quarter.
| dheera wrote:
| Do you realize that for the first N years of Nvidia, he
| probably made less than minimum wage, AND had immense
| responsibilities on his back to try to get the company to
| profitability? That's the risk.
|
| He's getting a 30M paycheck today only because he built a
| trillion dollar company from nothing and sacrificed the
| job opportunities he could have had at other companies
| for three decades.
| mnau wrote:
| Past is irrelevant. He too the risk and got handsomely
| rewarded for incredible success as he should.
|
| But that is his stock he kept from founding the company.
| Not today.
|
| He should of course still be CEO of Nvidia and get the
| money(stock awards), because unlike others, Nvidia
| execution is excellent (see market cap) and has been for
| decades, but that is not really any risk for him
| personally.
| dheera wrote:
| What do you have against him?
|
| I say give him the 30 million dollar package because he's
| the only guy I can think of that has hope of turning NVDA
| into a a 10 trillion dollar company in a few years and I
| can't think of any other CEO that would do better than
| him.
|
| And sure, maybe at that point his comp will be 300
| million, that's fine, my NVDA stock will 10X as well and
| I'll be more than happy.
| freilanzer wrote:
| Do you realise that CEOs don't all start at a company
| from day 1 and instead get hired and immediately have a
| huge salary?
|
| According to Wikipedia:
|
| As of 2024, Huang has been Nvidia's chief executive for
| over three decades, a tenure described by The Wall Street
| Journal as "almost unheard of in fast-moving Silicon
| Valley".[14] He owns 3.6% of Nvidia's stock, which went
| public in 1999.[5] He earned US$24.6 million as CEO in
| 2007, ranking him as the 61st highest paid U.S. CEO by
| Forbes.[5]
|
| This should tell you all you need to know.
| fuzzfactor wrote:
| >CEOs don't all start at a company from day 1 and instead
| get hired and immediately have a huge salary?
|
| With 20/20 hindsight which seems like the better path
| now?
|
| >This should tell you all you need to know.
| charlieyu1 wrote:
| He is giving a ton of business to Taiwan. That's probably
| enough personal safety risk.
| brightlancer wrote:
| > considering that the median employee takes almost zero
| risks and can leave whenever they want.
|
| This is an important point that is often ignored.
|
| Within the past week there was a thread about "How to get
| paid FAANG money at non-FAANG companies", and someone
| mentioned starting your own business -- which folks
| (correctly) pointed out involved risks and time that most
| folks don't want to take.
|
| (Also, it's always funny on HN when someone sarcastically
| talks about a CEO "only" being paid an absurd amount of
| money, when almost all of us are getting paid multiples of
| the median salary, plus whatever annual bonuses and stock.)
| _thisdot wrote:
| Counter point. Most of salary is decided based on how much of a
| loss it would be if you left. A CEO leaving a company can
| immediately lead to serious consequences whereas an individual
| employee can leave and no one might bat an eye
| anigbrowl wrote:
| True, but that's partly because power is excessively
| concentrated in executive officers and as a group of people
| they are (imho) excessively invested in leadership rhetoric
| that leads them to develop misconceptions about their
| contribution to the firm's success. Not wholly unlike ships'
| captains, when they're doing their job job well they're
| mostly just keeping an eye on things and while the execution
| is delegated across the organization. When they mess up it's
| catastrophic.
|
| This is not to say I don't think CEOs do any work. They may
| make major contributions in terms of developing strategic
| plans, communicating them to staff and inspiring them to
| carry them out well, negotiating with allies, outmaneuvering
| competitors, and balancing the conflicting imperatives of
| operations, finance, security, legal and so on. But they're
| not compensated for labor so much as given (via negotiation)
| a commission on profits, revenue, stock price movement or
| suchlike. Inevitably there are conflicts of interest with
| shareholders, staff, and customers, and as a class CEOs and
| other high level executives seem to have tilted the tables
| more and more in their favor over recent decades.
| aziaziazi wrote:
| > A CEO leaving a company can immediacy lead to serous
| consequences
|
| Is it something that has been study or observed? Most company
| are resilient enough to handle the leaving of an individual,
| being a Chief or not. The opposite would be a flag for an
| instable company.
|
| Far tangent exemple: Belgium without government.
| _thisdot wrote:
| I'm looking at this from a casual stock market perspective.
| If I came to know the CEO of the company is unhappy and
| planning to leave, surely I expect the stock prices to take
| a hit. And the recovery will mostly depend on their
| successor and is altogether an expensive exercise
| s1artibartfast wrote:
| I dont know, transitions can easily cost many millions of
| dollars of swirl when our director changes. They only lead
| 100 people, in a small part of a large company but we spin
| up and cancel projects with 250 million dollar budgets.
| Change in leadership and direction is expensive. Bad
| leadership and direction is expensive too. greenlighting
| one more/less wasteful project pays for many years of CEO
| salary.
| creato wrote:
| Hiring a Boeing CEO must be pretty hard right now because
| whoever takes the job is signing up for some miserable work
| (like testifying to a hostile congress and dealing with
| criminal liability on behalf of Boeing), and is likely to be
| blamed for decades of mismanagement coming to the surface now.
|
| Said another way: I'd demand a lot more in compensation to be
| CEO of Boeing than NVIDIA (or any other role for that matter).
| vkou wrote:
| > because whoever takes the job is signing up for some
| miserable work
|
| I'm ready to do it for a mere 5 mill/year (less than a sixth
| of the incumbent), and I'll happily take all the blame for
| all my predecessor's failings, and more.
|
| Will I do a worse job than the incumbent? Maybe, maybe not,
| how the hell will anyone know?
| eru wrote:
| Please feel free to make your pitch to whoever is in charge
| of hiring CEOs at Boeing.
| robertlagrant wrote:
| I disagree that everyone is equally suitable for every job.
| Why should someone pay you PS5m? What would you do better
| than anyone else?
| consteval wrote:
| They don't need to be better. In fact they just need to
| be 1/5th as good, and then it's worth it. That's the
| whole point here - CEOs aren't paid proportionately like
| you or me.
| jacknews wrote:
| boohoo.
|
| I'll take the role for a wildly discounted $20m.
|
| It would be hard to do much worse than the recent incompe ..
| uh, incumbents.
| coderatlarge wrote:
| Whoever takes that job is also potentially signing up for
| years of litigation against them personally. 2k/hr lawyers
| for years add up fast :)
| aziaziazi wrote:
| Do you mean miserable jobs should be paid more than easy one
| ? There's a bunch of position salaries to reevaluate in the
| world...
| Stealthisbook wrote:
| It helps that board members are often fellow CEOs or members of
| multiple other company boards. They have an incentive to
| negotiate high pay packages and shareholders in general get
| presented with a yes/no question
| dclowd9901 wrote:
| They are ok with it because they believe there's a correlation
| between how well a company is doing and how much they pay their
| CEO.
| flanked-evergl wrote:
| They are OK with it because they are not paying any attention
| and their voting rights are managed by companies like
| BlackRock who has a list of priorities from here to the moon
| that come before profit.
| lynx23 wrote:
| "Who watches the watchers" is what it comes down to.
| Politicians, Executives... I once heard politicians need to
| earn a lot because otherwise they wouldn't be politicians but
| executives, who earn even more.
| roenxi wrote:
| I doubt they are happy as much as disinterested. The economy
| has been heavily financialised, interest rates have been at 0%
| [0] and a big chunk of economic activity is government
| spending. Shareholders don't appear to be worried about how the
| company actually runs in the details. What matters is that the
| CEO is positioning them to tap in to the money printing and
| borrowing game. IE, the wages suggest workers don't really
| matter because they don't. Profits will come from things like
| being in Crypto or AI booms at the right time.
|
| It isn't the be all and end all, but I'd rather be a
| shareholder in, say, a military production company with solid
| government contacts & contracts than one with capable workers.
|
| [0] Thank goodness that has finally changed but there is a bit
| of a lag while everyone catches up to the new normal.
| graemep wrote:
| I was going to say this. In addition to what you say a lot of
| shareholders are in i for the short term. They are interested
| in what the share price will do in the short term.
|
| Directors remuneration mostly decided by other directors (and
| just approved by shareholders who are not bothered), who tend
| to take the view that it is worth paying directors very
| highly.
|
| Its something that has got worse, but its not new. As GK
| Galbraith said "The salary of the chief executive of a large
| corporation is not a market award for achievement. It is
| frequently in the nature of a warm personal gesture by the
| individual to himself."
| robertlagrant wrote:
| > "The salary of the chief executive of a large corporation
| is not a market award for achievement. It is frequently in
| the nature of a warm personal gesture by the individual to
| himself."
|
| The board decides the CEO's salary, no?
| adrian_b wrote:
| The board members are frequently CEOs of other companies,
| where the CEO whose salary is decided may be a board
| member.
| robertlagrant wrote:
| Can you cite this, please?
| AnthonyMouse wrote:
| More to the point, Boeing's revenue is over $16 billion. Some
| tens of millions are a rounding error when it's only being
| paid to one person, and that is the real source of the
| disparity. Paying one CEO $32 million is two tenths of a
| percent of their revenue. If they tried to pay each of their
| 170,000 employees even 1% of that, it wouldn't be 0.2% of
| their revenue, it would be >300% of their revenue and they'd
| be out of business.
|
| This, in turn, is caused by the size of the companies being
| so large.
| alan-hn wrote:
| Why on earth would you pay each person 16 million per year?
| That's 1%
|
| You can still make everyone's wages better without paying
| millions to each person and definitely not to the CEO
| eru wrote:
| > The economy has been heavily financialised, interest rates
| have been at 0% [0] and a big chunk of economic activity is
| government spending.
|
| If you want to be dramatic: we had negative real interest
| rates for a long while.
|
| Nominal interest rates were close to 0% and inflation was
| positive.
|
| > Shareholders don't appear to be worried about how the
| company actually runs in the details.
|
| And shareholders who are interested get vilified as activists
| or short sellers.
|
| > IE, the wages suggest workers don't really matter because
| they don't.
|
| The labour share of GDP has been mostly stable for the last
| few decades between 55 to 65%-ish See
| https://fred.stlouisfed.org/series/LABSHPUSA156NRUG
|
| Profits have also been fairly stable as a share of GDP at
| around 5-10%-ish:
| https://fred.stlouisfed.org/series/W273RE1A156NBEA
|
| Just to be clear: going up or down by 5% of GDP is a lot in
| absolute terms, but not enough to justify hyperbole about
| "workers don't matter".
| bell-cot wrote:
| But Jensen Huang is both (1) extremely technically competent,
| and (2) a founder of Nvidia.
|
| My sense is that both (1), and the (1) && (2) combination,
| correlate fairly strongly with accepting a more-modest pay
| package. Such people seem to actually care about the
| organization. Or appreciate that others are doing 99.9% of the
| work. Or lack "the usual" pretend-to-be-emperor-while-looting-
| Rome sociopathy. Or something.
| pjc50 wrote:
| The limit case is of course
| https://www.forbes.com/sites/antoniopequenoiv/2024/06/13/tes...
|
| It's difficult to understand pay of that size on a rational
| level. That represents individual shareholders voting for a
| significant dilution just to retain an extremely controversial
| celebrity CEO at a time when sales are falling.
| https://www.theguardian.com/technology/article/2024/jul/02/t...
|
| I see this kind of thing more as "how much the CEO is allowing
| himself to steal from the till because there's nobody above
| him" most of the time. Except in this case the shareholders
| really did make an expensive choice.
| renewiltord wrote:
| Worked out for me. I bought a bunch on the last time everyone
| claimed Tesla was dead and then voted to keep Elon. Up 28%.
| Everyone's got theories. I prefer money. What use are your
| theories if they don't predict the outcome.
| strikelaserclaw wrote:
| This phenomenon is a function of attributing all the positive
| developments within a company to the C-suite executives. Just
| as shareholders profit from the productive work of many
| employees, the C-suite executives often receive credit for the
| achievements of a large number of people. I think it is related
| to a fundamental characteristic of humans, that being we can't
| understand information unless it is calculated into simpler
| versions ( concepts like medians, averages, variance, "who is
| the best", "who is the worst", "who is the most evil", "who is
| the least evil" all come out of the same human need to get
| simplified answers). When credit and information moves up up
| the funnel from employees to c - suite, it gets - credit gets
| assigned at higher and higher levels. It is not team xyz that
| did it, it is their manager, or their manager's managers until
| it gets to the ceo who only knows that "svp x was responsible
| for this successful product launch" - since the people at the
| top determine pay scales, if theres 10-20 million to pay out in
| terms of increments, the board rewards the ceo with 10 million
| because he is apparently responsible for ALL the successful
| product launches, the ceo decides to reward svp with 2 million
| increment etc... It truly does pay to sit at the table with the
| decision makers.
| joker99 wrote:
| I don't consider this being a bug. The big issue is: while
| they get the praise, they reject or pass on the blame to the
| employees.
| strikelaserclaw wrote:
| It is not the same thing but probably related to whatever
| mechanism in the brain causes
| https://en.wikipedia.org/wiki/Out-group_homogeneity - The
| people in a position of power regularly interact with the
| ceo, so they can see all the nuances that go with that but
| to most people at the top, "employees" is a homogenous
| bunch of replaceable cogs.
| Workaccount2 wrote:
| CEO pay, like in the case of Boeing, is borne by shareholders,
| not the company itself.
|
| It's chronically repeated as if companies are robbing salary
| coffers to pay exorbitant CEO compensation. But that is not
| true. It's Boeing shareholders forking over $34M, not Boeing
| inc.
| AndrewKemendo wrote:
| Which is precisely the point the article is making
|
| If the CEO works for the shareholders because they are part
| of the investor class, they aren't prioritizing workers or
| customers - and we all know at this point that improving
| service isn't part of increasing profit
| Nifty3929 wrote:
| Higher corporate taxes create a discount on worker pay,
| including executive pay. Basically if I pay a worker $100, that
| reduces my taxable income by $100, which saves me $35 in taxes,
| so my net profit goes down only $65.
|
| There was also a law passed in the '90s that forced executives
| to have more skin in the game in the form of stock - which
| caused companies to give executives a lot more stock.
| everybodyknows wrote:
| What did he do worse in 2023? Recall that Calhoun was brought
| in only _after_ the MAX crashes, ostensibly to clean up after
| multiple decades of short-termist mismanagement by his
| predecessors.
| CivBase wrote:
| 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.
| hgyjnbdet wrote:
| I suppose a side effect might be employee loyality, which might
| be a good thing. And the wealth disparity we have now is obscene.
| But all this is predicated on the company doing well, where's the
| story about the companies set up like this that struggle or fail?
| Are the employees worse off than those in a traditional company?
| eru wrote:
| Wealth disparity is a function of overall worker comp, but it
| doesn't matter whether you force companies to pay part of that
| comp in shares instead of cash.
| chii wrote:
| what the proposal for employee ownership _actually_ want to
| achieve is for the existing owners to have part of their
| ownership reliquished (without much, if any, compensation),
| and given to the workers.
|
| AKA, the workers do not take on the prior capital risk that
| the owners have, but reap the rewards of success. Obviously,
| a failed company means no such shares given to the workers
| (by definition). Therefore, under this imagined scenario, the
| workers only gain.
|
| of course, reality cannot work like this.
| eru wrote:
| Yes, that sounds closer to what the proposal seem to amount
| to.
|
| But it doesn't make much sense: just because I work at
| Google (which is worth a lot per employee) I don't deserve
| more re-distribution than someone manning the cashier at eg
| WalMart.
|
| If you want to re-distribute, I would suggest to tax the
| owners and hand money to the people, regardless of where
| they work.
| thriftwy wrote:
| This means you will need to invest capital when joining.
|
| Imagine a bus drivers cooperative. The pay will be nice but the
| downside that you have to show up with your own bus to join. And
| then probably be indebted to a bank.
|
| If a company is owned by employees, where does the capital come
| from?
| maximilianroos wrote:
| How are you going to finance a capital-intensive business from
| employees? Are you going to build a nuclear reactor with sweat
| equity?
| konschubert wrote:
| How about every employee instead gets money every month, and then
| can go out an buy shares in any company they want, their own or
| others?
| ossobuco wrote:
| How does that work when 60% of Americans are living paycheck to
| paycheck?
|
| When you're not sure if you'll manage to pay the electricity
| bills to keep your fridge turned on, is your first thought
| going to be "let's invest in the market!"?
| TechDebtDevin wrote:
| Peasent brain, they think they too can be rich like their
| corporate owners one day so they will support them and
| justify this brain rotted thinking until they die poor.
| eru wrote:
| Interpreted charitably, you are making an argument that
| people's comp should be higher.
|
| But I don't see any argument that paying that higher comp in
| the form of shares instead of in the form of cash is any
| better?
|
| (Unless you want to imply that people are too dumb and need
| to be protected from themselves, and that why we need to give
| them more stocks instead of more cash? Or something else?)
| ossobuco wrote:
| > Interpreted charitably
|
| No need for your charity, thanks. I'm simply making the
| argument that you must live in a bubble if you think that
| enough people have the excess liquidity and market
| knowledge for this to be an applicable solution to the
| general population.
|
| > Unless you want to imply that people are too dumb and
| need to be protected from themselves
|
| Not being wise in the markets != being dumb.
|
| Protected from themselves? No, protected from speculators
| and exploiters.
| eru wrote:
| Nudging people to own a substantial chunk of their net
| worth in one single company protects them from
| speculators and exploiters? OK..
| ossobuco wrote:
| When the alternative is owning no chunk of any company?
| Yes, still orders of magnitude better.
|
| Nothing prevents people from investing also in other
| companies if they feel like. Or are you implying they are
| "too dumb" to consider the possibility?
|
| Shared ownership also protects employees from speculative
| decisions like mass layoffs made only to give more value
| to shareholders. It also prevents the alienation of
| working on something you don't own and gives a strong
| incentive for everyone to give their best.
| its_ethan wrote:
| > Nothing prevents people from investing also in other
| companies if they feel like
|
| I thought you just said that this isn't a viable option
| for most people? Now it is on the table?
|
| > are you implying they are "too dumb" to consider the
| possibility
|
| For what it's worth, reading through this thread, it
| seems like _you_ were the one who claimed most people don
| 't have "market knowledge"...
| nitwit005 wrote:
| I presume it'll work exactly as well as paying them partially
| in stock, as the stock and cash are interchangeable.
|
| The people who need money now will just sell the stock as
| soon as they can.
| konschubert wrote:
| If they are really living paycheck to paycheck, giving them
| shares in the company instead of paying them isn't going to
| help much either.
|
| Or are you suggesting that employees just get a fixed share
| when they join the company? That model exists, but it
| typically only works for companies that need no outside
| capital to get started. Like law firms.
| lennixm wrote:
| People need to stop using this stat. It's completely useless.
| There are literally people making top percentile incomes
| saying they're living paycheck to paycheck in these surveys
| because they interpret the survey questions wildly different
| than other people. A tiny, tiny percentage of Americans would
| literally go hungry if they didn't get their next month's
| paycheck the rest would have to cash out some small
| percentage of their S&P 500 ETF.
| lynx23 wrote:
| In genera, "self reporting" needs to be viewed as the
| untrustworthy statistics it is. I hear it a lot recently in
| the social siences. And media happily parrotting the
| results, as proof of whatever they are currently trying to
| push. I wonder how much of these self-reported issues would
| be seen in a completely different lens if those asked were
| forced to discuss their answers within a certain peer
| group. "What, you say you're poor, with that car and that
| house?"
| fuzzfactor wrote:
| Also consider that some of the respondents are actually
| "bragging" about living paycheck-to-paycheck so they
| don't seem any poorer than anybody else, when they are
| actually not even sustainable and deeply know they are
| heading downward toward bankruptcy or something like that
| unless things look up.
| ossobuco wrote:
| > A tiny, tiny percentage of Americans would literally go
| hungry if they didn't get their next month's paycheck
|
| "71.93% of Americans Living Paycheck to Paycheck Have
| $2,000 or Less in Savings"[0].
|
| So no, it's not a tiny percentage. $2k or less in savings
| means being one emergency expense away from not being able
| to pay rent or your house loan next month.
|
| - [0]: https://www.forbes.com/advisor/banking/living-
| paycheck-to-pa...
| Sankozi wrote:
| This only shows how big economic illiteracy is. Not how
| much people are earning vs the cost of living.
| ossobuco wrote:
| The personal savings rate has slowly halved over the past
| 60 years[0].
|
| Did everyone become illiterate or maybe the inflation
| rate has exceeded the growth rate of wages[1], among
| other things?
|
| What's funny is that on two comments rejecting my
| argument one accuses me of considering people "too dumb"
| to take their own financial decisions, the other tells me
| people are actually too dumb and that's why they are in
| financial trouble.
|
| - [0]: https://tradingeconomics.com/united-
| states/personal-savings
|
| - [1]: https://www.epi.org/publication/charting-wage-
| stagnation/
| Sankozi wrote:
| The article you linked mentions "Lack of budgeting and
| financial planning" and "Social pressures" for reason of
| living paycheck to paycheck. And those are self reported
| values.
|
| Last 60 years we experienced enormous growth of
| advertising - is it really hard to believe that many
| people are having big problems with limiting their
| spending.
| aziaziazi wrote:
| > Economic illiteracy
|
| I respect your opinion but the stats presented before
| does not "shows" illiteracy but low investments. Lack of
| liquidity to invest seems a very plausible raison because
| a revenu threshold has to be passed to be able to buy
| food before founds. This stat is probably almost a proxy
| for how many Americans are below that threshold.
| Sankozi wrote:
| It is really hard to believe that 71.93% of Americans are
| on the verge of homelessness and starvation. Much more
| plausible (and even mentioned in the linked article under
| "Lack of budgeting and financial planning" and "Social
| pressures") are just bad habits.
|
| Of course there are economic literate people who really
| are struggling, but I doubt they make even half of those
| 71.93%.
| philosopher1234 wrote:
| In this case you are revealing your own (statistical)
| illiteracy. It's referring to 70% of people who claim to
| be living paycheck to paycheck, not 70% of all people.
| nec4b wrote:
| >> "71.93% of Americans Living Paycheck to Paycheck Have
| $2,000 or Less in Savings"[0].
|
| It's a meaningless statistic. They can still have high
| net worth and/or large incomes even if they don't keep
| cash on hand.
| ossobuco wrote:
| Well it might please you then that about 50% of the
| respondents report low income as the cause for living
| paycheck by paycheck. Even more report high monthly bills
| as a cause.
|
| Just read it, it's all in there.
| nec4b wrote:
| People thinking their income is to low is not exactly
| news. I haven't personally met anyone who would ever
| claim their income is to high. Why do you think I haven't
| read it? Do you always agree with everything you read?
| ossobuco wrote:
| I believe you didn't read it because your argument is
| quite poor and doesn't mention some relevant points the
| article makes.
|
| I may not always agree with everything I read, but at
| least I take the time to read it before openly
| disagreeing with it.
| Gormo wrote:
| I'm confused about that figure, since not having any
| savings to fall back on seems to me to be the definition
| of living paycheck-to-paycheck. How is that not 100%? The
| argument you're making seems tautological, and doesn't
| really account for the elasticity of people's spending
| habits, or the income ranges they fall into in the first
| place.
| TechDebtDevin wrote:
| Why not both? The author hasn't given any indication that the
| equity given to employees is subsidizing their wage.. It seems
| like yourself and others are just arguing against a company
| providing bonus compensation to workers for their work. Peasent
| brain has grown far and wide these days. Keep slaving away for
| less compensation, I'd rather not.
| eru wrote:
| They can give a cash bonus just as well.
|
| There's two questions: how much comp to pay, and how to
| divide that comp between various forms. They are nearly
| independent of each other.
| dclowd9901 wrote:
| Notably this is how we've been doing things and... notably, the
| chasm of pay is growing wider all the time.
|
| So maybe time to re-evaluate the status quo?
| swagasaurus-rex wrote:
| Shares of the company they work for would incentivize them to
| care about the company.
|
| Shares of other public companies means no skin in the game. A
| day trader cash out whenever they want and wipe their hands
| clean of any adverse effects made by the company in the name of
| growth.
| eru wrote:
| The day trader needs to find a greater fool for that to work.
|
| Shares prices already reflect an estimate of the long running
| fate of the company.
| konschubert wrote:
| It's true, which is why I think it's good to make shares part
| of the compensation.
|
| That being said, employees already have skin in the game
| because they want their company to survive so they keep their
| job. When a company goes belly up, employees with shares are
| worse off than those that bought shares in other companies
| instead.
| lolc wrote:
| The reason I own shares of my company is that I want to
| have a say in where it goes. Profit sharing is a nice side
| effect.
| lynx23 wrote:
| Nah, that would be a crazy idea... :-( In general, this article
| leaves a taste of communism in my mouth. I already said
| elsewhere, pay me fairly or go away.
| yamumsahoe wrote:
| it's a no for me.
|
| it's like the idea of taxing the rich. it sounds great until you
| become one of those rich people.
|
| this idea sounds great until you become a founder or an investor
| yourself.
|
| these are laws, systems, and regulations that sets the first
| movers and real builders apart from the average laymen. all comes
| down to risk/reward incentives.
|
| it's poor people telling the rich how to spend and allocate their
| money. the rich people will just say "the fuck do you know about
| it?"
| daedrdev wrote:
| If you have every company owned by its employees, it can cause
| big problems for society. There are many arguments to make, such
| as how investment and hiring would decrease but an interesting
| one is that it prevents people from de risking their savings.
|
| Normally, if your company goes under your savings which are
| invested in a wide range of companies will be fjne. But since we
| cant invest in other companies your savings are the ownership of
| your company. When when it goes under your life is ruined enron
| style.
|
| Its fine to do this if you want, but if this compnay in the
| article goes under, those people will have lost millions. And
| dont force me to be an owner, I really dont want to be one and
| resent people who want to force me to own part of the company I
| work for.
| sgu999 wrote:
| Your savings don't need to be tied to the stock market, it's
| actually not the case for most people outside of the US afaik.
| Your retirement pension even more so. How we choose to
| redistribute the extra wealth generated by others is mostly
| political.
| Nasrudith wrote:
| Isn't the case for most people outside the US government
| funded pensions essentially just "the Stock Market but with
| extra steps"? If the market crashes pensioners are going to
| have a bad time.
| sgu999 wrote:
| It's apparently called "pay as you go" in the english
| jargon. Here we call it "repartition" in opposition to
| "capitalisation" [0]: active workforce directly pays for
| the inactive population, in exchange for a future right to
| a pension. Which is roughly what you do with capital-based
| pensions, but with less variability.
|
| [0] https://de.m.wikipedia.org/wiki/Umlageverfahren
| benced wrote:
| Maybe we should create some sort of super-stock that can be any
| company and give employees that. We could also make that super-
| stock valid tender for burritos or houses or bulldozers.
|
| Oh wait, it's money. Fungibility is great!
| gorgoiler wrote:
| I haven't heard of an ESOP before. As I understand it, this is an
| (additional?) pension fund where the value of your pension is
| tied to the company valuation in the form of a promise to sell
| you stock units when you either retire or leave the company.
|
| Sounds like a nice perk to have but one would obviously be unwise
| to rely on that for retirement.
| eru wrote:
| You are better of taking the value of that entitlement, and
| investing it in an index fund or annuity.
|
| Diversification is the one free lunch we have in finance.
| shswkna wrote:
| There are many advantages to having employees own shares in a
| company. However, I would add that it depends on the industry,
| type of company and other circumstances.
|
| These are factors that play a role and should add to a more
| nuanced discussion: - Ownership also implies responsibilities and
| risk. There might be capital risks or surety needed for certain
| industries. Not all people want this in their lives. - For any
| chance of high reward, there is a also a risk of failure/loss.
| This side is often forgotten and a one-sided view of ownership is
| often romanticised. - Thus I think a popular discussion of this
| topic needs to be infused with a more realistic view of reality.
| Guthur wrote:
| What capital risks? Private equity many times purchases a
| company, loads it up with debt, strips it off assets, pay
| themselves fat dividends and then walks away when it all falls
| apart.
| rabite wrote:
| A fracking rig costs 900k and many of them sit idle for years
| at a time:
|
| https://www.csmonitor.com/Environment/2022/0415/Demand-
| for-o...
|
| You are essentially saying that the roughnecks that work the
| rig for $30-40 an hour should be owning it. They don't have
| the capital to own it and pay for the oil rights to use it,
| or the risk tolerance that it will sit idle and still have to
| be maintained, stored in a rented warehouse, and guarded when
| regulation does not allow them to be used. Nor is there any
| evidence they would be able to successfully run an oil
| company even if they were given it for free -- compliance
| issues surrounding commodities deals typically require a
| different skillset than the guy working the rig.
|
| The vast majority of businesses are not software. Virtually
| all industry has capital outlay requirements and capital
| risks equal to or greater to this.
| Guthur wrote:
| This has been debated for 100s of years and the era of
| funny money that is created at the stroke of a key i don't
| see how we can maintain the view that it should be so
| skewed towards capital.
| shswkna wrote:
| That is the "popularised" and one-sided view of reality I was
| referring to. A full set of experiences _will_ give you a
| more nuanced view.
| Guthur wrote:
| That is a reality in can point to many examples. From
| Thames water to Sara Lee in Australia.
| dclowd9901 wrote:
| As a business owner of a small growing business, I don't want
| employees who aren't invested in the company. I think we use
| that same rubric in startups. How is this any different?
| eru wrote:
| Not everyone wants to have a substantial chunk of their net
| worth tied in one illiquid undiversified chunk that's highly
| correlated to how well their job is going.
| peacechance wrote:
| Can someone please share the National ESOP Database?
| marsten wrote:
| My favorite pizza place in Sunnyvale became employee-owned, and
| shortly after decided they only wanted to stay open 3 days a
| week.
|
| I'm happy for those employees but man, I also wish I could get
| pizza on Monday.
| perryizgr8 wrote:
| > I also wish I could get pizza on Monday
|
| In a functional market there would be others willing to send
| you a pizza on Monday.
| KolmogorovComp wrote:
| A neighborhood is not a functional market, because location
| is key and not fungible.
| relaxing wrote:
| Order in advance, keep it in your fridge?
| deepfriedchokes wrote:
| A Slice of New York?
| dools wrote:
| Worker 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
| have to compete with a guaranteed job that is _not_ exploitative.
|
| Let the private sector figure out the details within those
| boundary conditions, that's what it's there for.
| hurril wrote:
| What is gained by preventing the company from accepting more
| money than your revenue cap? It would be bad for everyone. What
| are you trying to optimise?
| dools wrote:
| They can have more revenue than the cap I'm just saying they
| should be publicly listed.
| chii wrote:
| 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.
| hurril wrote:
| 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 job, or are forced
| to have to work for really shitty conditions.
|
| This causes another problem, however. It is very easy to
| get dependant on these hand-outs because the difference in
| pay between the jobs you are able to do and the size of the
| hand-out can be very small. Even negative. We have (had)
| this problem in Sweden for a long time. And it is a problem
| because when people are less poor, then things cost more
| money because of it. Cynical, I know. Economics is very
| very hard.
| eru wrote:
| > 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.
| t-writescode wrote:
| > If they're better, they will be more common
|
| Unfortunately, the word "better" is doing a lot of heavy
| lifting here. Better for the employees is a world of difference
| compared to "better at getting funding to start a business",
| "better at getting Venture Capitalists or Angel Investors or
| Banks" interested.
|
| It takes working two jobs, being independently wealthy or
| getting outside help to start a company, and most of that
| outside help very likely doesn't want employee owned.
| chii wrote:
| may be the word is 'fitter', rather than 'better'.
|
| After all, darwinian natural selection is taking place in a
| free-market economy.
| sgammon wrote:
| Equity is zero-sum. Once you hand it out, it's gone. You can
| create more, but it will dilute everyone else. Not a very good
| arrangement for something that should create value over a long
| period of time.
| eru wrote:
| You know that stock buybacks are a thing?
|
| In any case, things are a bit more complicated.
|
| If the company manages to sell equity at a premium to current
| market prices, existing shareholders benefit, they don't get
| diluted in any absolute sense.
|
| Conversely, if the company does stock buybacks at a premium,
| continuing shareholders suffer.
| sgammon wrote:
| Yes, a thing predicated on cooperation between humans.
| eru wrote:
| Owning their employer is a rough deal for employees.
|
| My career is already tied up to my industry and to my employer. I
| don't need to increase that exposure even more.
|
| I'd rather invest in an index fund, than hold more stocks of my
| employer than I need to. (If anything, I should probably short my
| industry, so that my overall exposure is neutral.)
| amadeuspagel wrote:
| _Production, Information Costs, and Economic Organization_ [1] is
| classic economics paper that explains how different firms are
| structured to align incentives, rather then making claims about
| how _every_ company should be structured.
|
| [1]: https://www.aeaweb.org/aer/top20/62.5.777-795.pdf
| dash2 wrote:
| Employee stock options are not a new idea, obviously.
|
| If the story is "every company should offer stock options to its
| employees", then sure, that's often a good business plan. The
| reason not every company does it to all its employees is probably
| that for those employees, it wouldn't affect incentives much and
| it would make payment subject to the vagaries of the stock
| market. Your barista at Starbucks is not going to increase the
| stock price no matter how well he fills your order; at the same
| time, maybe he wants to know how much he takes home every day.
|
| If the story is "it should be the law that every company offers
| stock options", then that would be a dumb law for the reasons
| above.
|
| If the story is "all companies must be fully employee-owned
| workers' cooperatives", then first, note that you are calling for
| a restriction on workers' rights: they have to be given part of
| their pay as stocks, and they can't sell them freely. Second,
| that will probably make markets work worse. There's a large
| economics literature on this: worker-owned cooperatives have not
| taken over the market, although they are an available
| institutional form, because (a) they find it hard to raise
| capital (b) they tend to make decisions that maximize worker
| welfare rather than profit, e.g. they won't sack underperforming
| divisions or expand in ways that dilute existing workers' stake.
| instagraham wrote:
| For people living cheque to cheque, pre-IPO ESOPS are not
| really a great incentive either. If ESOPS come at the cost of
| actual salary increases, it feels more like a corporate
| smokescreen than an actual value-add (not everyone can afford
| to think long-term with their sole source of income).
| Aissen wrote:
| > Your barista at Starbucks is not going to increase the stock
| price no matter how well he fills your order
|
| But 400k barista all doing it well might.
| vsuperpower2021 wrote:
| This is not tenable. 400k people aren't going to all
| individually work extra hard for starbucks if their own work
| doesn't individually benefit them.
| ErikBjare wrote:
| I think the idea is that feelings of co-ownership in the
| company could affect the company culture positively.
| Although I'm sure the effect diminishes with company size.
| topper-123 wrote:
| True, but could the incentuve be structured around the
| individual employee's coffee shop (which would mean
| divulging the i individual coffee shops financials? That
| could make each employee look better out for the
| profitability of their coffee shop.
| briandear wrote:
| This is precisely the failure that advocates of communism
| fail to grasp. They failed to read their Adam Smith. We saw
| this play out in the Soviet Union.
| bregma wrote:
| The Soviet Union never even attempted communism.
| stavros wrote:
| 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 for
| worker happiness instead.
| vrotaru wrote:
| Stop optimizing for consumers, start optimizing for
| producers.
|
| Maybe, you want to rethink that.
| stavros wrote:
| Why? It sounds good to me.
| vrotaru wrote:
| Just an example.
|
| Should teachers be judged on how a pleasant life they
| live, or how good they teach?
| Qwertious wrote:
| That's not as relevant as you'd think - the "customers"
| of teachers are, arguably, taxpayers and not children.
| Alternatively it's parents, or perhaps politicians who
| set the budget.
|
| Focusing on children is the more pro-social preference,
| but children who attend schools famously don't have jobs
| in functioning societies.
|
| More importantly, the teaching system is basically un-
| incentivized by incentives - teachers in the US (focusing
| just on the US for a sec) are incredibly underpaid, and
| basically rely on masters-degree teachers putting in
| effort completely disproportionate to the pay. Everyone
| accepts this state of affairs specifically _because_ we
| 're all ignoring market incentives in favor of the good
| of society (i.e. the quality of childrens' education).
|
| So, let's suppose we judge teachers based on how well
| they appease politicians and parents who support their
| funding: they pass _all_ students, regardless of how
| poorly they do on tests and how badly the children need
| to just repeat the year. _This is a terrible outcome_ ,
| and yet you're implicitly endorsing it.
| Droobfest wrote:
| Obviously by how well they teach, but if we give them a
| stake in their teaching performance, their teaching
| should improve even more...
| seneca wrote:
| They do have a stake in their performance. It's their
| salary. If their performance is poor, in a functioning
| system they lose that salary.
| vundercind wrote:
| I assure you that being allowed to teach well would
| greatly increase the pleasantness of life for a hell of a
| lot of teachers.
|
| Nobody gets into teaching for the money--and, for that
| matter, there's not a clear connection between doing it
| well and any kind of rewards at all, as it stands.
| chasd00 wrote:
| Teaching is a good example. When you teach in public
| schools which is basically where the "people own the
| means of production" since the school is paid for by the
| taxes collected by an elected government, you're
| absolutely right. No rewards for quality teaching
| basically at all.
|
| However, if you're really good at teaching you can teach
| at a private school and reap a lot more rewards. Better
| pay, better recognition, a better work environment this
| list goes on and on.
|
| /wife is a teacher and has taught in both public and
| private highschool
| vundercind wrote:
| Yeah. Depends--fancy upper-middle-class and higher
| private schools are like that. The majority aren't that
| sort, and both pay and perform on a similar level to
| public schools, if not worse. But the good ones, the ones
| people really think of when they say "private school"
| (but _not_ the actual majority of such schools) do pay
| better and often have really good perks (the PTA-
| equivalent Christmas and end-of-year gifts you get at
| some private schools--damn!)
|
| As a bonus, private schools are usually way more willing
| that public schools to tell annoying parents to get bent.
| Which is a pretty big perk on its own.
| kvgr wrote:
| Good luck producing and not selling.
| Arainach wrote:
| Stop optimizing for financial leeches sucking value out of
| the system and externalizing all the societal consequences,
| start optimizing for the vast majority of the population.
|
| ....sounds better when you elaborate on the categories you
| selected.
| robertlagrant wrote:
| The vast majority of the population are consumers. Each
| of us consumes far more services than we produce. Making
| life better for consumers is making life better for
| everyone.
| tempfile wrote:
| By definition, the average person consumes as much as
| they produce. Generally speaking, the poorer someone is,
| the more they produce relative to what they consume.
| Making life better for producers improves the lot of the
| poor; making life better for consumes improves it for the
| overconsumers (i.e. the rich).
| brabel wrote:
| You're ignoring the proportions. Your happiness is maybe
| 80% related to your job and salary (at least up to a
| point where you can be considered wealthy, after that
| there's decreasing returns), and each product you consume
| from each different company affects your wellbeing by a
| minuscule amount. Even adding them all up won't give more
| than, say, 15% as most of your expenses are not on
| products, but things like housing and transport.
|
| Given that, if you could make everyone's jobs more
| fullfilling and increase people's salaries at the cost of
| things costing a bit more, you would definitely increase
| overall wellbeing. People would afford a small amount
| less, but that would not impact them significantly, or
| maybe at all.
|
| The problem I see is that in global competition, you may
| be put out of business by countries that give much less
| shit about worker's wellbeing because people will still
| spend almost all their money on the cheapest available
| option (even more so if they can afford less!), and that
| IMHO explains why American companies have taken over so
| many markets overseas (and now, China seems to be doing
| it even more). When that happens, everyone in the country
| loses. So there needs to be a balance, which I think
| Europe is doing more or less well: people still have
| great working conditions but can afford less than in the
| USA, where people have very near the worst possible
| working conditions (nearly no vacation mandated by law,
| no parental leave, no healthcare except for the best
| jobs), but can buy more useless stuff.
| mantas wrote:
| EU is on the same path. Actually even worse with over-
| the-top ecological requirements. Making it harded for
| local businesses, while making trade deals with iffy
| countries left and right. For now it's rolling on selling
| assets to China or US. But obviously that's not
| sustainable long term. Either we need to protect our
| internal market and tax the crap out of imports, or the
| party will be over.
| Qwertious wrote:
| >Actually even worse with over-the-top ecological
| requirements.
|
| That seems hard to judge in the short term - if in 50
| years some economically-critical ecosystem collapses like
| the north atlantic fisheries did, they will have been
| absolutely necessary in retrospect.
| mantas wrote:
| No matter what ecological requirements would EU impose on
| local businesses, the rest of the world would happily
| pollute to cover its part. And eu itself would by that
| stuff. Point in case - fertilizers. EU regulations for
| fertilizer plants are getting stricter and stricter.
| Local produce prices are sky-high, especially after cheap
| gas was cut off. Yet imports from Russia (!!!) are
| massive.
| davidcbc wrote:
| Given that wealth is continually being concentrated
| towards the very rich I don't think this is accurate. As
| a whole the working class is producing more value than
| they are consuming, but the excess is going to the rich
| not those producing the value
| fuzzfactor wrote:
| >Each of us consumes far more services than we produce.
|
| Speak for yourself, not everyone is in debt all the time,
| and some never in debt whatsoever even when they have no
| unusually above-average earnings.
|
| But as part of a vast majority, you are as correct as
| possible.
|
| Then again capital _is_ just plain Other Peoples ' Money,
| and you can't be a capitalist without capital, no matter
| how much you wish it was true.
|
| One problem with housing is that real estate has
| investment potential but for decades it has been too
| expensive for average people. Debt is crafted to barely
| make it possible to get into a property, and you may do
| well if values increase but there is an entire system in
| place so that others profit more from the same piece of
| property than you. Vehicles are another high-dollar item
| where debt is usually incurred, but these almost always
| depreciate fast. You can draw the line there and be
| pretty realistic, but there are plenty of people who are
| at the extreme where everything that costs money is
| borrowed.
|
| So that's about as close to capitalist as most people
| get. That's about all of OPM they have at their disposal,
| and the only thing invested in that has upside potential
| is the home. For those fortunate enough to have gotten in
| when it was more within reach. And there can still be a
| gradual spiral downward which is too slow to notice until
| it's too late.
|
| Sometimes it helps to do the math and not be afraid to
| admit how far from capitalist you actually are compared
| to how capitalist everbody _thinks_ they are.
|
| Disclaimer: this article was DOA & flagged instantly with
| zero comments, but it seemed OK to me and I vouched and
| now look at it. Nobody's fault but mine.
| aziaziazi wrote:
| Company profits is not always aligned with consumer
| interests, didn't understand why you switched them.
| Gormo wrote:
| Not always, no, but as the general case, they are. At the
| end of the day, people need to be willing to pay a
| business in exchange for its goods and services, and if
| they don't feel like they are obtaining net positive
| value from the transaction, they won't be.
| JohnFen wrote:
| > if they don't feel like they are obtaining net positive
| value from the transaction, they won't be.
|
| Excepting for the cases where people have no other
| choice.
| consteval wrote:
| I think key word here is "feel". The reality is that
| modern products are absurdly complex, and consumers truly
| don't know what is (and isn't) worth their money. Which
| is why marketing, making people "feel" a certain way, is
| SO important. Maybe even more important than the product
| itself.
|
| I mean, do you know how any of your food is produced? If
| you wanted to verify that the ingredients are what they
| say they are, can you? If you're buying a car how
| confident are you the transmission is reliable? Do you
| actually understand how the transmission is designed
| OR... is it just brand name? It's brand name, right.
|
| Ultimately companies don't need to, and are better off
| not, producing high quality and safe goods. It makes much
| more sense to produce lower quality goods and reinvest
| the savings into advertising. The consumer won't know the
| difference, and they couldn't find out even if they
| wanted to.
| jandrewrogers wrote:
| Everyone is both a producer and consumer, these are not
| different groups of people. While production is a
| prerequisite for consumption, producers have interests as
| consumers.
| kerkeslager wrote:
| Well, it sounds like a step up from most companies, which
| is don't optimize for consumers, don't optimize for
| producers, optimize for shareholders.
| devnonymous wrote:
| Yep! ..and when workers are owners, optimizing either ways
| works !
| konschubert wrote:
| Except for the part where the company gets outcompeted and
| goes bankrupt.
|
| And no, we cannot just outlaw competition. Having an
| efficient economy is important and valuable because it
| allows us to have a higher standard of living while putting
| in less work.
| Nevermark wrote:
| Nobody suggested outlawing competition, or made any
| points that would imply anything related to that.
| consteval wrote:
| They get outcompeted because worker-owned companies
| aren't allowed to be leeches. You can't have your workers
| own negative shares.
|
| But, many companies (especially those really competitive
| ones!) just... don't make money. It's easy to be a big
| disrupter like Uber when you make -500 million dollars a
| year for 15 years. Naturally that wouldn't when you
| aren't on capital welfare.
| robertlagrant wrote:
| How does this work in practice, though. It's easy to say what
| you're saying, or go slightly further and say "let's stop
| optimising for work and start optimising for everything to be
| free".
|
| What's the actual plan?
| stavros wrote:
| I'd encourage you to Google for some articles on how
| worker-owned coops stay in business. This isn't a radical
| new idea that's never been tried.
| robertlagrant wrote:
| Obviously they exist. But they are only certain types of
| business. How is a company that requires hundreds of
| millions of dollars before it's profitable supposed to be
| a co-op? Step by step?
| Nevermark wrote:
| It would be nice to have a legal framework for companies
| to increase employee ownership, but be able to do it
| incrementally with no requirement to go straight to 100%.
| Or ever.
|
| For instance, even public companies might increase the
| percentage of employee ownership over time.
|
| But capital needs could still be met, as the public or
| private non-employee stock class would still exist.
| robertlagrant wrote:
| But it would be nicer if everything were free, though.
|
| Why would an investor invest in a company that, if it
| fails, they lose their money, and if it succeeds, their
| ownership is taken away?
| Nevermark wrote:
| Nobody "takes" ownership.
|
| Owners are bought out. For a public company that just
| means buying back shares.
|
| A company whose employees care very much about share
| price sounds good to me. It is not much different from
| companies who let employees "take" options.
|
| That could be financially mismanaged too.
|
| There would need to be a rational structure.
| robertlagrant wrote:
| > For a public company that just means buying back shares
|
| But in practice, what does it mean? Do you want to make
| illegal a shareholder selling when they want to? They
| have to sell at whatever the price is when the company
| needs their shares?
| vidarh wrote:
| Plenty of companies at various times have shareholder
| agreements that make it a _breach of contract_ to sell
| shares, or that regulate conditions under which you can
| be dragged along on a sale on terms you have no say in.
| It affects risk, and so will affect your ability to raise
| funds on those terms but structuring it ways that allows
| the company to buy back but ensures an investor or lender
| with shares as security will get sufficient profit
| potential to outweigh the risk is still entirely
| possible.
| kaibee wrote:
| Companies can issue new shares to dilute existing
| investors. I feel like on HN of all places, this should
| be common knowledge? Like, this is literally the scheme
| under which every tech company already operates, and yet
| on HN of all places some of ya'll can't conceive of a
| system where employees automatically get some stake in
| the business?
|
| It would be straight forward to require companies over a
| certain size to issue and distribute some number of
| shares based on current pay to employees. Existing
| shareholders will have their stake diluted but are
| welcome to buy more shares on the market while employees
| are welcome to sell or hold. If the investors are
| actually good at allocating capital, they should have
| plenty of profits from previous investments to maintain
| their % ownership despite the share inflation. If they
| aren't, then they should find a different job.
|
| Under this scheme, Bezos would still have become a
| billionaire, and we know this because Amazon and tech
| companies already do this exact thing by offering stock
| options!
|
| And the neat thing is, when a company does a stock-
| buyback, this is literally the same giving a dividend of
| the profits to employees.
| robertlagrant wrote:
| > Companies can issue new shares to dilute existing
| investors. I feel like on HN of all places, this should
| be common knowledge? Like, this is literally the scheme
| under which every tech company already operates, and yet
| on HN of all places some of ya'll can't conceive of a
| system where employees automatically get some stake in
| the business?
|
| I know you said "literally", so all bets are off in how
| you'll parse a reply, but yes, I do know about share
| dilution. You're describing practically the same thing.
| You want people to risk all their capital, and if the
| business does well you auto-dilute them. That's fine if
| it's what they signed up for, but it will have a chilling
| effect on investment.
|
| > Under this scheme, Bezos would still have become a
| billionaire, and we know this because Amazon and tech
| companies already do this exact thing by offering stock
| options!
|
| Again, the "literally" made it clear that this wasn't
| going to be great, but you're committing the apex
| fallacy. If you only consider the highest of high
| performing companies in how your instincts guide you,
| you're going to commit some very obvious errors.
| trinsic2 wrote:
| Here is an article on ownership and one viewpoint that I
| support on why it's broken
| https://blog.alexewerlof.com/p/broken-ownership
| vidarh wrote:
| There are multiple legal frameworks for that. The
| simplest way is to "just" have the company buy back
| shares and re-issue them to staff over time. Depending on
| jurisdiction there can be more tax efficient ways. Some
| places it may be more practical and/or tax efficient to
| use trusts (e.g. the John Lewis Partnership in the UK,
| with 80,000 employees, is a trust for the benefit of
| employees - it means shares can't be cashed out, but all
| present employees share in dividends) and sell or give
| shares to the trust bit by bit.
| Gormo wrote:
| > It would be nice to have a legal framework for
| companies to increase employee ownership, but be able to
| do it incrementally with no requirement to go straight to
| 100%. Or ever.
|
| But this framework exists, and is used by a huge number
| of firms.
| robertlagrant wrote:
| "Legal framework" is a euphemism for "mandate by force".
| Of course companies do this today, as you say. The
| commenter wants to force them.
| aleph_minus_one wrote:
| > How is a company that requires hundreds of millions of
| dollars before it's profitable supposed to be a co-op?
|
| People and organizations who talk about social welfare
| (e.g. unions) should put their money where their mouth
| is, and do the seed investments.
| Narhem wrote:
| Companies should see employee's as stock. Optimizing for
| anything else would be short sighted.
| kerkeslager wrote:
| That's quite the slippery slope argument you've got there.
| dash2 wrote:
| Better still, optimize for social value provided. If taxes
| and regulation are right, companies that provide social value
| will make profits and their owners will get rich. The
| proposed changes would make that less likely to happen. If
| nothing else, (a) individual companies all optimizing their
| own workers' welfare does not add up to optimizing the
| welfare of all workers and (b) non-workers are left out of
| the equation.
| kerkeslager wrote:
| As opposed to now, when non-executives and non-shareholders
| are left out of the equation...
| jjmarr wrote:
| This is the purpose of the mixed economy in which most of
| us live. The government changes the rules of the game to
| try to align the profit motive with social good, because
| they are naturally not aligned.
|
| You haven't said _why_ worker cooperatives optimizing the
| benefit of their own workers wouldn 't add up to more
| welfare if the entire economy was based around worker
| cooperatives.
|
| in my opinion worker ownership of the means of production
| is just socialism, and that doesn't have a good historical
| track record.
| malcolmgreaves wrote:
| > good historical track record
|
| Please cite some sources that are not communist
| countries. You know, "just socialism."
|
| You way want to also ignore the existence of Norway, much
| of Europe, and popular US federal programs too when
| you're doing this exercise.
| blackhawkC17 wrote:
| Norway has more billionaires per capita than the USA.
|
| It's not socialist in any sense. It's a diehard
| capitalist country with a lot of public services and
| welfare (funded by taxes generated under a capitalist
| system).
| trinsic2 wrote:
| Exactly. Sick of people applying the catch-phrase
| "socialism" to everything to marginalize a method of
| community good.
| jjmarr wrote:
| "Every company should be owned by its employees" is the
| definition of socialism, which is social ownership of the
| means of production.
|
| https://en.wikipedia.org/wiki/Market_socialism
|
| Specifically this is market socialism.
| trinsic2 wrote:
| I don't give a fuck with the definition is. Its not
| helpful to this discussion, move on.
|
| Our world is being destroyed by capitalism, maybe its
| time to try something else.
| qwytw wrote:
| > Our world is being destroyed by capitalism, maybe its
| time to try something else.
|
| Well.. same could be said about "democracy". Despite its
| many inherent flaws (and even a more non inherent ones)
| free market capitalism has been the main driving force
| behind human progress for hundreds of years.
| consteval wrote:
| I would argue capitalism just so happened to be our
| method of progress. It was more so humanities newfound
| like of education and reasoning that did it. Or,
| conversely, the decline of religion in the state marked
| when things started to look good for humanity. And then
| it's a pretty clear graph where less religion = more good
| from then on until now.
| qwytw wrote:
| > I would argue capitalism just so happened to be our
| method of progress
|
| Personally I strong believe that (free) competition was
| the actual real "force" behind it. It just happened that
| capitalism (however flawed) provided the best environment
| for incentivizing individual and groups to compete in a
| "productive" way, accumulating capital in a reasonably
| regulated and fair way, instead of treating the world a
| zero sum game (i.e. in premodern societies usually the
| only real option you had if you wanted to gain
| significant wealth besides inheriting it was taking it
| from other people through force or coercion). Stable
| legal, societal, economic environments (also things like
| patents, copyright etc.) created ways to reward
| innovation and other societally productive enterprises.
|
| When I say "fair" I of course mean it in relative terms
| (and even then that limited "fairness" was almost
| exclusive restricted only to members of your own
| society). But it was a huge improvement over arbitrary
| despotism, societal and economic, instability and various
| misaligned incentives that preceded it (e.g. possibly why
| the Roman empire didn't really progress past the "proto-
| capitalist" stage).
|
| IMHO Socialism and similar systems have a major flaw
| (besides the fact than they can't really exists without
| excessive coercion) in that they stifle competition and
| don't tend to incentive/reward behaviors leading to
| growth and innovation.
|
| Not that monopolistic-corporations etc. are any more
| likely to behave any differently without strong
| incentives, or that non-profit/government funded/etc.
| organizations can't produce anything innovative or
| societally beneficial or are somehow inherently worse at
| that than profit seeking companies (often the opposite).
| However again they need incentives to not consume/waste
| all the resources they get without providing anything in
| return and the need to compete (or lose funding/end up
| privatized) with the private sector often (again in
| relative terms, compared to any alternative systems I can
| think off) provides those incentives.
| xeromal wrote:
| Your comment seems unnecessarily hostile
| qwytw wrote:
| > Sick of people applying the catch-phrase "socialism"
|
| People claiming that
| https://en.wikipedia.org/wiki/Social_market_economy is
| "socialism" are not any less silly.
| jjmarr wrote:
| I'm more interested in hearing _why_ the above post and
| the examples you 've cited fixed the problems that others
| have encountered in the socialism space.
|
| If this was a startup trying to make worker owned co-ops
| more attractive I'd see a blog post explaining how they
| fixed the problems everyone else was having. That, and
| explanations of how this scales to an entire society.
|
| That's the standard of discussion for everything else on
| this site and it shouldn't disappear because the subject
| is socialism.
| qwytw wrote:
| Please list any countries are are "just socialist" not
| communist. If we're compared hypothetical systems vs
| actual real-world ones it's not exactly fair.
|
| > existence of Norway
|
| Which is certainly not a "socialist" countries, unless
| you define socialism in extremely broad and ambiguous
| terms at which point the word losses any meaning.
|
| https://en.wikipedia.org/wiki/Social_market_economy isn't
| socialism by any reasonable definition. Unless you think
| Bismarck was a socialist...
| wkrsz wrote:
| Would those companies be able to compete in a global market?
| anentropic wrote:
| It's in the employees self-interest for that to be so
| arrowsmith wrote:
| Overoptimize on worker happiness -> underoptimize for profit
| -> company goes bust -> workers lose their jobs -> no worker
| happiness
| stavros wrote:
| Well, there are worker-owned coops, and they haven't gone
| bust, so how does that work? It's almost as if the workers
| _don 't actually want_ to lose their jobs!
| MichaelZuo wrote:
| Survivorship bias. You have to compare against all that
| have in fact gone bust over the same timeframe.
| dukeyukey wrote:
| If anything, co-ops seem to survive better than
| traditional companies -
| https://www.uk.coop/sites/default/files/2020-10/co-
| operative...
| MichaelZuo wrote:
| Did you reply to the wrong comment?
| _s_a_m_ wrote:
| That's the cliche, and I dont think it's even remotely
| true.
| vidarh wrote:
| Last time I looked at data, worker coops were less likely
| to fail than most other corporate structures.
| Jensson wrote:
| Most worker coops doesn't optimize for worker happiness,
| they are like any other company, just like how communism
| doesn't optimize for worker happiness either.
| vidarh wrote:
| Doesn't generally seem supported by data.
|
| E.g. https://www.fiftybyfifty.org/2021/06/workers-at-
| cooperatives...
|
| Elsewhere I've seen _some_ reporting on cooperatives
| report lower satisfaction on _some_ metrics, usually
| suspected to be exactly because worker cooperatives tend
| to give employees more of a stake and so stress levels
| around the future of the business may be higher.
|
| At the same time, it is flawed to focus on any purported
| notion that they don't optimize for "worker happiness"
| because workers decide what they optimize for. And so
| that may or may not be "happiness" for any given coop,
| but it certainly does mean optimizing for what workers
| _care about_.
|
| Comparing that to, I presume the notion of e.g. the
| Soviet Union as representative of "communism", where
| workers had near no say in what the dicators imposed on
| them, seems to be a rather crass and gross
| misrepresentation when used as a comparison for workers
| coops where they _do_ have a say.
| ClumsyPilot wrote:
| > just like how communism
|
| There is some kind of derangement in the English speaking
| West, any attempt to reign in power of capital must be
| communist.
|
| If free public libraries didn't exist and were proposed
| today, they'd be accused of communism. If free public
| legal deference did not exist today, anyone proposing it
| would be accused of being a communist. Also notice that
| using public money to hurt a person, i.e. prosecution, is
| never accused of an ideology.
|
| These sort of comparisons are deeply unhelpful and only
| betray illiteracy of the accuser.
| tristor wrote:
| This criticism would carry more weight if this entire
| thread wasn't full of snippets of communist fanfic about
| using legal force to try to upend reality and ending the
| profit motive for companies and enforcing worker
| collectives.
| ClumsyPilot wrote:
| > using legal force to try to upend reality
|
| You mean like how we upended reality in 2008 to save
| corrupt institutions and/or incompetent institutions? And
| then again during COVID? And then again to save Silicon
| Valley Bank?
|
| You pretend that current situation some kind of natural
| state of affairs, when in reality it is a result of
| 'legal force for me but not for the'
| tristor wrote:
| None of those things are reality, those are how we chose
| as a society to interface with it. Now that they've
| happened, they form a part of the fabric of reality, that
| is the history of the universe and humanity as a species.
| When I say "upend reality", I mean the idealist delusions
| that commies hold about the nature of entropy, the nature
| of humanity (acting like greed doesn't exist, forgetting
| the iron law of bureaucracy), and the nature of the world
| (eat or be eaten).
| consteval wrote:
| Yes some people hold different views on the nature of
| humanity. That doesn't mean they're delusional, it just
| means they're different.
|
| Personally, no I don't think greed is intrinsic. I think
| its learned. I also don't think its eat or be eaten. I
| think that's learned, ingrained, to benefit the most
| powerful.
|
| I think 99% of people are good and just want a decent
| life. They don't care about having more or being better.
| tristor wrote:
| The problem is those people are trying to intellectualize
| animals. Humans are animals. We, presumably, have free
| will. We, presumably, have rationality. While these
| traits make us higher order animals, we are still
| animals, and the law of the jungle always applies. It is
| delusional to act otherwise, because when push comes to
| shove if it's a choice between starvation/death or nearly
| any alternative, people will choose the alternative every
| time, which includes violent acts, acts of greed, and all
| manner of despicable things. I'm not even making a moral
| argument here, morals are irrelevant. Morals are a
| fiction created by people to philosophize our own
| societies. But the reality of the world transcends
| humanity and we cannot avoid it.
| consteval wrote:
| Humans are animals by technicality only. We have higher
| thinking. Again, what you're stating is an opinion and
| nothing more. There's nobody anywhere saying you're
| right. Just you, and your beliefs. Which is fine, but
| when you act like your beliefs are divined from God, that
| is what we consider delusions of grandeur.
|
| Yes morals are made up. Everything is made up. Everything
| is a social construct. "the world" (I assume you mean
| evil and greed?) does not supersede that. Because if you
| kill someone you go to jail, and jail is real. Don't
| believe me? Try it out.
|
| The law of the jungle is... well... something you made
| up. Sorry. That may apply to your dog. But for the people
| I know, many would sooner end their own lives than doing
| something that distasteful. Hell, I've known many to end
| their own lives for much much less. Point being, it
| doesn't actually work this way.
| ClumsyPilot wrote:
| > Morals are a fiction created by people to philosophize
| our own societies.
|
| This is preposterous, and frankly quite uninformed. It is
| especially ironic coming from you, since you are going
| round and accusing other people of being delusional.
|
| We have iron-clad proof that cavemen took care of members
| of their tribe that were born crippled, and of the
| elderly. For no benefit to themselves. We have evidence
| of morals going back thousands of years. This is a topic
| well researched by anthropologists, and is not up for
| debate.
|
| That's what the word 'civilisation' means - civilised
| behaviour and ethical standards. The people who think you
| can have a complex society, but have no respect for
| morals, are frankly savages.
|
| It is unfortunately quite common to come across people in
| technology that have great talents, but they are as
| informed and society and civics as a high-scooler.
|
| The other day I came across libertarians who think
| parents should have no obligations to feed their children
| and should not be held accountable if the child dies,
| because freedom. Might as well be speaking to
| Neanderthals.
| havblue wrote:
| >There is some kind of derangement in the English
| speaking West, any attempt to reign in power of capital
| must be communist.
|
| I do believe corporatism is a problem with modernity.
| That being said, the article does sound fairly similar to
| "workers must own the means of production". Are we not in
| the ballpark of Marx, for better or worse?
| consteval wrote:
| No, this is socialism as best. Not communism.
| edm0nd wrote:
| I'm just being pedantic but "free public libraries" don't
| really exist though.
|
| They are paid for by property owners via tax millages
| rates on their homes.
|
| Most people support this but none are free since the
| public pays for em.
| rakoo wrote:
| > underoptimize for profit -> company goes bust
|
| That's a wild statement that is going to need some strong
| proof
| randunel wrote:
| Proof of what? Proof that non profitable companies go
| bust, which is what your quote says? Or proof that over
| optimising for employee happiness results in under
| optimising for profit, which you haven't quoted?
| glenngillen wrote:
| You shifted the criteria here. Under optimise for profit
| does not mean unprofitable.
| rakoo wrote:
| Proof that underoptimizing for profit, _not_ being non
| profitable, means going bust. Exactly what is quoted in
| fact.
| CodeGroyper wrote:
| How is it a wild statement? The whole point of a company
| is to make money. It's like asking why workers care about
| their salaries.
| olex wrote:
| This is an often stated postulate, but I'm not sure I
| agree. Sure, making money is necessary for a company to
| survive, but it doesn't have to be an end goal, and imho
| it's detrimental when it is. The goal can and should be
| to make a great product, create and make available
| something that otherwise would not exist, improve some
| product or process, etc - money and company itself are or
| should be just a means to a goal like that.
| Gormo wrote:
| And the measure of how well you are making a great
| product, creating something that would otherwise not
| exist, or improve some other product or process is how
| much your customers are willing to pay you for what you
| are doing. If you are creating value for other people,
| you are making money -- money is a measuring unit that
| quantifies transferable value.
| rakoo wrote:
| No, because that falls under the fallacy that every
| market is a perfect market, where none is.
|
| A perfect market is one where
|
| - alternatives can be created for little to no money so
| they can easily exist
|
| - consumers have an infinity of time, money and energy to
| analyze products
|
| - consumers have total agency over their decision
|
| - picking an alternative has no cost, no drawback
|
| - it is possible to buy nothing and still be content
|
| There are 0 markets that fall under those conditions. The
| measure of how good your product is is not in its sales
| figures it is in... reviews.
| Gormo wrote:
| >No, because that falls under the fallacy that every
| market is a perfect market, where none is.
|
| No, it doesn't. We live in a stochastic world, not a
| deterministic one, and nothing perfectly fits any
| speculative model. There are always outliers and edge
| cases, and that's fine -- the world doesn't need to
| perfectly adhere to any model in order for the model to
| be _more accurate than not_ in the general case.
|
| And the proposition that business profits are largely
| aligned with consumer interests in the general case, even
| despite outliers to the contrary, is very obviously true.
| rakoo wrote:
| > the world doesn't need to perfectly adhere to any model
| in order for the model to be more accurate than not in
| the general case.
|
| But that's my point: the world is so different from that
| model that it becomes inaccurate. You might be privileged
| enough to have a good enough approximation of a perfect
| market, leading you to believe that the model stands, but
| you are not representative of the population. Not even
| close to the median.
|
| > And the proposition that business profits are largely
| aligned with consumer interests in the general case, even
| despite outliers to the contrary, is very obviously true.
|
| I don't know why I'm debating this in the hyper-
| capitalistic forum that Hacker News is, but no, business
| profits are not. If they were, no advertising would be
| necessary, because products would naturally be sold. If
| they were, every consumer would have access to
| everything. If they were, no lobbying by any company to
| soften laws seen as too restrictive would be necessary.
| If they were, companies would not emit a single gram of
| CO2.
|
| The whole point of business profit is to profit. Aligning
| with consumer interests is lucky happenstance, not a
| necessity. A fringe outlier, as you say. You cannot say
| "it is true because I see it". It needs to be backed by
| strong analysis.
| UncleMeat wrote:
| I don't think that this is true. There are plenty of
| businesses that make shitloads of money off of
| frustrating or downright crappy products because of
| captured markets, constrained customers, lack of
| transparency, and more.
|
| Look at something like Dark Patterns. These make a
| business more money by _making a product worse_.
| rakoo wrote:
| My point isn't that a company shouldn't optimize for
| profit. My point is that the supposed logical conclusion
| stating "if it doesn't optimize for profit, then it will
| die" needs to be backed up by strong arguments. There are
| myriads of examples of companies not optimizing for
| profit and still surviving, and there are myriads of
| examples of companies optimizing for profit and still
| going bust.
| randomdata wrote:
| _> and there are myriads of examples of companies
| optimizing for profit and still going bust._
|
| Do you mean there are myriads of example of companies who
| _say_ that they are optimizing for profit, but don 't
| actually follow through in their actions? Humans do,
| indeed, have a penchant for saying one thing and then
| doing another. But if they are truly optimized for
| profit, how could they possibly go bust?
| mkbosmans wrote:
| It is not an unconstrained optimization problem. The
| constraints in which the company operates might result in
| a feasible region where even the most profitable point is
| still a net loss. Those constraints may of course be
| self-imposed, like e.g. choosing a market to operate in.
| randomdata wrote:
| _> It is not an unconstrained optimization problem._
|
| Of course not. The constraints are exactly what you
| optimizing against. Choosing to operate in a market that
| is not capable of supporting profitability is not
| optimizing for profitability, though. One may claim to be
| optimizing for profitability, but actions speak louder
| than words.
| UncleMeat wrote:
| Why is that the whole point? A company needs enough
| revenue to pay its employees, but it doesn't need more
| revenue in any absolute sense.
|
| "Just existing in the world, providing a service to
| customers and a wage to employees" is a fine and stable
| way for a company to exist.
| JohnFen wrote:
| Profit is what remains when you subtract operating
| expenses from income. Payroll is an operating expense.
| Maximizing profit is not strictly necessary for a
| business to operate.
| 6510 wrote:
| If with _over_ in _overoptimized_ you mean where it starts
| cutting into optimizing for earnings it is by definition
| true.
|
| One could similarly say that the company goes kaput if you
| over-optimize for profit extraction.
|
| The goal should be to some-how optimize for the sweet spot
| where the well-being of the company, the employees,
| investors, the economy and the environment are sufficiently
| in balance.
|
| I think the customer has a good bit of influence by voting
| with their wallet but we don't see it in action very often.
| One could underoptimize for that too!
| lupusreal wrote:
| If _every_ company that offers goods or services prioritizes
| "worker happiness", by for instance refusing to excise
| unproductive divisions, then the result will be a world where
| everything costs more and takes longer. Not just consumer
| goods, but any sort of public infrastructure project, R&D,
| etc. If you think it takes too long or costs too much to
| build a school or fix a road in America these days compared
| to a few generations ago, it would only get worse. Every
| single sector of the economy would start dragging its feet
| with no regard for efficiently getting shit done.
|
| If only _some_ companies are coops, then those have to
| compete with companies that aren 't and consequently they
| have to work efficiently or fail. The idea behind making them
| _all_ be coops seems to be removing this pressure to perform.
| Bad idea.
| stavros wrote:
| Everything already costs more, because companies make crazy
| margins to make Bezos richer instead of making their
| products cheaper.
| lupusreal wrote:
| If coops could be more productive for less money they
| could beat out their competition without needing it
| outlawed. It should be easy for them if what you say is
| true, no Bezos means they have more margin to work with
| but they struggle to compete... Hmm..
| stavros wrote:
| "If companies who don't optimize for profit optimized for
| profit they would be the same as the companies who
| optimize for profit" is fairly obviously true, and also
| useless.
| lupusreal wrote:
| So are you conceding that an economy built entirely out
| of coops would suffer from reduced productivity?
| stavros wrote:
| You're asking me if an economy that optimized for
| happiness instead of productivity would suffer from
| reduced productivity? Yes, yes it would, and it would
| also suffer from increased happiness.
|
| Again, this is a culture thing, where I'm saying "I don't
| care about being productive, as long as I'm happy", and
| you're coming from a Protestant work ethic place of "but
| how can you be happy if you aren't productive?".
| lupusreal wrote:
| I think you're confusing productivity with profit.
| Regardless of how company profits are distributed, our
| society needs productivity. I pointed out that coops are
| less efficient in terms of productivity, and you
| responded by complaining about how much money Bezos has.
| Redistributing the money won't make up for a decrease in
| productivity, which will harm society as a whole.
|
| As for me being some sort of Christian; I'm not and I
| take that as an insult. Kindly go fuck yourself.
| consteval wrote:
| I disagree that a decrease in productivity would make
| society worse as a whole. For example, the change from
| Serfdom to a more standard 40-hour work week certainly
| lowered productivity, but it also made society better.
|
| Also productivity is complicated because humans are
| complicated. You may assume that, say, 50 hours of work
| is more productive than 40. But I doubt it - from what
| I've seen, it might be less productive. Even though more
| time is spent.
| Fredkin wrote:
| The average productivity per person today is vastly
| greater compared to subsistence farming times. We have
| much more leisure time now made possible by an _increase_
| in productivity due to machines, technology, and better
| division of labour. (Though I argue our current debt
| based money system which requires constant inflation is
| stealing our productivity and that 's why we still feel
| like we're on a treadmill despite massive gains in
| production). This greater productivity is what allows us
| to consume not only more stuff, but a wider variety of
| stuff, and stuff of better quality than in the past.
|
| As for 'the change from serfdom', if you're referring to
| the improved working conditions following the peasants
| revolt, remember it took the Black Death to wipe out 50%
| of the population in England, consumption went down, but
| the potential productivity of survivors would not have
| changed much, so landowners had to pay more for laborers
| to attract manpower for farming.
|
| A decrease in productivity relative to consumption is not
| good, as it just causes low-supply driven inflation and
| makes everybody poorer. That being said, I believe the
| quality of productivity / consumption also need to be
| considered, not just aggregates. It's entirely possible a
| lot of productivity is just garbage products and
| irrational consumers are happy to consume or are
| tricked/bamboozled. ZIRP and excess monetary expansion
| facilitates these distortions, giving investors cheap
| money to stimulate production in dubious industries, and
| giving consumers cheaper credit to purchase products of
| dubious value.
| orangecat wrote:
| _Again, this is a culture thing, where I 'm saying "I
| don't care about being productive, as long as I'm
| happy",_
|
| And you're free to work part time or switch to a lower-
| paying job that you enjoy more. I did the latter
| recently; it's great, and I'm thankful that our economy
| is so productive that I can still afford everything I
| need.
| pjerem wrote:
| But that's a restricted vision where being productive is
| a graal vs being useful for the society.
|
| Coops don't want to beat the competition, they want to be
| a useful structure for A) their clients and B) their
| workers.
|
| If they manage to do A+B, they have already won. They
| don't need or want to beat out competition.
|
| They don't play the capitalists game, they play the real
| game of "in a working society, workers want to be useful
| and customers wants a good service". There is nothing
| more to happiness of a society. Everything else is just
| about making rich people more rich.
| pjerem wrote:
| Honestly that's pretty false.
|
| There are lot of countries out there in the occident where
| you can't "excise unproductive divisions" and where firing
| a worker without a solid reason is hard and dangerous for
| the employer.
|
| And guess what, they have a cost of living that is
| comparable to the US (except for housing which is currently
| shitty all over the occidental world).
|
| Ok, you may say that the US is the first worldwide economy
| or whatever. And what ? A good economy is just a tool to
| help societies flourish. If you have a powerful economy but
| your citizens are sad and depressed, you are loosing the
| society game anyway.
|
| Being efficient at getting shit done is probably important
| for global happiness, but that's up to a point.
|
| If people in US are sad, it's not because schools are too
| long to construct or because roads are too long to fix,
| it's because nobody even decides to build/fix them because
| it benefits "only" to the community.
|
| Humans don't inherently hate working, that's even probably
| ingrained in their genes, they just hate being exploited.
| glenngillen wrote:
| Your opening paragraph here reads to me like the first
| decade of Google.
| SomeoneFromCA wrote:
| Yes exactly. This is why, European countries, with the
| strongest worker protection, such as Norway, Sweden,
| Germany etc. are so much poorer and far behind than US in
| terms of QOL and quality of goods they produce.
| tempfile wrote:
| Why do you think that prioritising worker happiness would
| lead to refusing to excise unproductive divisions? Do you
| think people like working for a company that doesn't do
| anything?
| perryizgr8 wrote:
| > we should be optimizing for making a company that makes the
| workers' lives better.
|
| Sure, you're free to optimize for anything you like. As am I
| and everyone else. I don't think there are any legal hurdles
| to set up a company that is fully owned by its workers.
| solidninja wrote:
| Well maybe "taking over the market" is also a monopolistic
| and anti-competitive practice and if we had say, working
| regulation that forbade the existence of these behemoth
| companies then the landscape of value would look a little
| different.
| Eddy_Viscosity2 wrote:
| This is maybe an underappreciated point, an employee-owned
| company with in a monopoly (or near monopoly) market
| position will act just as aggressively to screw over their
| captured consumer base as any other private ownership
| model. The employees may be better off, but the rest of us
| will suffer the same.
| throwaway7ahgb wrote:
| Agreed, COOPs don't fundamentally change human behavior
| which has doses of greed. A large COOP monopoly will
| suffer the same fate as others'.
| shkkmo wrote:
| This is an assumption and one that I believe is faulty.
| Humans' caring is often related to the degree of
| connection. Employees at a company are more closely
| connected to their customers than investors and are thus
| more likely to care more about those customers.
|
| Monopolies are still bad either way, but I doubt that the
| failure modes at employee owned monoploes is the same as
| at outside investor owned monopolies.
| photonthug wrote:
| Yeah. Saying "COOPs don't fundamentally change human
| behavior which has doses of greed" is like saying that a
| kingdom works the same way as a democracy since hey, it's
| all just humans. Simply involving more decision makers is
| a meaningful change. Certainly involving more decision
| makers that are outside of the business/legal/accounting
| class is a meaningful change.
| shkkmo wrote:
| Technically a worker owned Co-op is different from a
| company with an ESOP as described in this article. The
| article it links to has more details:
| https://www.nceo.org/articles/employee-ownership-by-the-
| numb...
|
| There are a multitude of ways that employee ownership can
| be encouraged, required, or ownership can be limited to
| employees.
| throwaway7ahgb wrote:
| The OP is postulating they would look different but not
| better. Nobody has refuted the claim that if COOPs were
| better they would be more popular , but they are not.
|
| Uplifting the entire global financial system to make a COOP
| more attractive through regulation wouldn't change this.
| zby wrote:
| To take over the market companies need to attract customers -
| i.e. make their lives better. Usually there are more
| consumers than employees - so I think that measure works
| quite well with optimising for humans. Profit is a side
| effect of taking over the market.
|
| But actually to have any employees companies need to optimize
| for workers lives anyway. And it seems that cooperatives are
| not any better in this area - otherwise everybody would work
| for cooperatives.
| kerkeslager wrote:
| > To take over the market companies need to attract
| customers - i.e. make their lives better. Usually there are
| more consumers than employees - so I think that measure
| works quite well with optimising for humans. Profit is a
| side effect of taking over the market.
|
| Quantity of people benefitted isn't the only measure:
| magnitude of benefit is also relevant. The customer at a
| 7Eleven benefits in that they get to... what, buy snacks
| conveniently? Versus the worker who receives their entire
| livelihood and benefits, it becomes obvious that workers
| are the primary beneficiaries of a company.
|
| > But actually to have any employees companies need to
| optimize for workers lives anyway.
|
| This is quite obviously false. All companies have to do is
| present a united front on keeping pay low and benefits
| nonexistent to prevent workers from having better options.
| I.e. USA 2024.
|
| > And it seems that cooperatives are not any better in this
| area - otherwise everybody would work for cooperatives.
|
| Why is that exactly?
| throwaway7ahgb wrote:
| >All companies have to do is present a united front on
| keeping pay low and benefits nonexistent to prevent
| workers from having better options. I.e. USA 2024.
|
| Can we leave the cynical antiwork comments out? They
| aren't helpful. This is obviously not the case for a
| majority of companies and anecdotes don't help.
|
| Everyone is for the highest pay possible until they run
| their own company and have to provide payroll.
| ClumsyPilot wrote:
| > Can we leave the cynical antiwork comments out? They
| aren't helpful. This is obviously not the case for a
| majority of companies and anecdotes don't help.
|
| Major companies are regularly prosecuted for conspiracy
| to suppress wages. It if weren't for government
| intervention your wages would be much lower and there
| wouldn't be anything you can do about it.
|
| This blind faith that billion dollar corporations would
| behave ethically is highly inappropriate
|
| https://www.latimes.com/business/technology/la-fi-tn-
| tech-jo...
| lupusreal wrote:
| Most companies aren't "major companies". I'm for busting
| up the big monopolies, but I'm not for throwing the baby
| out with the bath water and imposing communist reforms on
| _all_ businesses, most of which are small and generally
| well behaved, just because some big ones with
| pathological behavior exist.
| specialist wrote:
| There's A LOT of daylight between liberal capitalism and
| communist socialism.
|
| The social democracies, a middle path, as the Nordic
| countries have experimented with, seem to have done quite
| well. And there's now strong evidence that our system
| (neoliberalism) has stunted economic growth.
|
| Regardless...
|
| I support simple social reforms, like sovereign wealth
| funds (Alaska, Norway) and universal healthcare, greatly
| reducing the tension between labor and capital. Then
| these labor, employment, and ownership reforms wouldn't
| be so fraught.
| lupusreal wrote:
| This discussion is about the proposal to, by law, force
| all businesses to be workers cooperatives. That's not the
| liberal capitalism found in Nordic countries, it's
| communism.
| ClumsyPilot wrote:
| Communism does not have businesses, worker owned or
| otherwise. It does not even have currency and money at
| all.
|
| Early form of capitalism didn't have limited liability
| companies. Just because you have to use Unlimited
| Liability Partnerships, for example, that does not mean
| it's not capitalism.
|
| Once we move beyond capitalism, there are other words
| too, like mercantilism, imperialism, Neo-feudalism
| (arguably what we are getting to), schumpeterianism, etc.
| Expand your vocabulary.
| kerkeslager wrote:
| So if you acknowledge that pathological behaviors exist,
| what's the problem with regulating against those
| pathological behaviors? Given you seem to think most
| companies are small and well-behaved, it won't affect
| those companies.
| lupusreal wrote:
| I support regulating businesses and never suggested
| otherwise!
| bdw5204 wrote:
| As it turns out, the Federal Reserve chairman happens to
| be on record as wanting to suppress wages because he
| blames high wages for inflation[0]. In other words, the
| current dumpster fire of an economy was the intended goal
| of the Federal Reserve's interest rate increases.
|
| [0]: https://www.politico.com/news/2022/11/30/feds-
| powell-inflati...
| JohnFen wrote:
| > Everyone is for the highest pay possible until they run
| their own company and have to provide payroll.
|
| And even then, there are lots of companies who want to
| provide the highest pay possible. I have always strived
| for this in my companies, anyway.
| kerkeslager wrote:
| > This is obviously not the case for a majority of
| companies and anecdotes don't help.
|
| That isn't obvious at all. The US has the one of the
| highest pay gaps of any developed nation. Our largest
| companies with the richest executives have employees on
| food stamps. I'm not being cynical, I'm talking about
| reality, and I'm not going to shut up about it just so
| you can maintain your comfortable naivete on this issue.
|
| > Everyone is for the highest pay possible until they run
| their own company and have to provide payroll.
|
| If you can't pay your workers a living wage your business
| has failed in the only way I care about.
| fragmede wrote:
| > The US has the highest pay gap of any nation.
|
| This doesn't contradict your point, but fwiw the pay gap
| of quite a few other nations come before the US. In terms
| of RP, the US ranks about 35th, behind many African and
| Asian nations.
|
| https://en.wikipedia.org/wiki/List_of_countries_by_income
| _eq...
| piva00 wrote:
| > But actually to have any employees companies need to
| optimize for workers lives anyway. And it seems that
| cooperatives are not any better in this area - otherwise
| everybody would work for cooperatives.
|
| There's much more at play than just "cooperatives are not
| any better". Cooperatives don't get as much funding from
| investors because investors won't be owning a larger share
| of them, and taking their returns, they instead invest in a
| traditional company because then they can extract as much
| as possible from their investments.
|
| That by itself already puts small scale cooperatives at a
| competitive disadvantage, you can't raise as much capital
| as the non-cooperative startup, even if their product could
| be better and their employers could be happier the lavishly
| monied startup will try to outcompete them by throwing
| money away until they get a larger share of the market.
|
| If somehow this situation was improved where cooperatives
| are not immediately disadvantaged from an earlier stage we
| could see more of them popping up, right now there's not
| nearly enough cooperatives for this comparison to be
| possible, simply because they get extinguished by others
| with more capital.
| aleph_minus_one wrote:
| > There's much more at play than just "cooperatives are
| not any better". Cooperatives don't get as much funding
| from investors because investors won't be owning a larger
| share of them, and taking their returns, they instead
| invest in a traditional company because then they can
| extract as much as possible from their investments.
|
| Unions should put their money where their mouth is and
| invest in cooperatives.
| piva00 wrote:
| > Unions should put their money where their mouth is and
| invest in cooperatives.
|
| Unions aren't structured for investing, and that's not
| their reason to exist.
|
| I don't know where you are from so I can't comment on how
| unions function in your society, where I live they're
| definitely not in the same realm as a potential investor
| for cooperatives.
|
| You are also asking for unions to compete against VCs,
| and banks, let's be realistic that even a large and
| wealthy union is not even close in terms of wealth
| management as a small to mid-size bank/investor. On top
| of that the union has responsibilities to provide
| benefits to all members, a bank or investor has none of
| that, tilting the scale even more in disfavor of an union
| assuming the role of investment.
|
| It's a good thought though, another entity such as a
| credit union supported by workers in an industry which
| also takes the role on investing in cooperatives to
| foment them, would still be an uphill battle but if some
| good cooperatives came out of it maybe it could be
| another viable (albeit smaller) model to start companies.
| aleph_minus_one wrote:
| > On top of that the union has responsibilities to
| provide benefits to all members, a bank or investor has
| none of that
|
| A bank has responsibilities to its shareholders.
| piva00 wrote:
| But not to all members participating in the machine,
| hence my point that unions have a responsibility over all
| its members.
| hellojesus wrote:
| To the extent the bank wants to retain employees, it does
| need to provide some minimum level of utility. That may
| be as simple as an hourly wage for some, but both
| shareholders and employees are participating in the
| machine.
| randomdata wrote:
| _> Unions aren 't structured for investing, and that's
| not their reason to exist._
|
| Depends on the union. A credit union is structured for
| investing and is literally their reason to exist.
| alephnerd wrote:
| Yk a Labor Union is entirely different from a Credit
| Union right?
| aleph_minus_one wrote:
| For sure, but who says that they can't become more
| similar ...
| randomdata wrote:
| Typically[1], but both are unions. Had the previous
| commenter been talking about labour unions then you might
| have something, but it clearly says "union" and "union"
| alone.
|
| [1] Although definitely not necessarily. A group of
| labour unions in these parts collectively own one of the
| largest hedge funds out there.
| alephnerd wrote:
| > Unions should put their money where their mouth is and
| invest in cooperatives
|
| As in Labor Union.
|
| Pedantry and HN - name a more iconic duo.
| randomdata wrote:
| If labor was somehow significant to union, it would have
| been mentioned.
| alephnerd wrote:
| In colloquial American English, "Union" denotes "Labor
| Union".
| randomdata wrote:
| What, then, does American English call a union?
| alephnerd wrote:
| What do you mean? In English a single word can have
| multiple meanings.
|
| A "Labor Union" is colloquially a Union. A marriage is
| also called a "Union". And so is the mathematical
| operation joining two sets.
| randomdata wrote:
| Union in the broad labour union sense, but without the
| labour specificity. The same union we've been talking
| about all along.
|
| Not sure why you think we'd randomly change the topic all
| of a sudden for no reason...
| merely-unlikely wrote:
| Only partially true. Unions themselves aren't structured
| for investing, but unions have some of the largest
| pension funds and the managers of those pensions are some
| of the largest institutional allocators in the world.
|
| Think CalPERS, CalSTRS, Teacher Retirement System of
| Texas, Ontario Teachers Pension Plan, and many others.
| WalterBright wrote:
| > Unions aren't structured for investing, and that's not
| their reason to exist.
|
| They seem to have plenty of extra money to fund political
| candidates.
| specialist wrote:
| Agreed! I vaguely recall SEIU doing just that.
|
| Top hit from my casual search is a report containing case
| studies, two of which are SEIU.
|
| A Union Toolkit for Cooperative Solutions [2021]
|
| https://unioncoops.wordpress.com/wp-
| content/uploads/2022/02/...
|
| Also, Richard Wolff has been advocating worker directed
| social enterprises (WSDE, aka coops?) for a while. Sadly,
| his now dated arm wavy book doesn't is more advocacy than
| HOWTO.
|
| Democracy at Work: A Cure for Capitalism [2012]
| https://www.amazon.com/Democracy-at-Work-Cure-
| Capitalism/dp/...
|
| And his website is not very focused.
|
| https://www.democracyatwork.info/
|
| I'm fine with polemics (about marxism, socialism,
| capitalism). But I'm already convinced.
|
| Now I just want concrete action steps.
|
| Please share any other (better) resources and links.
| rangerelf wrote:
| Unions aren't there for "Ownership" of companies or
| cooperatives, they're for improvement of member's work
| lives, it can be training, worker contract negotiations,
| as go-between when dealing with management or owners,
| etc.
| pembrook wrote:
| 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...
| ClumsyPilot wrote:
| > make markets less efficient and less responsive to
| innovation
|
| I wish we didn't force capital to do things like that.
| Then it can run wild with Mandatory arbitration which
| bars access to the justice system, algorithmic
| manipulation of prices for rents / real-estate (1) and
| installing spyware on the customer's computers (2) and
| MITM attacks of your communication (3). They are all free
| market innovations. Very efficient at doing the wrong
| thing.
|
| 1 - https://rentalhousingjournal.com/fbi-searches-
| property-manag...
|
| 2 - https://www.pcmag.com/news/hp-accused-of-quietly-
| installing-...
|
| 3 - https://techcrunch.com/2024/03/26/facebook-secret-
| project-sn...
| forgetfreeman wrote:
| The market has spent the GDP of Madagascar to fuck over
| cabbies in a handful of metro areas in the US. Meanwhile
| "efficiency" in the ISP market has lead to regional near-
| monopolies and some of the worst residential bandwidth on
| the planet. Let's not with "efficiency and innovation"
| yeah? The emperor is clearly buck-ass naked.
| pembrook wrote:
| Ahhh yes, the old "because the market didn't turn out the
| way I wanted it to once, it means the entirety of the
| capitalist system and the idea of free markets is
| fundamentally broken" retort.
|
| I call this the "Jr. developer fallacy." Start a job,
| encounter some bugs, suggest rewriting the entire
| codebase from scratch on [insert-trendy-framework].
| malcolmgreaves wrote:
| > once
|
| The many systemic market failure modes of capitalism are
| well documented and written about at great lengths.
| nradov wrote:
| The many systemic market failure modes of socialism and
| economic central planning are well documented and written
| about at great lengths.
| forgetfreeman wrote:
| You wanna review the track record of market driven
| healthcare systems vs socialized medicine? Spoiler: the
| US has one of the worst (by any metric you care to track)
| healthcare systems of any industrialized nation. Just
| because someone else's shit is broken doesn't necessarily
| mean your shit is working.
| nradov wrote:
| I care to track cancer 5-year survival rates and the
| number of new drugs introduced per year. By those metrics
| the US is at or near the top. The US healthcare system
| has plenty of flaws but it does some things quite well.
| forgetfreeman wrote:
| Drug discovery clusters in the US because the EU doesn't
| permit profiteering
| nradov wrote:
| Then it seems that permitting profiteering results in
| better outcomes. At least for certain things.
| jcranmer wrote:
| > Spoiler: the US has one of the worst (by any metric you
| care to track) healthcare systems of any industrialized
| nation.
|
| That "by any metric" is just plain wrong. There's several
| metrics by which the US healthcare system is among the
| best--in general, if the metric you are tracking is
| largely covering the success rates of medical procedures
| (sibling comment mentions 5-year cancer survival rates,
| for example), then the US generally scores high. If the
| metric you are tracking is instead covering general
| population health or things easily caught with
| preventative medicine, then the US scores abysmally in
| those metrics.
|
| In other words, the US healthcare system actually turns
| out to be very good (if perhaps not on a per-cost
| metric)... but _access_ to the good healthcare system is
| extremely poor. And that 's kind of what you'd expect for
| a market-driven system: good healthcare _if_ you can
| afford it, shit healthcare if you can 't.
| jazz9k wrote:
| Socialized systems are subsidized by the US drug
| companies. Corporations pour billions of dollars into r&d
| and other countries end up making cheap generics of the
| final product, without having to do any of the research.
|
| US Healthcare is expensive, but the quality is better
| than most other countries.
| piva00 wrote:
| > Socialized systems are subsidized by the US drug
| companies. Corporations pour billions of dollars into r&d
| and other countries end up making cheap generics of the
| final product, without having to do any of the research.
|
| The American pharma companies also don't do the research,
| a lot of it comes from scientific institutions funded by
| _public money_.
|
| What pharma companies do is provide capital for drug
| trials which are absurdly expensive, they are more alike
| investment companies than actual research institutes...
| forgetfreeman wrote:
| Fun Fact: most large pharma companies spend more on
| marketing than R&D.
| WalterBright wrote:
| The US health care system is primarily run by the
| government.
| qwytw wrote:
| > (by any metric you care to track) healthcare systems of
| any industrialized nation
|
| That's certainly not true. Of course compared to pretty
| much every highly developed country if we factor in
| relative spending per capita you'd be right.
|
| But yeah, purely market/profit driven systems (with
| extremely poor and inefficient regulation) certainly
| don't work in certain sectors like healthcare.
|
| Also it depends on what do you mean by 'socialized
| medicine', if you're specifically talking about single
| payer, your point is only valid if you ignore all other
| countries which don't have single payer besides the US.
| The Swiss and (as far as I can tell) to a lesser Dutch
| healthcare systems are 'privatized' to a much higher
| degree than the one in US i.e. effectively fully, there
| are no Medicare/Medicaid equivalents there. Instead they
| are very strictly and relatively efficiently regulated.
| They pretty much have Obama/Romneycare++.
|
| If you mean something else than single-payer then the US
| system is arguably heavily 'socialized', both through
| insurance polling (just like in the countries I
| mentioned) and because the US government itself spends
| more on healthcare than most industrialized countries
| even relative to GDP. e.g. if we exclude all private
| spending (both individual and insurance) government
| health spending per capita in the US is significantly
| higher than in Britain and more than 2x higher than in
| Spain (and still significantly higher if adjusted by PPP
| GDP per capita)
|
| https://data.worldbank.org/indicator/SH.XPD.GHED.PP.CD?lo
| cat...
| piva00 wrote:
| Socialism does not mean central planning of a whole
| economy. That was the _Soviet model of communism_ , which
| doesn't work at all.
|
| I feel that the USA's education system has indoctrinated
| students so deeply into the red scare that real terms
| have become meaningless to discuss political and
| economical systems with the larger American audience, the
| words simply don't mean the same, they mean what you've
| been indoctrinated to believe they mean.
| qwytw wrote:
| > Socialism does not mean central planning of a whole
| economy
|
| What other forms of semi-stable functional "socialism"
| are there?
|
| > have become meaningless to discuss political and
| economical systems with the
|
| Discussing hypothetical pseudo-utopian systems like
| "socialism" or "communism" isn't particularly meaningful
| either (from the economics perspective, not
| philosophical).
|
| IMHO the problem with socialism is that it will pretty
| always be outcompeted by private ("capitalist")
| enterprises which can provide goods and services which
| are both higher quality and cheaper (yes by "underpaying"
| their workers but also they tend to be much more
| efficient). Therefore you can't really allow both in the
| system/country.
|
| So realistically "socialism" can only exist if the state
| suppresses any alternatives using various degrees of
| coercion and force. Since no real competition and by
| extension dissent can exist (i.e. nobody has enough
| resources to challenge the state without significantly
| damaging their career/status/wellbeing) the state ends up
| becoming more and more oppressive/controlling and
| unavoidable corrupt. I'd love to see any empirical
| evidence disproving this but as far as I can tell
| historically that's what always ended up happening.
| Miner49er wrote:
| > What other forms of semi-stable functional "socialism"
| are there?
|
| Cooperatives. This article we're discussing here is
| advocating for socialism, it's just not using that word.
| qwytw wrote:
| If cooperatives can survive and compete with private
| enterprises without excessive regulation and government
| coercion that limits and competition and leads to lower
| productivity that's great. As far as I can tell that's
| rarely (but probably occasionally) the case unless we're
| also including "guild" like organizations.
|
| However I'm not sure cooperatives are strictly a "form"
| of socialism, they have been a part of capitalist
| societies since pretty much the very beginning. I guess
| it depends where we draw the lines between partnerships
| etc. and cooperatives, I guess hiring additional workers
| who don't have an equal stake/share in the enterprise or
| subcontracting any sort of labor (let's say on a
| significantly meaningful scale, but still very hard to
| avoid) would be it.
| WalterBright wrote:
| > the USA's education system has indoctrinated students
| so deeply into the red scare
|
| Never mind the heavy leftward tilt of teachers, students,
| and universities.
| andrepd wrote:
| I'm glad TFA is not about central planning then?
| forgetfreeman wrote:
| That's just a couple examples I picked off the pile. You
| wanna do hyperconcentration of wealth crushing entire
| small business industries, collusion on pricing, ag
| services cartels driving farmers to commit suicide at
| record numbers, centralized manufacturing eliminating
| meaningful competition in consumer goods markets, or the
| last 15 years of bullshit where the term "innovation" was
| rolled out to describe some combination of fleecing dumb
| money and fucking over low wage workers let me know.
| Junior developer my ass, I been doing this shit for
| decades sonny.
| stale2002 wrote:
| > cabbies in a handful of metro areas in the US.
|
| The ones that were overcharging consumers?
|
| Yeah it is great for customers when prices go down.
|
| That's a benefit, not a drawback.
|
| Those cabbies should have offer better service at a lower
| price if they wanted to compete.
| nativeit wrote:
| Overcharging? It's easier to beat their prices if you
| don't have drivers or cars to pay for.
| andrepd wrote:
| Compared to dumping I guess everybody is
| "overcharging"...
| bccdee wrote:
| > 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
| can't put food on the table, and infrastructure is
| falling apart.
|
| Whatever it is about this system that you find
| "efficient," I don't find it valuable. The Chinese state
| takes a rather strong hand in allocating capital, and
| that has treated it fairly well over the past few
| decades. A mixed economy where private capitalists are
| not solely responsible for investment choices, and where
| ownership of that capital is more evenly distributed
| among the public, could fix a lot of problems.
| blackhawkC17 wrote:
| > 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.
| hgomersall wrote:
| There's a big range between living in a dictatorship and
| having only private entities allowed to invest in things.
| hellojesus wrote:
| 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.
| apantel wrote:
| 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
| efficient with it. They can basically do whatever they
| want with their money. They can build giant vanity
| estates, which you could certainly call inefficient --
| who needs 20,000 square feet for a family of 3? But... we
| also care about freedom, so we let people do inefficient
| things. The only difference between rich people and poor
| people is they have more money so their inefficiencies
| are louder. But everybody spends money on senseless wants
| and vanity. Who needs manicures and hair extensions?
| Arguably nobody. The "poor" spend on vanity too. And we
| let them because we care about freedom.
|
| If you wanted to implement a perfectly-efficient system,
| would that mean banning the fulfillment of any desire
| that wasn't strictly a need? I don't think anyone would
| want to live in such a system.
| hellojesus wrote:
| 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 that property were traded
| revenue for the land. And the construction workers were
| paid. And now the gov gets taxes.
|
| At every step, each contributor to the end product
| voluntarily participated and maximized their outcomes.
| That is maximally efficient, economically speaking.
| apantel wrote:
| Yeah I'm all for these things that I was calling
| "vanity". I was only using the word vanity because the
| comment I was responding to used it pejoratively: "vanity
| projects".
| andrepd wrote:
| >If you wanted to implement a perfectly-efficient system,
| would that mean banning the fulfillment of any desire
| that wasn't strictly a need? I don't think anyone would
| want to live in such a system.
|
| Holy mother of slippery slopes x) Do you think
| $current_economic_system can be improved? Ah so you want
| to ban _fulfillment of any desire_? Sheesh
| apantel wrote:
| You're strawmanning. I was caricaturing the call for
| efficiency by blowing it up into a monster. I wasn't
| saying I want to ban fulfillment of desire, or saying
| that's the only alternative to the status quo.
| WalterBright wrote:
| Without American billionaires, there would be no SpaceX.
|
| YCombinator is billionaires investing in startups.
| andrepd wrote:
| This is _literally_ like a peasant in the middle ages
| saying "without your Lord you wouldn't have a mill".
| WalterBright wrote:
| Mills flourished in colonial America without lords.
| They're not that hard to construct.
| Aerroon wrote:
| > _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 lot more than what people
| thought of at the time.
|
| Drug R&D and patents lead to enormous profits for
| companies, because they can charge outrageous prices for
| the drugs. But the benefit to the public is that now
| those drugs and the knowledge about them exist. That's
| going to have a cumulative positive effect for hundreds
| of years in the future.
| piva00 wrote:
| 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 productionalising
| another innovation, the foundation is built mostly on
| public funding. Very few companies actually do ground-
| breaking research that innovates, they're pretty risk-
| averse in this sense, the productionalisation of those
| discoveries has its own value, not questionign that, but
| it only gets traction afterwards when the brunt of the
| work of discovery was done.
|
| Efficiency of markets is a hypothesis of financial
| economics with much better written criticism than I can
| write here, Warren Buffet doesn't believe in it, for
| example. It's not a given whatsoever, nor proven
| empirically.
| WalterBright wrote:
| It's way more efficient than any other system that has
| been tried. Free markets bury command economies.
| piva00 wrote:
| It doesn't mean it's the end all system, if it's wasteful
| it can be improved.
|
| At no point I advocated for a command economy, once more
| you reply to a strawman to one of my comments, Walter.
| WalterBright wrote:
| Public funding for whatever means the government is
| picking winners and losers. Whoever pays the piper calls
| the tunes. Public funding always comes with strings.
|
| The government funded Langley with $60,000 to build a
| working airplane. It fell into the Potomac "like a sack
| of wet cement".
|
| The Wrights spent $3,000 and build a working, flying
| airplane.
|
| The jet engine was invented and developed with private
| funds. The US government told Lockheed to stop working on
| jet engines and develop better piston engines instead.
|
| AI, the biggest tech revolution in a couple decades,
| seems to have been privately funded.
| piva00 wrote:
| The internet you are using right now was created by
| public funds.
|
| Compilers, which you work with your whole life, came from
| research done by public funds.
|
| Most medical research has been done with public funds.
|
| Radios, modems, every single piece of networking we
| currently use was first researched by public funds.
|
| We can keep cherry-picking examples if you wish go down
| this road, it doesn't foster much of a deeper discussion
| though if you are going to keep your dogma.
|
| Public funding is necessary, private funding is
| necessary, what kind of system we can create that enables
| the best out of both worlds to evolve and be better?
| That's a discussion I'd like to see, this end of history
| bullshit is too boring, and tiring to discuss.
|
| Capitalism as it is has empirically shown it's not the
| best system humanity should rely on, it has its
| advantages, it has major flaws, admitting that is a
| pretty good first step into trying to look what's next,
| how do we go from here. It's destructive, it's inhumane,
| it's simplistic, it will become a relic just like any
| other system that came before.
|
| Being dogmatic about it doesn't take us anywhere, it just
| conserves a status quo which is not the best we can
| achieve.
|
| As usual, I think you are a bright person, Walter, you've
| done tons and achieved a lot more than most, but keeping
| this dogmatic narrow-view of the world certainly pains
| me, exactly because you are the kind of mind that should
| be able to see through the bullshit...
| WalterBright wrote:
| The internet is not even remotely the first network. See
| "The Victorian Internet" by Standage
| https://www.amazon.com/Victorian-Internet-Remarkable-
| Ninetee...
|
| It was an incremental step, followed by other incremental
| steps. There have also been many, many internets along
| the way: AOL, Prodigy, BYTEnet, MCI, Gopher, RBBS, etc.
| Every organization that had more than one computer soon
| figured out how to connect them. Even I did that.
|
| BTW, Ethernet was invented by Xerox. I use it every day.
|
| Compilers appeared shortly after computers that were
| capable enough to run them appeared. This suggests an
| inevitability, not a discontinuous invention. Jet engines
| were a discontinuity, too.
|
| What I see is that if invention X is derived from
| inventions A,B,C,D,E,F, and D was funded by the
| government, the government gets all the credit.
|
| > Capitalism as it is has empirically shown it's not the
| best system humanity should rely on,
|
| How has that been shown?
|
| > it has its advantages, it has major flaws, admitting
| that is a pretty good first step into trying to look
| what's next, how do we go from here. It's destructive,
| it's inhumane, it's simplistic, it will become a relic
| just like any other system that came before.
|
| Show an example of any system working better.
|
| Free markets are a chaotic system of creative
| destruction. There have been endless attempts at "fixing"
| that. None have worked better.
| andrepd wrote:
| "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.
| throwaway7ahgb wrote:
| Capital markets has mostly two* components : Stocks and
| Bonds
|
| Investors don't need to own part of a company to buy a
| Bond, they just want to see good credit rating and yield.
|
| *VC is also part of capital markets but mostly private
| and such a small % of global investment.
| nradov wrote:
| New companies have no credit rating. Investors would
| never buy bonds sold by a new cooperative that needs a
| huge amount of capital to build a new semiconductor fab
| or something.
| nicholasnorris wrote:
| The investment schemes do not have to stay static while
| only the structure of businesses change.
|
| Even if it did, would it not makes sense that investor
| priorities would change if their only options beyond
| cooperative businesses were some very small startups and
| mom & pops?
|
| A system of public banks could handle investment based on
| the priorities set by all citizens. Everyone would
| effectively become a shareholder. Successful businesses
| could be taxed based off what the public invested in
| those new cooperatives, and those taxes would be used at
| least partially be used to fund more startups.
| specialist wrote:
| Yes and: IIRC, long-term governance of coops has been a
| challenge.
|
| Coops have been vulnerable to "hostile takeovers" (I
| don't know what to call it), transmuting from benefitting
| members yet another rent seeking enterprise that remains
| a "coop" in name only.
|
| I was a long time member of PCC and REI. As I understand
| it, both experienced juntas. Histories I'd love to
| understand better.
|
| I've read that most farmer coops also fell prey, becoming
| profiteers, from helping to harming their members. IIRC,
| there was even a personal account here on HN by a dairy
| farmer.
|
| In conclusion, I'd _LOVE_ for coops to be the norm. My
| biggest concern is how to structure coops to remain true
| to their mission and resilient to enemy action.
| randomdata wrote:
| _> simply because they get extinguished by others with
| more capital._
|
| Unless you go to where capital isn't concentrated (i.e.
| rural areas), then co-ops are everywhere. It is not
| uncommon to be able to get your groceries at a coop, your
| gas, your phone/internet services, you name it.
| apantel wrote:
| If labor and capital truly are in tension as so much of
| our social and economic philosophizing says, then it's no
| surprise that a structure optimized for labor is less
| attractive to capital.
| WalterBright wrote:
| > they instead invest in a traditional company because
| then they can extract as much as possible from their
| investments
|
| Sure. And workers extract as much as possible from their
| employers. And customers go for the lowest price
| possible, and sell their stuff for the highest price
| possible.
|
| That's how people are.
|
| In the 50s, my dad was in Italy watching the news on TV.
| A man had just won the lottery. The reporter asked him
| what he was gonna do with the money. Before he could
| reply, another man stepped in front of him, saying "he's
| a loyal member of the Communist Party, and he's going to
| give it to the Party!" The winner pushed him aside,
| announcing "Oh no, I'm not a Communist anymore!"
| carom wrote:
| There are plenty of successful companies that did not
| take outside investment, why are none of them
| cooperatives?
| renewiltord wrote:
| Coops work where they work and don't where they don't.
| Mutual insurance coops also have to fight traditional
| banks and single-owner insurers and they do just fine.
| State Farm is huge. Co-ops are just not good at some
| kinds of markets and so they lose there.
| li2uR3ce wrote:
| > companies need to attract customers - i.e. make their
| lives better.
|
| Companies need to sell the *idea* of making lives better.
| They don't actually have to make a customer's life better
| and many don't despite selling lots of product.
| Profitability is not a strict function of quality. If it
| were, we'd not give the slightest fuck about monopolies. It
| takes a great amount of effort to get companies to compete
| on "making lives better." If bettering lives is not the
| most profitable it is very often eclipsed by what is.
|
| It's much more complicated than the simple lie that "you
| get what you pay for."
| WalterBright wrote:
| Do you buy things you don't want?
| unbalancedevh wrote:
| People get convinced in the heat of the moment that they
| want something, when if they had time to
| reflect/research/etc. they might very well conclude that
| their money is better spent elsewhere. Marketing in a
| capitalist system is highly motivated to make you think
| you want or need something more than you actually do.
|
| One tactic that some people find helpful when they want
| to buy a discretionary item is to wait a few days/weeks,
| and make sure that it's not just a whim that they'd
| regret.
| WalterBright wrote:
| Watch TV commercials over the years. The older ones are
| laughable. They steadily get more sophisticated as the
| years go by. That's because the customers get more
| sophisticated, too. You might call it evolution in action
| :-/
|
| Political campaigns also get more sophisticated. Scott
| Adams has an interesting podcast where he breaks down the
| latest manipulative persuasion techniques used.
| rangerelf wrote:
| No, but it's very probable li2uR3ce bought things that
| were portrayed as being much better than they actually
| were. These days "profitable" for the seller rarely
| equates with "good value" for the buyer.
| WalterBright wrote:
| Most of what I buy is repeat purchases. If they weren't
| worth the money, I wouldn't buy them. Isn't it the same
| for you?
| shkkmo wrote:
| People like doing meaningful work that benefits their
| customers. I think that employee owned businesses tens to
| treat their customers better than companies that are owned
| by private equity, pension funds or other investors who
| never touch the product or interact with the customers.
| nradov wrote:
| When United Airlines was employee owned they didn't treat
| their customers better than competitors.
|
| https://www.forbes.com/sites/fotschcase/2017/04/17/united
| s-t...
| shkkmo wrote:
| The article you linked doesn't say anything to backup
| your claim. United was employee owned for a total of only
| 6 years. Employee ownership was institued over some
| employee objections and wasn't fully supported by
| management. The labor relation issues that caused the
| pilot strike and slowdown duering that period predated
| the employee ownership initiative.
|
| Nobody is saying that employee ownership is a magic
| bullet that fixes organization disfunction but data from
| that first year does show that it can have a positive
| impact of performance and customer satisfaction.
| tomp wrote:
| I think this is just your anti-capitalist bias showing.
| "Market" is meant in purely game-theoretic terms.
|
| _> The vast majority of people in companies are workers. Let
| 's stop optimizing for owner wealth and start optimizing for
| worker happiness instead._
|
| All these workers _could_ set up cooperatives and work for /
| own them instead. The fact that this hasn't happened suggests
| that in reality, the for-profit companies are better at
| optimising workers happiness than cooperatives (maybe they
| pay better? Maybe they enable more job hopping?)
| fileeditview wrote:
| I think that's a bad argument. Founding your own
| cooperative makes you kind of an entrepreneur but joining
| one doesn't. Most workers are joiners not creators in terms
| of companies. And I bet more than a few of them would
| gladly become a partial owner of the company they are
| working for.
|
| But there are so few cooperatives that the chance of you
| joining one is very slim anyways.
| Aeolun wrote:
| > The fact that this hasn't happened suggests that in
| reality, the for-profit companies are better at optimising
| workers happiness than cooperatives
|
| Or everyone is too exhausted from their daily grind to even
| consider doing so, which is honestly not very surprising.
| bialpio wrote:
| > All these workers could set up cooperatives and work for
| / own them instead.
|
| And some people do that (modulo creating coops), just not
| middle-class people. No-one without a decent cushion would
| be able to risk it. Especially with health care being tied
| to employment.
| consteval wrote:
| This only works if you assume we are in a free market. We
| are not, and no such market has ever existed.
|
| Setting up a coop versus setting up a company aren't on
| equal ground. One has clear legal roads, and the other is
| perceived as communism by 50% of Americans. Sorry, it just
| doesn't work that way.
|
| It's a similar argument I hear against unions - "well go
| work somewhere else!" The problem is that it's just not
| equal. Companies have infinitely more power and leverage
| than laborers. The labor market is EXTREMELY skewed in
| favor of companies.
|
| If we want the labor market to not be skewed like this, we
| will need to allow (and even force) laborers to unionize.
| That's just not gonna happen. In practice union busting is
| not only allowed, its perceived as a good thing.
| hellojesus wrote:
| > we want the labor market to not be skewed like this, we
| will need to allow (and even force) laborers to unionize.
|
| We already allow workers to unionize; a practice with
| which I don't agree. If we were to force workers to
| unionize, then we take away worker atonomy. I fail to see
| that as a benefit.
|
| I don't have anything against unions generally and am
| happy for companies to decide they will exclusively deal
| with unions to reduce their costs of negotiations, but I
| absolutely do have a problem with laws saying employees
| can decide to take away atonomy from their employer and
| force their employer to negotiate only with a union.
| consteval wrote:
| As I've said, we don't really because union busting is
| not only allowed but expected.
|
| The reality is that employers should not have such
| autonomy. What you're arguing is the right for an
| employer to necessarily hold more leverage in negotiation
| as opposed to workers. Which... isn't a right. It's an
| anti-right. As in, you want less rights for workers.
|
| Unions only work if they're enforced. Just like a right
| to life implies an anti-right to kill, a right to fair
| negotiations implies an anti-right for employers to
| choose not to negotiate with unions.
| hellojesus wrote:
| > What you're arguing is the right for an employer to
| necessarily hold more leverage in negotiation as opposed
| to workers. Which... isn't a right. It's an anti-right.
| As in, you want less rights for workers.
|
| No. My argument is that forcing companies to only
| negotiate with unions if that isn't want the company
| wants to do is an anti-right. It violates free trade. You
| disallow entity A from negotiating with entity B because
| entity C doesn't like it.
|
| > Just like a right to life implies an anti-right to
| kill, a right to fair negotiations implies an anti-right
| for employers to choose not to negotiate with unions.
|
| My point above is illustrated here. Person A being alive
| doesn't impact person B being alive, or person C being
| alive.
|
| Disallowing entity A from negotiating with entity B as
| entity C means that you are now infringing on entity A
| and entity B as an external third party.
|
| As entity C, you would be perfectly within reason to
| inform entity A you will not trade with them if they do
| not negotiate through entity D or if they negotiate with
| any of your peers through any channel other than entity
| D. Entity A would get to decide if you offer more value.
| But to be entities X, Y, Z and disallow entities A and B
| from trade is anti-rights.
| pembrook wrote:
| The point of a company is to make a product that customers
| want, and make it as accessible as possible. "Taking over the
| market" and producing profit is only a byproduct of doing
| that. A competitor would wipe out that profit if there
| existed a cheaper option that delivered the same value to
| customers.
|
| The minute you start optimizing for employees instead of
| customers, you're delivering less value to customers (the
| world) and asking to be disrupted. This is good.
|
| In the US a vast majority of adults now own index funds
| (either via their personal retirement or public pensions). In
| fact, the largest shareholder in almost all public companies
| is some index fund.
|
| So workers do own the companies, in proportion to how much
| value they deliver to the world due to market cap weighting.
|
| The system we have now has evolved out of thousands of years
| of humans battle-testing various other systems. The current
| form has taken pretty much the entire world out of
| devastating poverty at breakneck speed. Seems like we
| shouldn't redesign it based on the whims of armchair internet
| commenters.
| tempfile wrote:
| > The point of a company is to make a product that
| customers want, and make it as accessible as possible.
|
| Who says? What if we said the point of a company was to
| make its employees' lives better?
|
| > In the US a vast majority of adults now own index funds
|
| _in proportion to their wealth_. That 's the problem -
| ownership is distributed unevenly, and the inequality
| causes social problems.
| pembrook wrote:
| _What if we said the point of a company was to make its
| employees ' lives better?_
|
| Good news. The world spent the entire last century
| experimenting with that idea. It did not work out well.
| I've already explained why.
|
| But, you are of course free to start a company doing
| that. If it turns out to produce better outcomes for
| customers (the world), you will win and society will win!
|
| I'm guessing you won't test your ideas though, and will
| instead vote for authoritarian central planners who will
| deploy this straight to production via laws. Then your
| country will cease growing, and will be forced to slowly
| dismantle this worker-optimized system as a result. See
| Europe over the next 50 years for more info.
| Draiken wrote:
| What? We're into late stage capitalism and you're telling
| me the world was experimenting with making employees
| lives better? I must be living under a rock!
|
| Where are these so called experiments? I only see
| employee conditions getting progressively worse. If you
| go back long enough, we did get a few wins like weekends
| and some limits on hours after a lot of people died for
| it, but that's about it.
|
| The last change we had was probably WFH which only
| affects a small portion of people and, realistically, is
| only being accepted because it's cheaper for companies.
|
| >But, you are of course free to start a company doing
| that.
|
| I argue nothing different than the status quo can ever
| succeed without deep structural change.
|
| It's like trying to be a pacifist in the middle of a war
| zone. You will be killed. It doesn't mean there's
| anything wrong with being a pacifist, but it simply
| cannot work under those conditions.
|
| The part that people seem to forget is that we chose to
| value profits above all else. We can also choose to
| change that. Even if it's extremely hard to imagine this
| with all the propaganda we've been bombarded with in the
| past century, it's possible.
| danaris wrote:
| > We're into late stage capitalism and you're telling me
| the world was experimenting with making employees lives
| better?
|
| They're repeating propaganda about communism and
| socialism.
|
| It's tiresome, really, the degree to which Americans have
| bought the propaganda that countries like the Soviet
| Union themselves spread, that they were communist, when
| in fact they were authoritarian dictatorships with a few
| very-badly-thought-out planned-economy features.
| blackhawkC17 wrote:
| Of course those countries were never communist.
|
| True communism has never been tried, it will work this
| time around...
| tempfile wrote:
| It is easier to have a productive conversation if you
| actually address the points being argued, rather than
| dismiss them out of hand with no justification.
| blackhawkC17 wrote:
| The GP boldly said the Soviet Union wasn't communist.
|
| Please then, what was it? Capitalist? Feudal? Democratic
| socialism? I need a clear answer..
| tempfile wrote:
| I'm not sure why you think there will be a clear answer,
| since communism is not a word with a clear definition. It
| means many things to many people. It's no different to
| "capitalist" in this respect (and you often see lib-right
| people claim the US is "not real capitalism" because
| things like social security and govt bailouts exist).
|
| It's obvious that "communist" policies don't entail that
| you have the same government as the USSR, so I think it's
| fair to call arguments that suggest so propaganda. It's
| probably meaningless to argue about whether the USSR had
| "true communism".
| Draiken wrote:
| They don't want a clear answer. They never did, and
| likely never will.
|
| That's the problem with this type of topic. As much as I
| like to talk about it, there never seems to be any real
| talk. People pick a side and arguments be damned.
|
| The extent of their knowledge generally extends to
| "communism bad" and there's no good faith in actually
| talking about the shitty situation we're in today.
|
| My original answer was not even citing communism at all.
| I was specifically talking about worker conditions, but
| people seem to be unable or unwilling to have a
| conversation and instead degrade it and down vote.
| tempfile wrote:
| It's not authoritarian to outlaw unjust systems of power.
| I'm sure slave owners considered the US "authoritarian
| central planners" when they outlawed slavery. Doesn't
| make it wrong.
| pembrook wrote:
| This is a non sequitur. I'm not saying central planning
| in general is bad. Companies are an example of central
| planning. So are families.
|
| I'm saying communism is bad.
| tempfile wrote:
| It is not a non sequitur! You called them "authoritarian
| central planners". Am I supposed to think you consider
| "authoritarian central planners" a totally neutral phrase
| with no connotations? It's telling you mention central
| planning in your response, when I _objected_ to your use
| of authoritarian. If you had originally said "you will
| vote for <legislators> who will <implement laws>" your
| original comment is not quite as punchy, I think.
| EnigmaFlare wrote:
| Says the reason we have laws to enable companies to even
| exist. Society want them and it wants them because of the
| value they provide to everyone else.
|
| > in proportion to their wealth. That's the problem -
| ownership is distributed unevenly, and the inequality
| causes social problems.
|
| Maybe we should work on helping people to manage their
| tendency towards jealousy. One way is to have a culture
| of personal responsibility so that if you're poor, you
| believe (rightly or wrongly) that it's your own fault so
| you're not filled with hate for people who have more
| money than you.
| TaylorAlexander wrote:
| > The minute you start optimizing for employees instead of
| customers, you're delivering less value to customers (the
| world) and asking to be disrupted. This is good.
|
| You're describing a race to the bottom for quality of jobs.
| But in this system we all have to have jobs, so you're
| describing a race to the bottom for quality of life for
| most people. I think it is reasonable to question and
| discuss how we can better optimize our goals so that
| people's material needs are met but jobs also don't suck.
|
| > So workers do own the companies, in proportion to how
| much value they deliver to the world due to market cap
| weighting.
|
| This claim hides a great deal of assumptions about
| economics that are highly contested. For example the idea
| that how many shares you buy is proportional to the value
| you deliver assumes that workers with zero shares deliver
| zero value, which is obviously false. This also assumes
| that wealthier people, who own more of the shares in index
| funds, and delivering proportionally more value. Lending
| does have value, but it has limits. Imagine in the extreme
| case a company with 100 employees where 100% of the shares
| are owned by one person. Does that person provide 100% of
| the value?
|
| My point more directly is that worker's labor has value
| unrelated to ownership in shares, and simply offering stock
| options is not the same as a worker owned company, in
| practice.
| s0l1dsnak3123 wrote:
| I think this is a bit of a misnomer: what's being said is
| not to "start optimizing for employees instead of
| customers", but rather to keep customers where they are in
| the pecking order, and to re-align the owners in this
| dynamic. Customers are paramount, owners are less
| important, workers are what make the business move.
|
| I think workers should have a seat on every board; workers
| should have a right to first refusal - with a preferential
| price - on companies that are going through an exit; and
| that the state should provide an investment fund to allow
| for this to happen on the condition that the business be
| ran as a worker co-op.
|
| I think policy such as this would bring stability, long-
| term thinking, and more genuine customer empathy that isn't
| solely profit-driven, while reducing costs and driving up
| baseline wages.
|
| Democracy is important in our politics, but we spend more
| time at work than anything else. Therefore democracy should
| be part of our workplaces too.
|
| It's worth adding that none of this prohibits businesses
| from starting up and reaching the point where they exit
| with a handsome reward.
| Gormo wrote:
| > Customers are paramount, owners are less important,
| workers are what make the business move.
|
| No, no one is more important or less important than
| anyone else. Every role has to be played order for anyone
| to benefit. Someone has to bear the risk and pay the
| upfront costs; someone has to do the operational work in
| order to deliver value to the market and someone has to
| be willing to pay for the resulting product in order to
| generate net positive value for all participants. If any
| one of these items is missing, the entire initiative
| fails.
|
| So the participants negotiate arrangements that mutually
| incentivize each other to pay their parts satisfactorily.
| Whether those arrangements meet the speculative standards
| of uninvolved strangers' dogmatic ideologies is not and
| should not be relevant.
| s0l1dsnak3123 wrote:
| Sorry, I don't agree. Owners _are_ less important. They
| don 't need to be there for most businesses to continue
| to operate just fine. The same is simply not true when
| workers decide to down tools. Don't conflate ownership
| with steering and management. I don't think any owner
| should have some inalienable right to profit in
| perpetuity at the expense of everyone else including the
| customer. I think this is a very popular viewpoint for a
| reason.
|
| > So the participants negotiate arrangements that
| mutually incentivize each other to pay their parts
| satisfactorily.
|
| I don't think this is accurate. Stakeholders in a
| _founding_ business certainly do this in order to set the
| pace of initial growth and retain key staff.
| Organisations which are in the last stages of an exit do
| not act in the interests of the workers or the customer -
| they act in the interest of the party that is set to buy
| them and the major stakeholders set to profit the most.
| And whether it 's by destroying terms and conditions,
| laying off staff, or by slashing pensions, all of this
| serves the owners and major stakeholders at the expense
| of everyone else. Having a better distribution of
| ownership disincentivises these malicious activities.
|
| Studies show that cooperatives produce more stable,
| sustainable businesses which are not designed for short-
| term speculation.
|
| * Worker co-operatives are larger than conventional
| businesses and not necessarily less capital intensive
|
| * Worker co-operatives survive at least as long as other
| businesses and have more stable employment
|
| * Worker cooperatives are more productive than
| conventional businesses, with staff working "better and
| smarter" and production organised more efficiently
|
| * Worker co-operatives retain a larger share of their
| profits than other business models
|
| * Executive and non-executive pay differentials are much
| narrower in worker co-operatives than other firms
|
| Source: https://www.uk.coop/sites/default/files/2020-10/w
| orker_co-op...
| Gormo wrote:
| > Sorry, I don't agree. Owners are less important. They
| don't need to be there for most businesses to continue to
| operate just fine.
|
| I'm afraid that this is not true. Owners are not just the
| ones who enable the business to be initiated in the first
| place, but are the ones who bear risk on an ongoing basis
| in order to keep the business up and running. Firms that
| need ongoing capital infusions to expand operations, or
| that incur debt in order to get past short-term financial
| bottlenecks, _absolutely_ need someone to be responsible
| for the inherent risks associated with doing so.
|
| Eliminating the business owner as the risk-bearer, and
| setting up a business in which "workers" are the
| responsible parties makes workers themselves bear all the
| risk. In the status quo, the worst risk exposure that
| workers face if the firm faces financial difficulty is
| that they will just lose their jobs -- i.e. that the
| customer that has to that point been purchasing their
| services will simply cease making further purchases. But
| in a situation in which these service providers were the
| owners, and therefore responsible for the firm's
| obligations, they would not only lose their jobs but
| would also be on the hook to repay its debts and/or will
| suffer the loss of whatever funds they put into it to
| ensure it had sufficient capital to operate.
|
| Workers generally _don 't_ want to do this, and usually
| prefer to just receive an agreed upon rate for services
| rendered for as long as the relationship persists.
|
| You may note that the industries in which worker-owned
| co-ops are relatively common are the ones that have low
| risk inherent in the business model -- markets with
| predictable demand, long product life cycles, and
| relatively inelastic price sensitivity, e.g. grocery
| stores. Industries with high volatility, rapid
| technological change, short product life cycles, high
| need for capital, and elastic demand simply don't work
| well under a co-op model.
|
| > Organisations which are in the last stages of an exit
| do not act in the interests of the workers or the
| customer - they act in the interest of the party that is
| set to buy them and the major stakeholders set to profit
| the most.
|
| Ultimately, everything is just a proxy for consumer
| utility. A business that is acting in the interest of a
| potential buyer needs to ensure that the firm is
| performing viably, since the buyer usually aims to
| _operate_ it (or, if they aim to liquidate it, the
| current operators need to maximize the liquidation
| value).
|
| In either case, the only way to do that is still to
| _satisfy market demand_ -- we may frown at the tactics
| they use to do so, but ultimately, they will only use
| tactics that are effective in terms of encouraging
| customers to actually purchase their goods or services.
| At the end of the day, it 's still customers assigning
| more value to the product than to the money they are
| exchanging for it that enables the form to earn a profit.
|
| > Studies show that cooperatives produce more stable,
| sustainable businesses which are not designed for short-
| term speculation.
|
| Per my point above, I believe you have the causality
| inverted. Co-ops are only _suitable_ for stable,
| sustainable businesses that have low risk exposure and
| low capital requirements. The correlation you are seeing
| is because co-ops generally don 't participate in more
| volatile markets in the first place.
| chillingeffect wrote:
| >The minute you start optimizing for employees instead of
| customers, you're delivering less value to customers (the
| world) and asking to be disrupted.
|
| False comparison bc today's companies balance customer
| value with shareholder value. Collectives can do the same
| thing.
|
| The fatal scenario of companies optimizing for owner's
| benefit is in fact the scenario we have today where
| investor-owned companies benefits themselves more than
| customers, eg pollution, disposable plastic products that
| can't be repaired or maintained, like the millions of apple
| tvs that just become landfill overnight, fake shortages to
| raise prices, stock buy backs, low quality processed foods
| manufactured in at bliss point.
| Qwertious wrote:
| >The point of a company is to make a product that customers
| want, and make it as accessible as possible. "Taking over
| the market" and producing profit is only a byproduct of
| doing that.
|
| Um, what? The point of a company is to make profit for its
| investors, and making a useful product for the customer is
| only a byproduct of doing that. This is why corporations
| are making record profits, instead of investing it all into
| R&D or rainy day funds.
|
| https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wh
| a...
| ozim wrote:
| Apple has 160k employees - biggest holder of Apple stock is
| Vanguard that has 50M customers who are de facto owners.
| Let's skip other investment companies to make it easy and
| assume every Vanguard customer owns piece of Apple.
|
| By the virtue of your argument we should optimize owners
| wealth because there are more owners than employees.
|
| World is much much more complicated to be throwing simple
| arguments like that :)
| infecto wrote:
| 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.
| kerkeslager wrote:
| Why is number of startups a metric we care about?
|
| Are we just asking rhetorical questions that pick out one
| data point that we think supports our presupposed notions?
| vundercind wrote:
| ... especially when those startups are overwhelmingly
| outsourced R&D for monopolists, not in actual competition
| with those monopolists.
| piva00 wrote:
| 1. A larger, wealthier, cohesive consumer market sharing
| language, and culture.
|
| 2. A business-first, citizens-second approach to society.
|
| 3. Wealthier, and less risk-averse investors (ties back to
| point 2.).
|
| Simply put, very different societies (even more considering
| Europe is not at all a homogeneous block), with different
| priorities, both extremely wealthy by global standards.
|
| The question is more: which model is more sustainable as a
| society in the long-run, that play is still ongoing and we
| might not have a clear answer for the next 30-50 years.
| Gormo wrote:
| >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 monumental confusion of ideas.
| piva00 wrote:
| 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 (citizens, and
| businesses) don't have the same standards: morally,
| ethically, nor legally. Neither do they share the same
| needs, businesses can by eventuality support the needs of
| citizens to sell stuff but their only motive is profit-
| motive, not what's best for citizens.
|
| Business-first is a prerogative of how the USA approaches
| regulations, it's left first to businesses to regulate
| themselves until issues mount up to the point where
| regulations are needed, at that point the businesses have
| had time to amass power and fight against those. Even in
| the cases where regulation would be beneficial to
| society, even in cases where the current regulations
| which are business-friendly are damaging to society (US's
| healthcare is a clear example).
|
| It's only meaningless if you don't want to see what it
| means, citizens needs are considered below the needs of
| businesses as entities, it's a cultural trait of the USA
| to let businesses roam more-or-less freely (again, with
| the exception of some industries) until they cause enough
| damage to generate popular calls for them to be
| restrained, at that point is not clear if the government
| will be able to reign in them. Businesses in the USA have
| much more power than the people, they make policies, they
| donate enormous amounts to political campaigns, etc.
| Citizens can't play in the same field.
|
| There are many cases from the past decades: the global
| financial meltdown of 2008, the dysfunctional healthcare
| system, the opioid crisis fueled by a single pharma
| company, the nosedive of Boeing, etc.
|
| You can attack my point in many ways but not by saying
| "it's meaningless", businesses interests are, in many
| cases, not citizens' interests. A very clear example: if
| a business could they would not hire any Americans,
| simply because the workforce is expensive, shipping this
| labour outside of American borders would be great for any
| business' bottomline, it would not help at all society as
| a whole. They would do that even if it meant killing
| their own businesses, since there wouldn't be consumers
| to buy their products, it wouldn't matter until the issue
| was extreme enough to require them to actually create a
| consumer market by employing people in the country.
| Gormo wrote:
| > 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.
| jandrewrogers wrote:
| As a generalization, American culture is significantly more
| optimistic than European culture. The fixation of the
| latter on risk and the former on reward reflects baseline
| cultural assumptions about what the future will look like.
| Building a high-growth startup, or investing in one, does
| not look like a sensible decision to a pessimist and this
| is reflected in attitudes and behaviors.
| Gormo wrote:
| You are making normative arguments, but the question is
| wholly empirical -- the metrics being applied here are the
| ones that actually measure the success and viability of
| firms, not metrics selected to fit the observer's emotional
| attachments.
|
| Firms that are optimized for turning market demand into
| revenue streams will naturally outcompete firms that are
| optimized for other goals, regardless of what ideals or
| preferences anyone bears. This isn't something that anyone
| can decide upon, so a call to action based on one's own
| "ought" preferences isn't really meaningful.
| danaris wrote:
| That's what laws and regulations are _for_ : ensuring that
| entities that are trying to do the right thing and make
| life better for actual humans aren't "outcompeted" by
| entities that are trying to make things better for
| themselves at everyone else's expense.
| Gormo wrote:
| That might be what their proponents _intend_ them to be
| for, but the extent to which they actually achieve their
| goals -- especially goals at odds with the manifest
| intentions of the actual market participants, including
| workers themselves -- is another story entirely.
|
| If reality works one way, but aspirational idealists are
| trying to "ensure" that it works in some other way, then
| their attempts will falter. Many regulatory interventions
| are at best performative rituals that measure their
| success in terms of creating the appearance that
| something is being done, with the question of whether
| what is being done actually resolves the actual problem
| (if there is one) barely being considered. In the worst
| case, these performative interventions create harmful
| unintended consequences at the same time, leading to them
| being a net negative.
|
| It's worth noting, also, that nothing other than "actual
| humans" are involved in any aspect of this. There are no
| non-human "entities" in existence that have autonomous
| agency and participate in economic exchange. Every
| question here is about interactions among humans, and the
| organizational models that humans use to coordinate their
| activities are not separate "entities" with independent
| intentions.
| nindalf wrote:
| 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.
|
| Is your suggestion that the government go against the
| will of the people and apply those pro-worker-coop
| regulations anyway?
| bccdee wrote:
| > Is your suggestion that the government go against the
| will of the people and apply those pro-worker-coop
| regulations anyway?
|
| This litmus test is absurd. If more consumers buy
| products manufactured with child labour, is it "going
| against the will of the people" to ban child labour? Not
| in any meaningful way, certainly.
| eszed wrote:
| 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.
| baggy_trough wrote:
| It would be hard to sell bicycle helmets made out of
| cardboard and nails, so no collective recognition is
| necessary.
| Gormo wrote:
| 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.
| bccdee wrote:
| Success and viability within a system that is mutable
|
| > There's a large economics literature on this: worker-
| owned cooperatives have not taken over the market, although
| they are an available institutional form, because (a) they
| find it hard to raise capital
|
| There are any number of ways of making it easier for co-ops
| to raise captital.
|
| > (b) they tend to make decisions that maximize worker
| welfare rather than profit, e.g. they won't sack
| underperforming divisions or expand in ways that dilute
| existing workers' stake.
|
| You could make a similar case that making decisions solely
| around stock price leads to underperformance as well, if we
| quantify "performance" in terms of value provided to the
| broader economy. Mass layoffs are great for stock price,
| but they deal serious damage to your institutional
| knowledge base. Rather than simply shuttering an
| underperforming division, if you buy out the ownership
| stakes of the people working there, they'll have cash to
| re-train with. If we find that co-ops have a tendency to
| avoid doing that when necessary, we can tweak the
| incentives and subsidize a portion of the buyout, under
| certain circumstaces. Subsidies to tweak incentives are
| nothing new.
|
| > This isn't something that anyone can decide upon
|
| Yes, it is. Policy can change which strategies predominate
| in the market, by shifting incentives, by controlling
| streams of investment, and simply by regulating undesirable
| strategies out of existence. Mixed economies can be very
| effective. The notion that the market is a force which out
| to go untampered with is ideological, and it doesn't serve
| us well.
| sotix wrote:
| > The US cultural bias is showing here, as it's assumed that
| profit is above all else
|
| I asked my Greek teacher what they biggest change she
| experienced moving to the US was, and she said that in
| Greece, her community prioritized happiness above all else,
| but everyone she met in the US prioritized making money.
|
| I also asked her what the financial crisis was like in
| Greece, and she said that you couldn't find an empty seat at
| a taverna in her village on the weekends. They barely had any
| money, and few around her were employed, but they had certain
| priorities.
|
| Meanwhile in the US, I had a teacher condescendingly tell me
| that the Greeks were lazy (ignorant of the history that led
| to 2008). It can be hard to see through certain cultural
| biases. Particularly when the primary goals are so different.
| stavros wrote:
| Yeah, this is spot on. It's just that the priorities are
| different (even unemployed Greeks scrape enough money to
| have coffee with their friends), which can seem to
| Americans like we're lazy.
| pavlov wrote:
| I was recently in Lisbon and was surprised that an
| espresso still costs 70 cents despite the influx of
| tourists and expats. If it's the same in Greece, I can
| easily see how an unemployed person can afford to hang
| out.
| InitialLastName wrote:
| When I visited a rust belt city recently, it was amazing
| how many of the coffee shops and bars were still open of
| my preferred "sit and have a quiet conversation" variety.
| In my VHCOL city, where commercial rents are absurd, the
| only coffee shops/bars that can stay open are the ones
| that can drive tons of business (and thus push patrons
| through like cattle, with all cues pointing towards "you
| shouldn't be hanging out here").
| xeromal wrote:
| My buddy lived in greece for a bit and he laughed at how
| he could order a one euro coffee delivered to his room or
| office almost anywhere. He couldn't comprehend how it
| works.
| stavros wrote:
| It used to be 2.5 EUR or so, but now it's risen due to
| inflation. Keep in mind that in Greece, your family will
| also support you if you're unemployed, so it's not
| uncommon for parents to share their pension or children
| to share their salary with the family.
| renewiltord wrote:
| Yeah, one of the most notable thing about the HCOL US
| areas is that service employees are paid very well. By
| comparison, in India, 15 minute delivery at 3 AM costs
| relatively nothing.
| nradov wrote:
| It's tough to be happy when you're broke and worrying about
| whether you can get another loan.
| bayareateg wrote:
| I find that people often put on rose colored glasses when
| talking about the "old country," myself included. It is a
| little ridiculous to think that Greeks don't prioritize
| making money over some nebulous "community happiness"'
|
| You should have asked her why she came to the US
| hobs wrote:
| Pretty much every Greek that I have met (my father
| included) did it for a better future (money, no future
| with the military junta, american base left later.)
|
| Plenty of Greeks have no interest in going back because
| they want the "American" life, but there's no question
| you ate better in the village, had more community, or had
| a sense of history - what you didn't have was more than
| ~35k euros a year, if you were lucky.
| keybored wrote:
| > You should have asked her why she came to the US
|
| People sometimes have rose-colored glasses about
| emigrating to the US.
| WalterBright wrote:
| My dad was in the AF, and we rotated back and forth
| between the US and Europe. A friend of his married a
| British woman while stationed there, and took her back to
| the States when the tour was over. She endlessly
| complained about the US, and how Britain was so much
| better.
|
| Eventually, they were rotated to Germany. As soon as they
| arrived, she was off to England. 6 weeks later, she was
| back, and did not complain about the US again.
| keybored wrote:
| Legend has it that Walter can smell anti-Americanism in
| the water, in fact all the way to Germany.
| WalterBright wrote:
| My family did two tours in Germany (tour as in being
| stationed there by the military). If you're a military
| family, the military will move you all around the world.
| keybored wrote:
| Yes I guessed that AF meant Air Force.
| randomdata wrote:
| _> It is a little ridiculous to think that Greeks don 't
| prioritize making money over some nebulous "community
| happiness"'_
|
| She said that the people of her community prioritized
| happiness, not that the people prioritized community
| happiness. That might, for example, mean working less to
| enjoy more free time at the cost of maximizing profit.
| And, indeed, we can see in the data that the average
| worker in Greece takes 9 more vacation days each year as
| compared to their American counterparts.
| em500 wrote:
| According to OECD data Greece workers work the most hours
| in the EU, and in most years also more than American
| workers[1]. So by that metric they prioritize happiness
| less than most others?
|
| [1] https://en.wikipedia.org/wiki/List_of_countries_by_av
| erage_a...
| randomdata wrote:
| Or, perhaps, it isn't the happiness the person was
| referring to. After all, it was explicitly marked as an
| example, not what the person said. It could be that
| workers in Greece choose fun, but low paying, jobs to
| maximize happiness. Or maybe it is something else
| entirely.
| nanomonkey wrote:
| I'd assume that is because they take on jobs that they'll
| be happy with, instead of what ever job makes the most
| money. If you're content with what you do, you can do it
| sustainably for the rest of your life, if your only
| motivation to do your job is the money, then you'll burn
| out and retire early.
| victorbjorklund wrote:
| Not the case. People working in say fast food in Greece
| have 6 workday weeks (their weekends are just 1 day per
| week). Doubt people are more happy cleaning restaurant
| toilets in Greece vs the same toilets in US.
| em500 wrote:
| So if they work less hours than others it's because they
| prioritize happiness (grandparent's post), and if they
| work more hours than others it's alsmo because they
| prioritize happiness (your post)?
| mbrumlow wrote:
| Happiness. What hell is it even? It means nothing.
|
| Why? Because I am the most happy when working at a high
| paying job with loots of interesting problems to solve.
|
| I would be the least happy working at a high paying job
| with nothing to do.
|
| Happiness is a comparator, not a number. Money on the
| other hand can be counted, and thus can be measured. I am
| 100% sure every Greek ever would be more happy with more
| money given nothing else changed. Only somebody who found
| happiness through suffering would ask for less, and be
| more happy with less.
| coldtea wrote:
| > _Happiness. What hell is it even? It means nothing_
|
| Money means even less.
|
| > _Why? Because I am the most happy when working at a
| high paying job with loots of interesting problems to
| solve._
|
| Yes, people have been conditioned to be working.
| randomdata wrote:
| _> Money on the other hand can be counted, and thus can
| be measured._
|
| Not really. "1 money" is just a promise to deliver 1 unit
| of value in the future. But what characterizes the unit?
| What is the difference between one unit of value and two
| units of value?
|
| In reality, we don't really know. It's a continual quest
| to try and figure that out and it changes on a whim.
| sqeaky wrote:
| All of that is "I" and "me", not everyone. Happiness
| isn't meaningless, it just appears that you can't
| internalize someone else's internal state and understand
| how they might achieve happiness a different way than
| you.
| keybored wrote:
| Fascinating.
| geodel wrote:
| So "Greek are lazy" is condescending but _everyone in US
| prioritized making money_ is just fact?
|
| BTW there must be some interesting story that your Greek
| teacher had to move to US and deprioritize happiness.
| apantel wrote:
| People who want to make money above all else are pursuing
| that because they think that will make them happy. It's
| just their idea of the path that will get them to
| happiness. They see Mark Zuckerberg wakeboarding at his
| Lake Tahoe retreat and think, 'That's happiness -- having
| billions of dollars, not having to worry about meeting
| basic needs, being able to do what you want.'
| nox101 wrote:
| Zuckerberg doesn't get to do what he wants. He's in
| meetings constantly and rarely has a free moment
| sateesh wrote:
| But that is the choice he has made. I guess he can very
| well afford to have a less hectic schedule or to not work
| too.
| mattm wrote:
| He could step anytime he wants to. He's not someone who
| is going to work to make sure him and his family have
| food to eat.
| chasd00 wrote:
| i heard a quote a long time ago "money won't buy you
| happiness but it's more comfortable to cry in a
| Mercedes".
| Aunche wrote:
| > her community prioritized happiness above all else, but
| everyone she met in the US prioritized making money.
|
| I'd bet that she was wealthy relative to the average Greek,
| but was perceived as "regular" because they are middle
| class relative to the rest of the west. The wealthy in the
| the US can prioritize happiness above all else. On average,
| Greeks works the longest hours in Europe, which is more
| than the average American.
|
| https://www.nytimes.com/2024/07/04/world/europe/greece-
| six-d...
| negus wrote:
| > (ignorant of the history that led to 2008)
|
| can you share your version please?
| EasyMark wrote:
| Does this mean Greek Culture is better or simply different?
| I think that's the real question. And also better for whom?
| It's a judgement call. You can find communities (small
| towns) that are much closer to this style of thinking than
| in cities like LA or NYC.
| neutronicus wrote:
| If we're sharing anecdotes from Greek-Americans, a research
| advisor of mine said the biggest change _he_ experienced
| was getting a driver 's license without bribing anyone
| aiilns wrote:
| As a Greek, a) lots of people lost their jobs during the
| crisis, could barely make ends meet or even committed
| suicide; those people certainly didn't fill the taverns. B)
| It is true that Greeks won't cut on food/going out as
| readily as others.
|
| People in Greece certainly don't prioritize happiness
| instead of making money. There was a clear shift where
| Greeks became more and more unhappy after the (still
| ongoing) crisis. No1 problem is financial insecurity; as a
| resident (MD) I work 70-80hrs/week, for less than
| 7EUR/hour. Prices are comparable with rich EU countries.
| imgabe wrote:
| You are responsible for optimizing your own happiness. A
| company can't and shouldn't do that for you. Unhappy with
| your job? Find a different one. I don't presume to know what
| will make you happy and dictate to you how you need to live
| to achieve that and neither should you presume to do that for
| me.
|
| Some people are happy focusing on their family. Some people
| are happy working hard in their career. Some people just want
| a job to pay the bills and plenty of time to play video
| games. These are all fine and valid choices and no company is
| going to optimize for all of them.
| sqeaky wrote:
| It is easy to "find a new job" but things like healthcare,
| geographic location, and creditworthiness are tied to
| employment.
|
| If employment were more isolated this argument would still
| only be superficially reasonable, because we also live in a
| society with structural sexism and racism and other
| bigotries. Plenty of people have fewer employment options
| because of the circumstances of their birth.
|
| Then look at me, I am professional contractor and not the
| obvious target of any of those bigotries. 16 contracts
| (often 6 or 12 mo), in the past 20 years. of that maybe 3
| weren't complete shitholes. How long is one person supposed
| to keep making major life changes to search for a job that
| doesn't abuse them? Because a 1 in 5 hit rate implies some
| things.
|
| Setting a floor on how shitty companies can be to their
| employees would a boon to everyone and likely make the
| whole economy more productive simply by reducing depression
| by a double digit percentage.
| imgabe wrote:
| > Setting a floor on how shitty companies can be to their
| employees would a boon to everyone and likely make the
| whole economy more productive simply by reducing
| depression by a double digit percentage.
|
| Yes, we do that. It's called "labor laws". There are many
| of them.
|
| It's a question of agency. If you assign responsibility
| for your well-being to others, then you're always going
| to be at their mercy. Sure, there's structural whatevers
| and bigots and all sorts of things. Some people won't
| hire you because you remind them of the kid that bullied
| them in 3rd grade. Whatever. It's still up to you take
| control of your life. Nobody else is going to do it for
| you. Every time you try and demand that someone else do
| it for you, you are going to end up disappointed.
| sqeaky wrote:
| No need to be so absolute no one is "assign[ing]
| responsibility for your well-being to others", there are
| grey areas and gradients and employment is fundamentally
| full of those.
|
| No one person can be an expert in everything, we live in
| a society and should act like it. Needing to be an expert
| in healthcare, hiring processes, finances, and a dozen
| other topics just to switch jobs is a major barrier to
| the just switch mentality you are presenting. And I know
| first hand, I am just switching constantly because it is
| what I wanted. We should have reasonable baselines and
| minimums for treatment, and those should shift and get
| better as we improve society.
|
| > Every time you try and demand that someone else do it
| for you, you are going to end up disappointed.
|
| Yet there are countries that have better situations for
| labor than the US?!
|
| Even something as simple as universal healthcare would
| fix a ton for millions of US people. It would empower
| worker to switch jobs and employers to lure top talent
| held by it. Only a hundred or so other countries figured
| it out, there is no way we could do it here we would only
| end up disappointed, right?
|
| I pick that as an example, but we could go over many
| possible topics that aren't blanket assignments of
| "responsibility for your well-being to others". Consider
| non-compete clauses, IP transfers, minimum wage and tons
| of other topics that if they had a minimum floor of
| decency could allow more freedom the the worker and
| employer.
| imgabe wrote:
| > Needing to be an expert in healthcare, hiring
| processes, finances, and a dozen other topics just to
| switch jobs is a major barrier to the just switch
| mentality you are presenting.
|
| Nobody is saying you need to be an expert in all of these
| things to switch jobs. Consider the fact that very few
| people, if any, are actually experts in all of these
| things and yet people do in fact switch jobs all the
| time. Empirically, it is not required.
|
| > Yet there are countries that have better situations for
| labor than the US?!
|
| Better in some ways. Many of those countries are
| significantly less productive and have moribund,
| declining economies and low pay compared to the US.
|
| > Consider non-compete clauses, IP transfers, minimum
| wage and tons of other topics that if they had a minimum
| floor of decency could allow more freedom the the worker
| and employer.
|
| non-compete clauses: don't sign them. I've never
| encountered one. Negotiate terms that you feel are
| adequate to compensate you for not competing. If you
| don't have sufficient leverage to negotiate, work on
| that.
|
| IP transfers: again, don't sign it, or negotiate. Most
| workers will never generate any significant IP so this is
| rarely an issue. If you are going to generate valuable IP
| that is 100% due to you, then start your own company.
|
| Minimum wage: less than 1% of workers make minimum wage.
| Anyone with a pulse and half a brain can quickly become
| more valuable and qualify for higher paying jobs. Just be
| organized and responsible enough to be an assistant
| manager at a fast food place and you're already making
| more than minimum wage. There are store managers at Wal-
| Mart and Buc-ees making $250k.
| sqeaky wrote:
| > Nobody is saying you need to be an expert in all of
| these things to switch jobs. Consider the fact that very
| few people, if any, are actually experts in all of these
| things and yet people do in fact switch jobs all the
| time. Empirically, it is not required.
|
| You vacillate between personal responsibility and
| skipping requirements, which is it? Should we take you
| seriously or not?
|
| You do understand that when I say people need to be
| "Experts" I don't mean hold Phds, I mean they need to be
| far more well read and have a much deeper understanding
| outside of core competencies than our contemporaries
| elsewhere in the world. They get to focus on family or
| work, and I need to understand 50 pages of contract
| nonsense to sort out how screwed I am on this interstate
| tax law and why my health insurance won't pay.
|
| > declining economies and low pay compared to the US
|
| You looking at the median income or the mean income?
| Because if you cut out a few billionaires the US Mean
| drops by like 20%. If you look at median we are in line
| with Countries like Canada and Western Europe who have
| better worker protections and are doing fine
| economically. (And they have healthcare so insurance
| doesn't pin them to one job for fear of literally dying)
|
| > non-compete clauses: don't sign them. I've never
| encountered one.
|
| You are arguing specifics (and doing it incorrectly)
| while I am showing you a forest of problems and you go
| after each tree with an axe ignoring that there is a
| whole forest.
|
| On this specific tree. Some states banned non-competes.
| Some people do run into them. Some people do. Some people
| have no real options without them. Some people signed
| them in the past not fully understanding them (because
| they weren't IP law experts). I am not saying these
| should go away I am saying there should be a floor for
| how hard employers can screw workers so that someone who
| isn't a legal expert isn't forced out of their profession
| in a moment of desperation.
|
| Fundamentally, in the forest of problems you are arguing
| "I have leverage so this works for me" and ignoring all
| the people who must say "I have no leverage except for my
| labor and I am willing to work hard, but I sure hope the
| system doesn't screw out of these hard earned pennies".
| imgabe wrote:
| > You vacillate between personal responsibility and
| skipping requirements, which is it? Should we take you
| seriously or not?
|
| You misunderstand. These things you claim are
| requirements are not requirements. You do not need to be
| an "expert" in health insurance or interstate tax law.
| Mostly you just need to read and follow the basic
| instructions for those things that the experts already
| wrote out for you. You think countries in Europe don't
| have bureaucracy? I live outside the US in a country with
| public health care. It's nice, but it doesn't mean you
| never have to spend time navigating a bureaucracy, I
| promise you that.
|
| > You are arguing specifics (and doing it incorrectly)
| while I am showing you a forest of problems and you go
| after each tree with an axe ignoring that there is a
| whole forest.
|
| Yes, because this is actually how you solve problems. You
| look at each individual problem and say "Hmm, what can I
| do about this?" Then you think up a solution and do it.
| Vague hand-waving at a group of problems while saying
| "Gee, _someone_ should do _something_ about all this
| mess! " doesn't actually accomplish anything.
| AnimalMuppet wrote:
| If coops make it harder to raise capital, then they make it
| harder to invest in new tools, which makes it harder to
| increase productivity.
|
| Workers keep more of the profits but there's less produced so
| there's less to buy? That doesn't actually make workers'
| lives better.
| osigurdson wrote:
| >> optimizing for making a company that makes the workers'
| lives better
|
| Companies should not deliberately make workers lives bad.
| But, optimizing for the worker seems fundamentally unworkable
| as this would essentially mean financial independence at the
| time of hiring followed by bankruptcy.
| giantg2 wrote:
| "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."
|
| It's possible companies with lower profits don't survive when
| they can be outcompeted by the higher earning companies. This
| sort of competition has killed plenty of companies.
| WalterBright wrote:
| > we should be optimizing for making a company that makes the
| workers' lives better
|
| In the US, you are free to set up a company any way you like.
| conradev wrote:
| How do you make decisions where firing 10% of the workforce
| is good for 90% of the company's happiness?
| f6v wrote:
| > note that you are calling for a restriction on workers'
| rights: they have to be given part of their pay as stocks
|
| No matter the mental gymnastics, that's how it already works in
| big tech. You can view the stock grant as "incentive", but you
| can't refuse it and take cash upfront.
| coderatlarge wrote:
| You can generally negotiate for more cash instead of a stock
| grant. Of course you have to accept the current price. I've
| done it and lost a lot :)
| IneffablePigeon wrote:
| > they tend to make decisions that maximize worker welfare
| rather than profit
|
| Oh no
| Gooblebrai wrote:
| > they tend to make decisions that maximize worker welfare
| rather than profit
|
| That this a "con", says something worrying about the values
| that, as society, we have decided are more important
| bootsmann wrote:
| It maximizes _current_ worker welfare, not global worker
| welfare, don't confuse the two.
| jrnx wrote:
| > (a) they find it hard to raise capital (b) they tend to make
| decisions that maximize worker welfare rather than profit
|
| at the end a company needs to be financially successful and for
| this it needs to provide competitive products and services.
| Otherwise, they'll just be replaced.
|
| There of course may be a chance they'll get replaced by another
| employee owned company, but the odds of a free-capital owned
| company replacing them are probably bigger as they have more
| freedom to make the right decisions to become successful.
|
| Also imagine your pension would just depend on the odds of the
| company you have been working for a live long, because you just
| cannot invest into other companies because they are only owned
| by employees.
| aziaziazi wrote:
| My pension depends on other members of my country, as well as
| they depend on my. The feeling of safeness (event if it's not
| 100% safe) and bound is what I call "society", meaning we go
| forward together very much like what most feel with their
| family. Never ever will I live in a country that encourage
| people to compete instead of collaborate, it sounds better
| for the 1% stakeholders but not for the 99% others.
| jrnx wrote:
| I wish it were that simple... even if everyone tried to
| "collaborate" to produce the same product, there would
| still be some competition somewhere, at least for ideas.
| somehow the final products to be made need to be decided
| upon and the other won't be made. That also means, that
| somehow the people overseeing the final products have more
| power than the ones that were not chosen by whatever
| process is in place to make those decisions...
|
| It really has not been proven, that there is a more
| effective organisational form for this competition better
| than capital allocation using markets with a lot of
| freedom.
|
| For your case or "cross-generational" pensions where the
| young pay for the pensions of the old: That worked well
| while the baby boomers were working. This may go sour when
| the baby boomers retire and the numbers of their first and
| second generation of offspring decline... Even worse: if
| they have made the economy, tax and debt burden for those
| offspring so bad, they can barely buy their own home.
| yieldcrv wrote:
| There are additional options
|
| Co-determination was born as a compromise in Germany (between
| the capitalist occupiers and the communist occupiers trying to
| find common ground for decades) that has done well, essentially
| its that the Employee Union has at least one board seat, by law
|
| employee representation on the board in combination with US
| stock ownership concepts would be very novel and very
| attractive
|
| I think both classes of stakeholders typically have some common
| ground and can find a way to make austerity and growth measures
| economically practical with more sustainment of employee
| consideration
| dash2 wrote:
| It's possible. But note that Germany has struggled to move
| out of declining sectors (petrol cars) and into new ones
| (tech) - which fits what I said about worker control making
| creative destruction hard. Its economic performance has been
| dramatically bad recently.
|
| Equally, I wouldn't want to judge Rhineland capitalism on a
| few bad years, or claim that the US "open the casino"
| approach dominates it on every dimension.
| yunohn wrote:
| The whole world still relies on and builds petrol cars. EVs
| are still a small portion of the global market.
|
| I think it's quite disingenuous to blame Germany's slow
| moving industry sector on "worker's control".
| dgb23 wrote:
| I've read studies about workers coops and some of them somewhat
| contradict what you say in your last paragraph, specifically
| (b). Worker coops often cut down on their individual profits in
| hard times to keep the boat afloat.
|
| I think ultimately a company creates and maintains a culture,
| regardless of the legal structure. Maintaining a good culture
| requires effort and especially a sensible, trusting image of
| humanity.
|
| When we talk about the crass gap in compensation and power
| between workers and owners or executives, then we often hear
| the excuse that much of the compensation at the top is from
| stocks (even though that is a very incomplete picture). The big
| bosses can't just sell their stock to increase wages is the
| narrative, but they _could_ pay some of that stock as
| additional compensation.
|
| A single worker doesn't move the statistical needle in a very
| large corporation? For one, the same fallacy comes up with
| voting. Secondly: This notion that people are rational robots
| who only optimize their profits and then also calculate the
| statistical impact of every of their actions is not just too
| theoretical, it's just wrong. Loyalty, trust and engagement are
| things you earn and maintain. A generous compensation
| (including stocks) can be a part of that.
|
| An additional approach is to decentralize and enable partial
| ownership of franchises. Now suddenly the needle can be moved,
| day by day and year by year.
|
| But again, the legal structure is just part of it all. I think
| it starts with the image of humanity, the culture and a long
| term strategy that incorporates all participants of a company.
| The details fall into place after that.
| dash2 wrote:
| > Worker coops often cut down on their individual profits in
| hard times to keep the boat afloat.
|
| Sure, I believe that. Do they do it enough though? Co-
| operatives were big in 19th century Britain; now they make up
| a small part of the market for most things. In particular the
| Co-op supermarket, though it's cute, is now small (6% market
| share).
|
| > A single worker doesn't move the statistical needle in a
| very large corporation? For one, the same fallacy comes up
| with voting. Secondly: This notion that people are rational
| robots who only optimize their profits and then also
| calculate the statistical impact of every of their actions is
| not just too theoretical, it's just wrong. Loyalty, trust and
| engagement are things you earn and maintain. A generous
| compensation (including stocks) can be a part of that.
|
| It's really true that your vote won't decide the next
| election! I'm sorry :-)
|
| You're right that generous compensation can maintain loyalty
| and I agree people aren't robots. But for that to save the
| argument you need more - stocks have to be better at
| maintaining loyalty than just straightforward pay. Is that
| true? Maybe: stocks are a "stake" in the company. Is it so
| true that many companies could improve efficiency by paying
| in stocks not cash? I'll believe it when I see evidence. Is
| it so true that we should force companies to do it? I find it
| highly unlikely and the evidence is clearly inadequate.
|
| >An additional approach is to decentralize and enable partial
| ownership of franchises. Now suddenly the needle can be
| moved, day by day and year by year.
|
| Sounds like McDonalds is your ideal of corporate structure
| :-) Maybe! It's certainly successful.
| vidarh wrote:
| Coop is not a worker cooperative. It's a consumer
| cooperative, owned by its members, not workers.
| dash2 wrote:
| Thank you for this info! This is true, but workers can
| join for just PS1, so I would expect very many workers to
| be members too: https://colleagues.coop.co.uk/colleague-
| membership-informati...
| vidarh wrote:
| I'd presume _most_ workers are members, but they have ~5
| million members and about 56k employees, so even if all
| of them are members they amount to ~1% of the votes.
|
| EDIT: In the UK, the most prominent retail workers coop
| _of sorts_ is the John Lewis Partnership. It has more
| employees than Co-op, at ~80k (in addition to John Lewis
| and Peter Jones it owns Waitrose), and it could be argued
| that in some senses it may not _strictly_ be a workers
| coop - it 's owned by a trust for the benefit of the
| workers of the business so its employees does not have
| the same direct say in the operation as a pure workers
| coop - but the terms of the trust makes it somewhat
| close.
| pjc50 wrote:
| The big survivor is actually John Lewis.
|
| The history of the mutual/building societies is interesting
| - customer owned financial institutions. The stock market
| offered them a _huge_ amount of money to sell up in the
| 90s, which almost all of the customers took (after all,
| free money). Then 2008 hit and a lot of them had to be
| bailed out by taxpayer loans.
| enugu wrote:
| > fully employee-owned
|
| There are more possibilities which open up, if we drop the
| 'fully' criterion, both for decision making power and share of
| the profits.
|
| If employees had, say, a 30% share in board decisions (not
| share of profits), then the CEO would have to be more mindful
| of how their decisions affect employees, just like they have to
| constantly track the markets today. Or a more local version of
| this, where decisions/appointments in each unit of the company
| are partially handled by employees of that unit. Not enough for
| a badly performing group of employees to have a veto, but also
| not something ignorable by management.
|
| Regarding share of profits, there were high tax regimes in
| Western countries in the 1950-70's. For instance, top bracket
| of income tax could sometimes reach 90% and corporate tax 50%.
| In effect, this is saying that the public has a non-voting
| share(sometimes even a majority share) of the profits of the
| company. Of course, a large organization like the government is
| itself often corrupt/inefficient and fails to represent the
| public, so the taxation could happen at a more local level.
|
| 'Market socialism' proposals sometimes involve public ownership
| of the stocks of privately run companies, but a high tax regime
| can have a lot of the same effect.
| cen4 wrote:
| Now please use the barista argument on what house wives should
| be paid.
| beambot wrote:
| Turns out you can't project human values into a single
| (monetary) dimension...
|
| Similarly, my estimate of the value of my life (infinite)
| differs from how society would broadly estimate it actuarily.
|
| Such is the nature of things.
| cen4 wrote:
| Nature of things is always changing. Once upon a time the
| King or Land Lord or Factory owner handed off all the
| shares to the eldest son. Doesn't happen anymore.
|
| Also remember Bezos and Gates had to hand over a chunk of
| their wealth on divorce. That didn't happen without the
| nature of things changing.
| phkahler wrote:
| >> ...what house wives should be paid.
|
| House wives are often very well compensated. They have a home
| they don't pay for. They often have a bank account they can
| use to cover expenses (effectively direct deposite). The
| entire reason alimony exists is an acknowledgement that she
| has effectively been getting that benefit from the marriage
| and is not prepared to abruptly lose it in a divorce even
| after splitting the assets. Assets? Right, that's also part
| of the compensation package.
| cen4 wrote:
| Domesticated animals are also housed and taken care off
| very well. Their appearance is beautiful and they are very
| grateful to their masters.
|
| The circus lion is bred and trained from birth not ask too
| many questions.
|
| But once you give the circus lion access to the internet,
| sooner or later the lion is going to ask why am I jumping
| through hoops?
|
| It just take one of them to find a better answer and a
| better purpose in life to walk off the circus, for all the
| others to see what options they have to totally disrupt the
| foundations of the circus.
|
| The circus managers and the circus have elements of
| domination and exploitation that have been swept under the
| carpet. Its good to recognize them. Otherwise surprises and
| shocks are on the road ahead.
| jack_pp wrote:
| I'm sorry but how many men do you think enjoy the work
| they do in order to provide for their family but do it
| anyway in service of their family?
|
| Your analogies are all over the place, like a dog's life
| is similar to a circus tiger?
|
| A lot of women find that they've been sold this lie that
| getting a corporate 9-5 is more empowering than caring
| for their children or even having children at all and are
| going back to traditional roles for a reason.
|
| Truth is few people men or women find a way to support
| themselves that is meaningful and most men or women if
| given the choice of not working at all and just spending
| time with family while financially well off would take
| that in an instant
| cen4 wrote:
| Those who can escape the construct will do so. The number
| of routes available have increased thanks to
| globalization. You are not being imaginative enough. Look
| at people who don't have opportunities in their
| countries. Do they sit there and cry we don't have
| opportunities or are they moving? People are watching all
| this on their streams 24x7. And one thing people are good
| at is blindly copying what others are doing. Those who
| are clinging to the status quo are totally delusional
| about what globalization has done to the West.
| jack_pp wrote:
| What construct? Having a job is also a construct and it
| seems it's the dominant one. 26% of women are housewives
| [1].
|
| The status quo is working mothers, are you a chatbot that
| thinks this is the fifties?
|
| I'd say you are being too imaginative. You are framing a
| traditional family as this abusive thing, master and
| slave except it's 2024. Marriage, at least in the US is
| extremely dangerous to men, if their wives divorce them,
| men could be forced to support them or else go to jail so
| who really has the power in the relationship since the
| govt has given all the power to women?
|
| 1. https://www.pewresearch.org/short-
| reads/2023/08/03/almost-1-...
| keybored wrote:
| > The entire reason alimony exists is an acknowledgement
| that she has effectively been getting that benefit from the
| marriage and is not prepared to abruptly lose it in a
| divorce even after splitting the assets.
|
| Perhaps partly. But there's also the loss of professional
| work experience if she has been a full-time housewife.
| Qwertious wrote:
| The word "housewife" is interesting - the job of housewives
| has historically been to spin thread and make clothes, which
| was _at the bare minimum_ 40 hours a week of work. This is on
| top of cooking, cleaning, and childrearing, which was its own
| full-time job.
|
| There's this myth of the idle housewife which _was_ true, but
| only for the aristocracy and in the last few decades, the
| upper middle class (who are tooootally separate from the
| aristocracy, yes sirree). Most housewives, for most of
| history, have worked full-time.
| phkahler wrote:
| This isn't about stock options or public markets. These kinds
| of companies are _owned by the employees_. You or I can not buy
| stock in them. This can be a much bigger incentive than regular
| options or the toilet paper options startups offer. Payout is
| over several years after you leave, so people care about the
| long term rather than next quarter. From your comment it seems
| you 're not at all familiar with this model. It's not perfect
| but it's way better than stock options.
| choeger wrote:
| > You or I can not buy stock in them.
|
| But that means employees cannot sell their stock, either. So
| if one of those millionaire employees retires and the company
| goes bankrupt one year later, the million is worthless all of
| a sudden.
| t0mas88 wrote:
| I think the idea is that employees make most money from the
| profits paid to them as owners, instead of an increase in
| the stock price and then selling.
| Nevermark wrote:
| There is no difference for optimizing dividends vs. stock
| value increases due to reinvestment, as for any other
| company.
|
| Employees that can sell shares at any time have the same
| financial interests as with any other corporation. As
| much reinvestment as grows value faster than the overall
| market is how much is best to reinvest.
|
| Distribute the rest to owners to use/invest elsewhere.
| thanksgiving wrote:
| It sounds like you just explained the opposite of what
| you said. If you can only get the dividends and can never
| sell your ownership outright, it makes sense to optimize
| for long term, sustainable growth and profits over short
| term profits. So, you don't care about stock value
| increase as you already own your shares. Actually, I'm
| thinking low share prices compared to dividends are good
| because it allows you to buy more and earn more.
|
| It sounds like this is a much healthier concept overall?
| s1artibartfast wrote:
| They are the same with respect to long term planning. You
| can take a dividend or sell stock to witdraw profits.
|
| Dividends don't have to be sustainable. There are
| companies that are gutted and liquidated to pay out
| dividends too.
| empath75 wrote:
| Companies frequently make no profits. Imagine missing
| your rent payment because your company had a bad quarter.
| PopAlongKid wrote:
| Profits and operating cash flow are two different things.
| Only the latter matters in terms of meeting payroll. Very
| few companies of any kind cut pay or lay off employees
| just because they "had a bad quarter." Even when there is
| a bad year or two (such as during coronavirus pandemic),
| the government will usually step in and offer generous
| tax credits to try to keep employees working.
| kaibee wrote:
| Are... are you familiar with layoffs? Y'know, that thing
| companies do where they stop paying you and you don't
| have a job anymore?
| charles_f wrote:
| > Every worker gets a salary but also a percentage of
| their salary in stock ownership
|
| That's in the second paragraph. I don't know what the
| fixation is in finding problems with paying more the
| people who produce what the company sells.
| phkahler wrote:
| >> So if one of those millionaire employees retires and the
| company goes bankrupt one year later, the million is
| worthless all of a sudden.
|
| Right, so everyone is interested in the long term health of
| the company.
|
| It's a different model, one that may well be better than
| what most are doing. Of course most CEOs, private equity,
| and folks on Wall Street want you to think otherwise.
| enoch_r wrote:
| Everyone is certainly _interested_ in the long term
| health of the company. But exogenous shifts like
| technological change, trade, COVID, etc. might cause the
| company to go under - or maybe you 're just outnumbered
| by people who make poor decisions.
|
| If this happens, people who have worked at the company
| for 15 years and have most of their "retirement" in the
| form of ESOP shares will a) lose their jobs and b) lose
| most of their retirement savings. On the same day.
|
| Libertarians sometimes fantasize about how if we didn't
| have the FDA, people would be incentivized to do their
| own research on food and drug safety. Sure, sometimes
| dumb people would get it wrong and kill themselves! But
| that's just the price we (well, they) need to pay for
| everyone to have good incentives. This seems like the
| same category.
| mkbosmans wrote:
| Nothing requires an ESOP to skip on a separate retirement
| fund for employees and expect them to retire from their
| share of the investment.
|
| In the contrary, I expect the owners of an ESOP are very
| much in favor of having a well managed separate employee
| retirement fund. More so than in a publicly owned
| company.
|
| But of course you are right that the risks factors of
| losing your income and losing your investment are pretty
| much 100% correlated for an ESOP. Some investment
| diversification is always a good idea.
| bluGill wrote:
| The problem is most employees don't have enough control
| to do anything about bankruptcy. Even if you see it
| coming you can do nothing about it from your position.
| seeing it coming is also hard as employees are rarely
| given that information - odds are a significant chunk of
| employees find out about the bankruptcy via the nightly
| news when it is too late. Once you have hindsight it is
| easy to look back at the financial statements and see it
| coming, but most people are not qualified to read those
| statements and so won't understand what they mean - or
| how a bankruptcy event looks different from normal ups
| and downs.
| rakoo wrote:
| > The reason not every company does it to all its employees is
| probably that for those employees, it wouldn't affect
| incentives much and it would make payment subject to the
| vagaries of the stock market.
|
| Pleast don't be so naive. The reason not every company does
| that is that giving ownership gives power and dilutes your own,
| reduces the chances at doing humongus profits that can be
| hoarded by a minority. Business owners are not operating out of
| sympathy for the workers, they are operating for themselves,
| _by design_
| zby wrote:
| And yet people overwhelmingly prefer to work for these non-
| employees owned companies instead of working in cooperatives
| - how do you explain that? They could take those humongous
| profits for themselves but they don't do that.
|
| My answer to that question is that organizing people is much
| more difficult than everybody thinks and politics is the
| biggest source of inefficiencies on any human organisation
| bigger than a few persons. And cooperatives introduce
| additional political layer.
| chronofar wrote:
| > And yet people overwhelmingly prefer to work for these
| non-employees owned companies instead of working in
| cooperatives - how do you explain that?
|
| Easily: there are far more non-employee owned companies
| than employee owned. Thus this isn't a preference at all,
| it's merely the availability of the market.
|
| Now you could say that entrepreneurs who start companies
| have a preference for non-employee owned, thus explaining
| the aforementioned market allotment. Again that's pretty
| easy to explain, because of course such an entrepreneur
| would give up ownership in an employee-owned arrangement.
| It's also just the de facto paradigm most are aware of in
| news cycles and business schools, and is easier to setup
| and support.
| peepee1982 wrote:
| Not so many cooperatives to apply for, are there? Otherwise
| I would definitely prefer worker owned.
| zby wrote:
| But you can create one? If many people wanted to join a
| cooperative - then it should be easy to do?
| rakoo wrote:
| Please, again, don't be so naive. You _know_ that
| creating a company requires capital (not just financial,
| all of them), which only the richest have. By design.
| bialpio wrote:
| Good idea, I'm gonna quit my job today and start my own
| coop with all the earnings my current employer shared
| with me! Oh, wait...
|
| Seriously though, most people cannot afford to just quit.
| You at least need savings for that, and you need to be
| fine with burning through them and still failing, cause
| that's a very real possibility.
| Workaccount2 wrote:
| Risk. Risk is the reason people aren't constantly demanding
| equity.
|
| Equity is great when your base salary covers your
| comfortable life.
|
| Equity is not great when your salary or hourly doesn't
| afford you much, and having inaccessible capital that very
| well may be worthless in the future is not desirable.
|
| When people talk about this topic they hyper focus on
| success cases. But HN should be intimately familiar with
| how well start-up equity offers usually pan out.
|
| And large stable companies usually do offer equity to
| employees, but that slow stable growth equity is not going
| to make you rich.
| vhiremath4 wrote:
| Totally agree. And this is why companies should really
| profile when hiring to attract the right people with the
| right risk profile given the stage of the company.
|
| Early on when we were just starting out (context as a
| founder), I used to think that the only types of people
| who would take on this kind of risk were young
| 20-something's who had time and space and no significant
| other. Then we hired 2 early engineers in succession who
| were older.
|
| One was just made for startups. He could never work for a
| large company, and he was ok with the risk and lower pay
| because it was still quite high relative to his cost of
| living in Europe.
|
| The other already had kids who were older and
| independent. He always wanted to take a swing at a
| "Silicon Valley" startup, and he just cared deeply about
| that experience and could do so without having to worry
| about his kids financially relying on him.
|
| They were 2 of the best engineers we had ever hired and
| stuck with us through thick and thin from a team of < 5
| engineers through us scaling to 80+. When we got bigger,
| one left because we were once again too big for him
| (process, minor politics popping up, spending more and
| more time teaching newcomers how to own and operate a
| bigger codebase safely, etc.). The other left because of
| similar reasons but at a later scale.
|
| I started the journey starry-eyed/overly-optimistic in
| both directions. Hiring people early on who obviously did
| not have the risk tolerance or an understanding of how
| much work was needed early. Holding on to people for too
| long who weren't enjoying the new environment. Now I'm
| much more even about this - there is a right place and
| time based on what the individual wants, and being open
| and honest and kind about it is always the best path.
| Equity is simply a lever to compensate risk, but the
| appetite to take on the right amount of risk is the most
| important thing given the company's scale.
| neutronicus wrote:
| On this same note:
|
| Employment is _already_ a pretty bullish position on the
| employer. Adding equity is doubling down. If the company
| goes under, you lose your future wages _and_ the
| investment in the equity.
| BeFlatXIII wrote:
| > yet people overwhelmingly prefer to work for these non-
| employees owned companies instead of working in
| cooperatives - how do you explain that?
|
| Really? Or are there simply far more non-coop job openings
| available? Is there data on the applications per listing
| that directly compares ownership structures to normalize
| for workforce size?
| dash2 wrote:
| I'm not naive. Owners also don't pay _wages_ out of sympathy
| for workers. When they give away wages, they give away
| profits _directly_. If anything, short-termist managers might
| prefer to give away rights to future profits, rather than
| profits today. Also, you 're assuming that small shareholders
| exercise power via their voting rights - nope, most small
| shareholders don't vote, not surprisingly since small voting
| blocs would rarely change outcomes.
| typicalset wrote:
| > If the story is "all companies must be fully employee-owned
| workers' cooperatives", then first, note that you are calling
| for a restriction on workers' rights: they have to be given
| part of their pay as stocks, and they can't sell them freely.
|
| This is simply not true. Many workers' coops issue one share
| per worker (there may not even be stock), which affords them
| one vote in company matters. In such a scenario the share may
| not be bought or sold, as it is a case of one share if and only
| if a member. It is not correct to represent proportional
| democratic control of a workplace as somehow a restriction on
| workers rights.
| zby wrote:
| If you cannot choose to work for an organization that is
| governed in a different way - then this is a restriction on
| your rights.
| typicalset wrote:
| The employees can democratically decide how they want to
| run things. They can choose to issue stock, they can choose
| other people to make decisions about the business e.g.
| appoint a manager to make decisions for them. They cannot
| do these things in a general employment situation.
|
| At the most bloody-minded level a food-service worker must
| wash their hands after going to the toilet and this is a
| restriction on their rights, but at the same time this
| infringes upon the rights of customers to not get sick
| eating food. Denying employees democratic control of their
| workplaces is a much greater restriction of their rights.
| And as a matter of practice, employees get the short end of
| the stick when they have a boss.
| zby wrote:
| Well if you don't allow the traditional company
| governance and everything must be a cooperative - then
| these employees cannot choose a traditional company
| governance.
|
| But my comment really was about restricting the choice of
| a potential employee - someone who has not yet decided
| what company to join.
| typicalset wrote:
| This is similar to arguing in favour of the existence of
| dictatorships, as not having them restricts the choices
| of what kind of society people can choose to move to. The
| point is that in a democracy, at least in principle,
| people can choose their "boss", and discarding this has
| bigger implications for everyday freedoms.
| zby wrote:
| The difference between a state and a company is that it
| is much more difficult to change the first.
| empath75 wrote:
| In any realistic scenario, those shares would quickly be
| diluted to nothing when the company needs to raise money from
| capital markets. Unions are in general a much better way to
| protect workers.
|
| The real power disparity between capital and labor is that
| capital is concentrated and labor is diffuse. Every worker
| negotiates with the corporation as an individual over
| compensation and worker rights. When you have a union
| negotiating the contract, then both labor and capital are
| concentrated and on a more equal footing, producing more
| equitable outcomes. Giving employees a tiny ownership stake
| doesn't really change the power disparity at all.
| ziggyzecat wrote:
| > it wouldn't affect incentives much.
|
| Speculation based on a shortage of info and, I assume
| (speculation), a feeling that at least some workers would
| rather do a different job, which would, from my POV
| (speculation) fit with
|
| > Your barista at Starbucks is not going to increase the stock
| price no matter how well he fills your order; at the same time,
| maybe he wants to know how much he takes home every day.
|
| Yes, your barista is increasing the stock price by doing his
| job well because customers will return for the enjoyable
| process and outcome. Given the positive feedback and proper
| operation procedures in quality assurance, workplace
| development and operations improvement your barista will also
| "design" & submit ideas to improve/change/expand certain things
| which can benefit process and outcome for the customers. Your
| barista is only one link in the supply chain to customer and
| daily income, which means that every decision will run through
| a feedback loop that creates the evolution of the company.
|
| But that's rarely the main driver of stock prices, which are
| currently mostly artificial constructs based on shareholder
| bullshit, networked manipulation and whale circle jerks. If a
| company "does bad", though, these main influences are dropped
| and increases are reversed until company behavior serves the
| kinks of the shareholders financial orgy again. "Imagine" a
| company creating free value that can not be monetized by whales
| but only by the rest of the world. "Free" energy, for example,
| a perfectly adaptable mix of energy sources maintained by
| sustainable procedures the negative side effects of which are
| compensated by gracefully handling resulting trash, upcycling
| or, out of imminent necessity, the creation of industries that
| R&D adequate solutions. All of this happens but always based on
| game theory methods, and that happens only, exclusively,
| because leadership falsely believes they are compensating their
| workers based on market evaluations of their work, which,
| entirely ignore that consumer prices are inflated by whale
| circle jerk behavior. It's pathetic and deserves nothing but
| disrespect. But people in circle jerks are manic and obsessed.
|
| Stocks, in their current form and with the current laws, are
| bullshit and serve a future world where AI will do most jobs
| and people in companies will only exist so that people higher
| up in the chain will feel pseudo-dominant, which is already the
| case, but too many journalists and politicians are part of the
| circle jerks and thus manic and obsessed as well.
|
| > (a) they find it hard to raise capital
|
| Because circle jerks. There's not even a game theoretical
| argument to justify this behavior as the giving those companies
| capital will either increase market and profits directly or by
| ways of added value as in "learning lessons" and "process of
| elimination". The reason it's done anyway because the circle
| jerks base their decision on fear of the evolution of the game
| so they'd rather keep the game as it is, balancing their
| decisions which requires totalitarianism, dictatorship.
|
| > (b) they tend to make decisions that maximize worker welfare
| rather than profit, e.g. they won't sack underperforming
| divisions or expand in ways that dilute existing workers'
| stake.
|
| Speculation/misinterpretation. They would sack underperforming
| divisions if they had to, but there rarely are cases where such
| divisions can't be improved and made more useful or cases where
| underperformance has exclusively negative outcomes. Again, the
| problem is whale circle jerk thinking. Underperformance is a
| matter of the right metrics, which do not serve the
| shareholders but company and consumer (the _correct_ metrics,
| that is). Now, when it comes to expanding while diluting the
| workers stake, you have the same problem, because the base
| income won't change. Only the stock increase will, which comes
| on top of the base revenue and makes everybody rich. But even
| in the rare cases where everybody does make less money, it's
| always temporary and sometimes necessary. This is not closed
| system after all.
| charlieyu1 wrote:
| I'm pretty sure the stock options of the corner shop near my
| house won't be very attractive to employees.
| kerkeslager wrote:
| > If the story is "all companies must be fully employee-owned
| workers' cooperatives", then first, note that you are calling
| for a restriction on workers' rights:
|
| This is completely dishonest. You're not arguing against this
| because you're concerned for workers.
|
| > they have to be given part of their pay as stocks,
|
| This is nonsense: the stock given to workers would normally be
| distributed to other places, so when it's given to workers
| instead, it's generally _in addition_ to what they would
| normally be paid.
|
| > and they can't sell them freely.
|
| Also nonsense: this is a rule at some companies, but doesn't
| have to be.
|
| > Second, that will probably make markets work worse. There's a
| large economics literature on this: worker-owned cooperatives
| have not taken over the market, although they are an available
| institutional form, because (a) they find it hard to raise
| capital (b) they tend to make decisions that maximize worker
| welfare rather than profit, e.g. they won't sack
| underperforming divisions or expand in ways that dilute
| existing workers' stake.
|
| Ah, the real reason you care about this issue: "it will
| probably make markets worse". Screw workers, can't make markets
| worse!
|
| As a society, is it our goal to have companies that "take over
| the market"? Or is our goal to have an economy that meets the
| needs of our people?
| maxerickson wrote:
| There are coffee shops that are owner operated, which is
| probably closer to what you'd get than Starbucks.
|
| Not sure it'd be a bad thing to have more of the one and less
| of the other.
| agentultra wrote:
| This is different from options and RSUs. It sounds like they're
| getting paid directly in stock. They're not being given the
| option to buy stock at a later date (with lower preference than
| the executives and early employees). Those kinds of
| arrangements still benefit the capital holders the most.
|
| Whether it's a bad thing to improve employee welfare over
| profits... I don't think it's that bad. It's perhaps more
| efficient than hoping that the state will. And it's probably
| temporary and tactical: profits still matter when you own
| stock.
| mdorazio wrote:
| Fun fact: Starbucks baristas _do_ get RSUs [1]. It was a core
| principle of the company under Howard Schultz and one of the
| big things he credits for Starbucks 's success specifically
| because owning even a small part of the company increases
| employee sense of responsibility and pride. I highly recommend
| the recent in-depth interview that Acquired did with him [2].
|
| Herb Kelleher famously setup Southwest Airlines with very
| similar principles and stock options for everyone, with pretty
| amazing results for decades.
|
| [1] https://www.starbucksbenefits.com/en-us/home/stock-
| savings/b...
|
| [2] https://www.youtube.com/watch?v=A0fvX-wV70Y
| habosa wrote:
| > Your barista at Starbucks is not going to increase the stock
| price
|
| Not sure I agree. If all the baristas did a better job then I
| think that would positively affect company value.
| charles_f wrote:
| And they would probably do a better job being happier and
| less stressed about money related issues
| BigParm wrote:
| Something that is naturally selected is not necessarily good.
| Most of nature is horrible in fact. And everything we do is a
| fight against nature to make it better.
| 01HNNWZ0MV43FF wrote:
| But instead of things like mandatory co-ops, rent caps,
| minimum wages, etc., could we get the same benefits from UBI
| instead? It's a much simpler welfare system.
|
| It would be cool if I could live partially off of welfare and
| have my job be an unprofitable charity making free software,
| where even if I had stock it would be worthless. Such a
| public good cannot exist under capitalism alone, not even
| for-the-workers-colored capitalism.
| JohnFen wrote:
| If the stock an employee gets doesn't give voting rights, then
| it's not really even a sliver of ownership, it's just a form of
| profit-sharing. That's not at all bad, but a different thing.
|
| Personally, I consider stock options to be a bit like lottery
| tickets. All things being equal, it doesn't hurt to have them,
| but I'm not going to count them as compensation and that I have
| them isn't going to make me work any differently.
|
| All that said, as a customer, I tend to prefer to patronize
| businesses that are "employee-owned" to a significant degree.
| Aeolun wrote:
| I'm not sure what you are saying the argument against them is?
| It kinda reads like the answer is "people with capital don't
| like them because it doesn't increase their capital fast
| enough".
| vegetablepotpie wrote:
| The story I read are that ESOPs are an alternative to
| unionization, it allows founders to cash out, it aligns
| incentives towards long term growth of a company and this has
| shown better performance in tough economic times. The barriers
| are that knowledge of them is low and there isn't institutional
| support in government for organizing companies in this way.
|
| Getting stock or pay are not an either/or. Employee actual
| wages have been effectively flat for the last 30 years, whereas
| corporate profits have continued to increase. Companies can do
| both. The money is there. Most of us are not getting it.
| Corporate organizing hasn't worked for everyone over the last
| 40 years. The mantra that corporations should only deliver
| value to shareholders has lead to laser sharp focus on
| quarterly profits in exclusion to everything else. Financial
| engineering like stock buybacks and leveraged buy-outs only
| concentrate wealth and destroy value. While declaring the end
| of neoliberalism and ESG have been attempts at turning that
| around, they have not been effective at influencing change.
| Being smart about how to align incentives is what is going to
| lead to more value in our economy and lead to more equitable
| outcomes for all.
| sqeaky wrote:
| This sounds like someone saying that banning children from
| mines is a restrictions on the child's right to mine coal.
|
| If society would be a better place than short term growth be
| damned.
| charles_f wrote:
| I'm not sure why so many people want to find issues with
| giving more to employees.
| sqeaky wrote:
| To be maximally charitable, some people don't want to trade
| one freedom for another (lots of people are just assholes,
| but let's ignore them for a moment).
|
| There are some fundamental compromises in freedom. If I
| have a right not to be stabbed you have a lost a right to
| stab me. Clearly, there are some things where this is an
| obviously good trade, like in not being stabbed.
|
| I suspect this person fears they will lose some freedoms if
| they choose to run a company or have their options reduced
| in the job market if companies are regulated to be less
| shitty. There may be some of that, but I suspect we can
| take the worst offences off the table and make the market
| more robust creating a total increase in freedom and
| options for everyone.
|
| This is why I went with a child in the mines example.
| Getting kids out of the mines and into schools was a
| complete gain for everyone beneficial to society. Employers
| got more educated employees. Kid got out of the mines. Coal
| production went up.
| dalmo3 wrote:
| > To be maximally charitable
|
| Yet you proceed to build a strawman.
|
| I want the freedom to exchange my services for money
| without having to care about all the bullshit ownership
| ensues.
|
| It takes a sociopath to conclude that idea is somehow
| equivalent to being stabbed or sending children to mines.
| sqeaky wrote:
| > I want the freedom to exchange my services for money
| without having to care about all the bullshit ownership
| ensues.
|
| Then sell immediately, no one here is proposing forcing
| ownership onto employees. For nearly all Americans owning
| something significant that is likely to grow in value
| distinct from the output of their labor is an exceptional
| opportunity.
|
| Just like how when children were given the opportunity to
| leave the mines for good there wasn't a massive popular
| resurgence to make abusive child labor legal again. Most
| people wanted kids out of mines and into other
| opportunities.
|
| Most people want wealth. Most people want better
| opportunity than coal mines. If you want to sell your
| ownership you can. If you want to mine coal you can when
| you reach the age of majority.
|
| Rather than view de-facto employee ownership as a burden
| it is an opportunity to leave a metaphorical coal mine,
| if you want. You could choose either way if society made
| de-facto ownership for labor a thing. Right most of us
| don't have choice.
| calibas wrote:
| > (a) they find it hard to raise capital (b) they tend to make
| decisions that maximize worker welfare rather than profit, e.g.
| they won't sack underperforming divisions or expand in ways
| that dilute existing workers' stake.
|
| Maybe this is the good way of running a business, and the
| gigantic corporations who grow like cancer and try to control
| governments are a bad thing?
| darby_nine wrote:
| > Your barista at Starbucks is not going to increase the stock
| price no matter how well he fills your order; at the same time,
| maybe he wants to know how much he takes home every day.
|
| I imagine the goal would not be to get rich off of the work,
| just have a democratic say in how the work is done and what
| work is to be done.
| andrepd wrote:
| > worker-owned cooperatives have not taken over the market,
| although they are an available institutional form, because (a)
| they find it hard to raise capital
|
| Isn't this just a circular argument then? The economic system
| based on tradable joint-stock companies is not conducive to
| other forms of economic organisation. Huge surprise! :)
|
| Of course they can't raise money in an economic system where
| money creation is privatised, that's exactly the problem!
| BeFlatXIII wrote:
| Regarding point B, how often do they prioritize worker welfare
| to the point that they do the equivalent of cutting through the
| branch they sat on?
| panick21_ wrote:
| Having service workers that are invested in the company and
| provide great service is essential to any service buissness.
| Sure any individul isnt single handet gone make your stock go
| up, but collectivly they do. The same as most engineers.
| atmosx wrote:
| Reminds of Varoufakis proposal which is way more radical tl;dr:
|
| ------------
|
| To imagine what transcending capitalism might mean in practice
| requires rethinking the ownership of corporations.
|
| Imagine that shares resemble electoral votes, which can be
| neither bought nor sold. Like students who receive a library card
| upon registration, new staff receive a single share granting a
| single vote to be cast in all-shareholder ballots deciding every
| matter of the corporation -- from management and planning issues
| to the distribution of net revenues and bonuses.
|
| Suddenly, the profit-wage distinction makes no sense and
| corporations are cut down to size, so boosting market
| competition. When a baby is born, the central bank automatically
| grants them a trust fund (or personal capital account) that is
| periodically topped up with a universal basic dividend. When the
| child becomes a teenager, the central bank throws in a free
| checking account.
|
| Workers move freely from company to company, carrying with them
| their trust-fund capital, which they may lend to the company they
| work in or to others.
|
| Because there are no equities to turbocharge with massive
| fictitious capital, finance becomes delightfully boring -- and
| stable. States drop all personal and sales taxes, instead taxing
| only corporate revenues, land, and activities detrimental to the
| commons.
|
| ----------
|
| Excerpt from
| https://www.irishexaminer.com/opinion/commentanalysis/arid-3...
| eru wrote:
| > To imagine what transcending capitalism might mean in
| practice requires rethinking the ownership of corporations.
|
| > Imagine that shares resemble electoral votes, which can be
| neither bought nor sold.
|
| Interesting idea. Perhaps the take-away is that we should allow
| trading in electoral votes.
| Nasrudith wrote:
| I thought the main reason we didn't allow for vote buying
| directly (advertising is doing the same thing but less
| reloably) was because it encouraged "corporate raiders" too
| much, one for whom a sufficient amount of capital would be
| encouraged to leave a mess by stripping out the copper wiring
| and selling it for a profit. Combined with the other issues
| of non-secret ballots like (political) bosses extorting
| votes.
| eru wrote:
| Huh, I don't understand the reference to copper wiring?
| lynx23 wrote:
| Just pay a decent salary, and the rest is moot. I dont really
| want stock from the company I wor for. Because if it is doing
| well... Yes, but that pendulum can also swing in the other
| direction, and experience has it that just because my company is
| doing badly, it mustn't be my fault. Everything between bad luck
| and co-workers slacking off for some reason can define my
| outcome. Thats pretty communist in my book. But well. Anyway,
| stock is a risk-taking behaviour, now force onto you because
| you're trying to fix your bad salary. Nope, thanks. Also, this
| smells of "we are a family" because "if the company is well,
| everyone is well". No, thanks.
| djokkataja wrote:
| Are there any companies that are hybrids of this, where they have
| some fixed structure in terms of voting power that's, say, 60%
| employee-owned, and 40% which is publicly traded and has a board?
| So the employee-owned side of things maintains the primacy of
| their skin in the game because the 60% control that they have is
| not something which can be amended, but they can also receive
| outside investment to some degree? As someone who's definitely
| not an expert on these things, the idea seems intriguing to me,
| but I have no idea if there are some reasons why this obviously
| cannot logically or practically work (as opposed to simply being
| something which people don't presently do--or something which I
| just haven't heard of people doing).
| raybb wrote:
| I'd guess Wawa or Publix might be. They're both ESOP but from
| the people I know who work there it doesn't end up being much
| cash difference.
|
| There is a whole book about Wawa that talks about the ESOP
| decision and such. It's called the Wawa Way.
| https://openlibrary.org/works/OL19986572W/The_Wawa_way?editi...
| eru wrote:
| German companies come pretty close. See
| https://en.wikipedia.org/wiki/Codetermination_in_Germany
|
| Also see how many cooperatives are run.
|
| You can definitely make these kinds of things work and eg
| worker cooperatives are generally legal to set up around the
| world, but they don't necessarily work any better than vanilla
| companies (and that includes not necessarily being better for
| the employees).
| nutrie wrote:
| > German companies come pretty close.
|
| Worked for one with this setup. It was all great until the
| stock price fell to ~20 % of its original value and has
| stayed that way since. Employees didn't like it, which was
| kinda funny (it's a risk they signed up for).
| throwaway2037 wrote:
| Jeez, that must have been some giant scandal to lose 80% of
| market cap. What is accounting fraud?
| eru wrote:
| Lots of leverage can do that, too.
| flanked-evergl wrote:
| The only cooperative I ever worked for was also the most
| corporate and toxic company I have ever worked for, and the
| company was run so poorly that they would not be able to pay
| someone to take their shares if they were publicly traded.
| irusensei wrote:
| If I lived in the authors socialist lalaland and had a good
| marketable idea the first thing I would do is to and start my
| company in another country.
|
| Maybe that's why they've build a wall to keep people in.
| jblezo wrote:
| Moving to another country is a good idea as an individual.
| However, for a nation as a whole, nothing is easier but
| building rich people: Leave, and somebody else will take your
| place.
| nnbvvklduwiw282 wrote:
| whaat, is this anarcho-syndicalism?
| aloisdg wrote:
| It should be.
| nutrie wrote:
| This is a rabbit hole miles deep, and don't get me wrong, I sort
| of support the idea, but:
|
| > Just like Jeff Bezos can sell a portion of his Amazon stock to
| buy a new house, employees at ESOPs can pull money out of their
| stock accounts to pay for tuition, medical bills, or as a
| downpayment on a primary residence.
|
| Maybe I'm missing sth, but, erm... what happens with the stock
| after? Because that portion of the company is no longer in the
| hands of its employees, and it's unlikely that it's a closed
| circuit.
|
| I get that your stock need not be publicly traded. But that
| brings a variety of other issues to the table.
| openrisk wrote:
| Ownership is such an empowering concept it is a bit of puzzle why
| there aren't larger numbers of employeed-owned companies. There
| is definitely a historical / cultural aspect to this:
|
| Exhibit 1: In agricultural societies land ownership was highly
| concentrated for the longest time (feudal society) before there
| were land reform movements [1].
|
| Exhibit 2: Owner-occupancy is celebrated in many cultures but
| less so in others. E.g., it ranges from 10% to near 100%. [2]
|
| Given that modern corporate organization and culture is typically
| _endured_ (pays the bills) rather than loved and given that legal
| frameworks to establish alternatives do exist, there must be
| various fundamental reasons for the ESOP paucity (beyond the
| obvious resistance of vested interests).
|
| One explanation might be that if judged purely on financial
| returns (i.e., ignoring the externalities of bullshit jobs,
| burned-out, disillusioned employees etc.) - the advantage of
| employee ownership in securing financial returns (especially
| short term) is not dramatically higher than a conventional
| external shareholder entity.
|
| [1] https://en.wikipedia.org/wiki/Land_reform
|
| [2] https://en.wikipedia.org/wiki/Owner-occupancy
| itake wrote:
| The problem with employee wholely owned organizations is the
| employees at the primary location aren't typically incentived
| to grow the business beyond their area.
|
| The primary location would need to set aside profits to fund
| new locations and their money would go towards new employees.
|
| Most employees, especially ones living pay check to pay check
| would much rather take the check than use that money to pay
| someone else.
| foreigner wrote:
| Does nobody remember Enron? They encouraged their employees to
| invest in company stock, and when the company collapsed those
| employees were doubly screwed: no more job and no more savings.
| Too many eggs in one basket IMO. Investing in your own company is
| only for people who can tolerate very high risk.
| varispeed wrote:
| Funny that in the UK, small business owned by employees is
| typically associated with tax dodging (basically there is strong
| anti small business agenda in the government). So we have this
| legislation called IR35 that very much stops employee owned
| company from generating profit. This applies to b2b only, but I
| wouldn't be surprised if strong lobbying from big corporations
| will get its scope expanded. After all why someone should run
| their own shop if they could work at a supermarket? Big
| corporations are worried that the most skilled people engage in
| running their own business rather than being available in the
| employee market, so there is strong push to stop it.
| t-writescode wrote:
| I was speaking to an employment lawyer about how to structure the
| business I'm trying to start. I wanted partial ownership from all
| employees and, more importantly, aggressive profit sharing.
|
| The particular models that I wanted to look at - the partial
| ownership - turns out to be incredibly expensive when hiring on
| new employees - from what I've understood - and so I'm leaning in
| to the profit sharing model, hard, and perhaps the company design
| will be one that enforces that aggressively. I didn't understand
| everything the employment lawyer was discussing and it was just a
| preliminary discussion. I think it's worth it for every person
| interested in starting a business to work with and speak with a
| lawyer.
|
| I'm not really much of a fan of everyone owning stock, though,
| myself - especially everyone gaining stock over time. There's a
| million ways to build a company, of course. Giving employees
| stock over time seems like it could be a good plan if there is
| real intent to become publicly traded at some point. I personally
| wouldn't want the profit sharing to be tied to a stock amount. It
| would reward seniority or tenure a bit too much (in my opinion).
|
| A system I would prefer would be one where: * all
| employees regular salaries and all business costs are paid
| * a reserve 'warchest' is kept or grown where the goal 'size'
| of the 'warchest' is relative size to keep the company afloat for
| x years of low or zero income (to survive bad years). *
| profit share "the rest" (or most of the rest).
|
| Exact specifics of the profit-sharing could be unclear. Could be:
| * a flat "every employee gets 1/(# employees) the rest". *
| each division gets a percentage and then each employee in that
| division gets 1/(# employees in division) * a point system
| where tenure gives you more points and you get Xi/(sum X)
| portion.
|
| Lots of options.
|
| I prefer profit-sharing myself because it doesn't lean in the
| direction of becoming public and everyone experiences the fruit
| of their and their coworkers' labors.
|
| I've been warned a bit against partial ownership because "what if
| the existing employees don't want to be profit sharing anymore",
| etc? I dunno. Lots of thoughts.
| etothepii wrote:
| I'm interested in why you want to do this? What is the goal you
| are trying to achieve? Why would you not do this with salaries?
| Will there be some people paid more than others that do
| different roles? If so, why would their profit shares be the
| same? Who decides on war chest size? Ownership is an
| interesting word, because as you say if it was ownership then
| when an employee leaves they still get a share of profits and
| surely they could sell (otherwise it's not ownership). I've
| wondered myself about whether I should have some sort of union
| but what I really mean is an alternate reporting line to hear
| about problems. My suspicion is that there's a lot of what
| founders think of as profit that isn't really profit. My
| founder salary is probably around 25% of what I'd need to be
| willing a job. I'd everyone at the company did this we'd have a
| lot of extra "profit" to share out but it isn't real profit.
| t-writescode wrote:
| These are some great questions! I'll work through them one-
| by-one.
|
| > (edit: sorry, I missed this one!) why you want to do this?
|
| I believe in pay transparency and paying people for the value
| they bring to a company. I don't like it when there's a call
| center with everyone making a dollar above minimum wage, when
| they take the pain of all the poor decisions people who make
| 5-10x what they do made.
|
| > What is the goal you are trying to achieve?
|
| A greater alignment to the earnings someone makes for the
| company and their earnings out of the company.
|
| > Why would you not do this with salaries?
|
| I believe a salary is a promise, something that can be
| consistently relied upon. Profit sharing is above and beyond
| that.
|
| > Will there be some people paid more than others that do
| different roles?
|
| Since a salary is a promise, yes. It also allows for more
| tenured and skilled employees to "grow" in the company.
| Generally a more senior person has more responsibilities and
| my promise to them should correlate well with that.
|
| > If so, why would their profit shares be the same?
|
| Undecided
|
| > Who decides on war chest size?
|
| Probably a collection of employees, including the CEO, and it
| would be the sum of company expenses for a certain number of
| years, including cost of living adjustments.
|
| > but what I really mean is an alternate reporting line to
| hear about problems
|
| I hadn't considered that as a use of a union and I think I
| like it. I should think on this more.
|
| > My suspicion is that there's a lot of what founders think
| of as profit that isn't really profit. (and the added part
| about you underpaying yourself)
|
| Probably! In my context regarding profit sharing, I am
| thinking that everyone is making an appropriate salary
| already - before that, it's not really profit. Admittedly,
| given the structure, the official salary would probably be a
| little below market rate; but again, that's just the promise
| of minimum payment and when profit sharing went into full
| swing, I would like to think it would increase those numbers.
| fairdistribute wrote:
| Ok then we get rid of employees
|
| It's surprising how unnecessary they are.
| kryptiskt wrote:
| So you make all the employees equal partners, what will happen?
| If the company is a money-making machine like Google, the
| employees will not be sad if the employee base is kept small and
| most stuff is outsourced to other (likewise worker-owned)
| companies that gets a slim margin above their cost.
|
| So I predict that this world will have very small, very
| profitable companies which have some secret sauce but hands off
| most of the work to big companies making much less money.
| vineyardmike wrote:
| > If the company is a money-making machine like Google, the
| employees will not be sad if the employee base is kept small
| and most stuff is outsourced to other (likewise worker-owned)
| companies that gets a slim margin above their cost.
|
| Google does this already, even not being a co-op. They have a
| huge contractor army, and their core employees are handsomely
| rewarded with massive salaries.
|
| > So I predict that this world will have a have very small,
| very profitable companies which have some secret sauce but
| hands off most of the work to big companies making much less
| money.
|
| This is kinda what we see already, except everyone want to grow
| their kingdom, (and hire their friends and family) so it seems
| inevitable that the "Small profitable secret sauces" will still
| get diluted without strong control
| throwaway2037 wrote:
| Microsoft was pretty famous for this in the 90s and 00s. Huge
| amounts of work was done by contractors, who were treated
| like second class citizens. There was even a big lawsuit
| about it, that changed how Microsoft uses contractors.
| rich_sasha wrote:
| I was wondering about a similar, but different mechanism. There's
| a pool of shares that are effectively rented for free to
| employees, and part of their pay is the dividend they get. When
| you join, you get them for free (maybe there's some vesting
| schedule), when you leave they go away, not as a sale but just
| for free again.
|
| Soo... It's not like you're always inflating your share base with
| options. Just part of what people are paid is basically same as
| shareholders.
|
| This isn't some "align with shareholders" bullshit, rather I
| wonder if it somewhat decreased the myopic perspective of an
| employee. They get paid off of the success of the whole company,
| they have an interest in prudent cost management, and so on. They
| get to vote on issues affecting the whole firm, too -
| collectively maybe they are 5-10% or whatnot, not lots but enough
| that they have a voice.
|
| Otherwise, there is a prevalent, and sadly reasonable perspective
| of extreme cynicism towards an employer. The employer always says
| how we're all in it together, teamwork etc. but really, every
| employee is best served by entirely optimizing only their own
| utility. But surely this can't be optimal at the society level.
| chii wrote:
| > every employee is best served by entirely optimizing only
| their own utility.
|
| but this would still remain the case in the scheme proposed.
|
| Even suppose those employee-class shares get a voting right,
| they would want to maximize their own benefits: such as higher
| dividend payout. As for why - imagine if there's a decision
| between long term investment in plant & equipment, vs paying
| out dividend today. An employee who might not wish to stay will
| vote to get the dividend, as their "share" is going to be gone
| by the time the long term investment pays off.
|
| So the only way to align employee and owners, is to have
| employees own regular shares.
| TrueSlacker0 wrote:
| That's a profit share plan. Something implemented like as xx%
| (usually 20%) of net profit is dispersed to staff each quarter.
| You don't buy into shares or anything. You don't get them when
| you leave.
| divan wrote:
| Freakonomics Radio podcast recently featured a good episode on
| the subject:
|
| https://freakonomics.com/podcast/should-companies-be-owned-b...
| zokier wrote:
| The article seems to imply that the company would need to hold
| cash enough to buy back all outstanding shares, which sounds
| absolutely bonkers to me?
|
| Are the shares getting constantly diluted, how is that handled?
| How is valuation of shares done here? I can't really see this
| scheme working for public companies
| sarkron wrote:
| I am seeing a lot of debate here about what Socialism is or is
| not. Lots of interesting points but none of them come close to
| this article by the Leszek Kolakowski (Polish Philosopher and
| author of Main Currents of Marxism)
|
| It was written in 1956 but was seized by the censor and the
| student journal for which it had been written was closed down.
| The essay was then pinned up on a bulletin board at Warsaw
| University until - very shortly afterwards - the authorities took
| it down. From then on underground copies of it were circulated.
| It remained unpublished in Poland until after the fall of
| communism.
|
| We intend to tell you what socialism is. But first we must tell
| you what it is not - and our views on this matter were once very
| different from what they are at present.
|
| Here, then, is what socialism is not:
|
| - a society in which someone who has committed no crime sits at
| home waiting for the police;
|
| - a society in which it is a crime to be the brother, sister,
| son, or wife of a criminal;
|
| - a society in which some people are unhappy because they say
| what they think and others are unhappy because they do not;
|
| - a society in which some people are better off because they do
| not think at all;
|
| - a society in which some people are unhappy because they are
| Jews and others are happier because they are not;
|
| - a state whose soldiers are the first to set foot in the
| territory of another country;
|
| - a state where people are better off because they praise their
| leaders;
|
| - a state where one can be condemned without trial;
|
| - a society whose leaders appoint themselves;
|
| - a society in which ten people live in one room;
|
| - a society that has illiterates and plague epidemics;
|
| - a state that does not permit travel abroad;
|
| - a state that has more spies than nurses and more room in
| prisons than in hospitals;
|
| - a state where the number of bureaucrats increases more quickly
| than that of workers;
|
| - a state where people are compelled to lie;
|
| - a state where people are compelled to steal;
|
| - a state where people are compelled to commit crimes;
|
| - a state that possesses colonies;
|
| - a state whose neighbours curse geography;
|
| - a state where cowards are better off than the courageous;
|
| - a state where defence lawyers are usually in agreement with the
| prosecution;
|
| - a tyranny, an oligarchy, a bureaucracy;
|
| - a society where vast numbers of people turn to God to comfort
| them in their misery;
|
| - a state that gives literary prizes to talentless hacks and
| knows better than painters what kind of painting is the best;
|
| - a nation that oppresses other nations;
|
| - a nation that is oppressed by another nation;
|
| - a state that wants all its citizens to have the same views on
| philosophy, foreign policy, the economy, literature, and
| morality;
|
| - a state whose government determines the rights of its citizens
| but whose citizens do not determine the rights of their
| government;
|
| - a state in which one is responsible for one's ancestors;
|
| - a state in which some people earn forty times as much as
| others;
|
| - a system of government that is opposed by the majority of the
| governed; - one isolated country;
|
| - a group of underdeveloped countries;
|
| - a state that employs nationalist slogans;
|
| - a state whose government believes that nothing matters more
| than its being in power;
|
| - a state that makes pacts with criminals and adapts its
| worldview to these pacts;
|
| - a state that wants its foreign ministry to shape the worldview
| of all mankind at any given moment;
|
| - a state that is not very good at distinguishing between slavery
| and liberation;
|
| - a state that gives free rein to proponents of racism;
|
| - a state that currently exists;
|
| - a state with private ownership of the means of production;
|
| - a state that considers itself socialist solely because it has
| abolished private ownership of the means of production;
|
| - a state that is not very good at distinguishing between social
| revolution and armed invasion;
|
| - a state that does not believe that people under socialism
| should be happier than people elsewhere;
|
| - a society that is very sad;
|
| - a caste system;
|
| - a state where people can be pushed around, humiliated, and ill-
| treated with impunity;
|
| - a state where a certain view of world history is obligatory;
|
| - a state whose philosophers and writers always say the same
| things as the generals and ministers, but always after the latter
| have said them;
|
| - a state where city maps are state secrets;
|
| - a state where the results of parliamentary elections can always
| be unerringly predicted;
|
| - a state where slave labour exists;
|
| - a state where feudal bonds exist;
|
| - a state that has a monopoly on telling its citizens all they
| need to know about the world;
|
| - a state that thinks freedom amounts to obedience to the state;
|
| - a state that sees no difference between what is true and what
| it is in its interest for people to believe;
|
| - a state where a nation can be transplanted in its entirety from
| one place to another, willy-nilly;
|
| - a state in which the workers have no influence on the
| government;
|
| - a state that believes it alone can save mankind;
|
| - a state that thinks it has always been right;
|
| - a state where history is in the service of politics;
|
| - a state whose citizens are not permitted to read the greatest
| works of contemporary literature, or to see the greatest
| contemporary works of art, or to hear the best contemporary
| music;
|
| - a state that is always exceedingly pleased with itself;
|
| - a state that claims the world is very complicated, but in fact
| believes that it is very simple;
|
| - a state where you have to go through an awful lot of suffering
| before you can see a doctor;
|
| - a state that has beggars;
|
| - a state that is convinced that no one could ever invent
| anything better;
|
| - a state that believes that everyone simply adores it, although
| the opposite is true;
|
| - a state that governs according to the principle oderint dum
| metuant; - a state that decides who may criticize it and how;
|
| - a state where one is required each day to say the opposite of
| what one said the day before and to believe that one is always
| saying the same thing;
|
| - a state that does not like it at all when its citizens read old
| newspapers;
|
| - a state where many ignorant people are considered scholars; the
| politics of its government will not allow you to discover this;
|
| - a state that does not like it at all when its regime is
| analysed by scholars, but is very happy when this is done by
| sycophants;
|
| - a state that always knows better than its citizens where the
| happiness of every one of its citizens lies;
|
| - a state that, while not sacrificing anything for any higher
| principles, nevertheless believes that it is the leading light of
| progress.
|
| That was the first part. And now, pay attention, because we are
| going to tell you what socialism is. Here is what socialism is:
|
| Socialism is a system that ... But what's the point of going into
| all these details? It's very simple: socialism is just a really
| wonderful thing
| choeger wrote:
| While this might sound great at first, it comes with a tangible
| risk: In a worker-owned enterprise, workers cannot freely sell
| their stock (or it would not be worker-owned for long). So their
| wealth is tied to the company and the value of every stock hinges
| on the company's long-term success. Imagine going into retirement
| with this six-year plan to learn that the company goes bankrupt
| one year later.
|
| Of course, there are probably ways to try to minimize the risk
| (e.g., saving the profits for the payout and keeping them
| separate from business cash) but it won't be very diverse. Or
| maybe several such companies could put their stocks in a basket
| and allow employees to diversify their portfolio.
|
| So I think it's a great idea as an add-on, but no one should bet
| their retirement on it.
| phoyd wrote:
| Giving employees stock options does not solve the "employes
| should own the company" problem, when there is a market to sell
| the stock. Shareholders and employees have different goals and
| interests regarding the company. For example, the employees they
| may have to decide on the elimination of their own jobs in order
| to secure the value of their stock holdings (which btw. would
| make the company not owned by their employees anymore)
|
| A more interesting approach would be a model where being a
| employee automatically gives you a vote on company wide decisions
| including. the distribution of profits, just how being a cititzen
| of a democratic country gives you a vote on the fate of your
| country (similar to the Mondragon Corporation in Spain)
| android521 wrote:
| so in the extreme case, the employees can decide to return 99%
| profits to themselves and return 1% to shareholders? It sounds
| cute but will be hard to make it work when incentives are not
| aligned well. Just like Communism sounds good in theory and
| everyone with a kind heart will like more equality but in
| practice, it destroys the entire cake.
| PaulRobinson wrote:
| Companies can be owned by employees (or customers!) without the
| messiness of stock options. It's called a co-operative.
|
| I know in the US that worker co-operative can be marred by
| accusations of "communism" and that trade unions will own the
| business, but it doesn't have to be that way.
|
| In the UK (hardly a hotbed of communism with now close to 50
| years of centrist governments), one of the best known and most
| aspirational brands is the John Lewis Partnership. The
| "Partnership" in the name refers to the fact it doesn't have
| "employees" - they're all partners in the business. People
| working at JLP, and its subsidiary supermarket Waitrose, receive
| a share of the profits in addition to their salary.
|
| The current CEO is dancing around trying to get private equity in
| to the business, but they are finding - like most businesses that
| seek capital investment - that investor interests in eternal
| rapid growth don't align well with employee interests.
|
| JLP isn't alone in being a partnership. The vast majority of UK
| professional firms (accountants, law firms, management
| consultancies and so on), are LLPs, meaning senior partners are
| the owners and distribute profits between themselves.
|
| Perhaps slightly more radical is the customer-owned co-operative.
| Started in Rochdale (possibly with the help of some of my
| ancestors who hail from there), in 1844, shoppers with the Co-Op,
| effectively get a return of profits based on how much they spend
| - the original loyalty program.
|
| Mutuals are also structured in this way like Nationwide are the
| largest mortgage brokers in the country, and if you have even PS1
| in a savings account or mortgage with them, you have voting
| rights at AGMs, and own part of the organisation. Credit unions
| are similar, but typically operate as non-profits.
|
| And this is all healthy. Look at the oldest businesses in the
| World[1], they're not driven by growth, they're not driven by
| next quarter's targets, they're about longevity and creating
| something that lasts. They're typically family owned or owned in
| a way that means the workers reap the benefits. Many of them
| change hands in private ownership, sure, but no hedge fund is
| going to be interested in extracting value from them - they're
| not intended to scale on purpose.
|
| I've come around in recent years to Cory Doctorow's ideas on
| capitalism (in the purest sense of that word, not "free markets",
| but investors making their living by demanding returns on
| capital), being misaligned with a healthy long-term business,
| particularly in the tech industry. "Building to scale" has become
| toxic. Unicorns are destroying our industry. I don't understand -
| and I know this will be controversial here on HN - why anyone
| would want to make some billionaire investment fund richer, just
| so they can have a yacht, making money off adtech.
|
| The next thing I do will likely be an LLP or a co-op (probably
| employee owned, but a tech firm that is customer-owned co-op
| would be interesting). The goal will be to build something that
| outlives me by a long, long time. I'd encourage others to look at
| alternatives too.
|
| [1] https://en.wikipedia.org/wiki/List_of_oldest_companies
| fx1994 wrote:
| We had companies owned by people/state in communism. It failed
| miserably and I would not suggest anyone to try it again. But to
| be paid with optional stocks or money after n years working for a
| company, hell yes. I would be the first to take that bonus of
| stocks and I would care much more for my company then. Now, I
| don't care whatever happens since no one would care if they throw
| me out.
| igleria wrote:
| I would prefer having my salary indexed by inflation. Yes, even
| if we get deflation, before some ceo-wannabe asks about that.
| wseqyrku wrote:
| People work for their paycheck and not their company, and they
| have the nerve to talk about "loyalty" and stuff like that when
| they won't do any of this.
|
| But I understand why companies prefer to pay you in full rather
| than stocks, (1) it's gonna be miniscule compared to their actual
| cash flow and (2) they would prefer to pay you whatever your
| contract says and keep whatever interest for themselves, even if
| that's not much.
|
| So they are optimizing for their own interest in both ways. I'm
| not knowledgeable in this area but as a normie that would be my
| guess.
| toldyouso2022 wrote:
| Uuuh no thanks, I want to be paid now whether things work out or
| not
| Narhem wrote:
| Let's take it a step further and say when a company screws the
| livelihood of others they should be holden to providing financial
| compensation for their failures.
|
| That being said working for a company who actively fights against
| me makes me just not want to work.
| infinitedata wrote:
| When I first saw this, more than money, I thought about voting
| rights. You shouldn't need a CEO, direction of the company would
| be all about shareholders voting and bringing ideas.
| android521 wrote:
| wow, have you seen any organization with more than 50+ people
| that can make it work this way? if everyone has equal voting
| rights, this company or organization would be destroyed in no
| time. In democracy, you vote a leader but then the leader(s) or
| the elite elected few would make decisions themselves. You can
| vote them out but you certainly don't get to vote on every
| decision or ideas.
| karol wrote:
| Ha ha ha.
|
| When I hear the average quality of employers ideas I thank for
| the leaders and the founders who can see through that gibberish.
|
| There is no large company in the world right now that is run this
| way and for a good reason.
| sunaookami wrote:
| Ah yes the competent founders, leaders and managers that always
| find new ways to exploit their workers and customers.
|
| >There is no large company in the world right now that is run
| this way
|
| Huawei
| GardenLetter27 wrote:
| A nice idea in theory, in practice it becomes a bureaucratic
| nightmare though - even just offering shares is extremely
| difficult between different countries, tax treaties, etc.
| derelicta wrote:
| Yes. It's like every now and then STEM-folks discover that
| workplace democracy is actually a good thing and maybe the
| goddamn soviets were unto something lmao.
| protocolture wrote:
| I think I read some compromise position years ago where the
| workers didnt just own the business, but the business would issue
| new bonds/shares every year based on effort put in.
|
| The problem with traditional worker owned businesses is that you
| assume that being a shareholder would incentivize work, but it
| turns often enough into a race for the least effort while still
| getting paid. A classic coop failure mode.
|
| If share of profit is proportional to effort every 12 months you
| eliminate that.
|
| That said, I cbf reading the article. Sorry but at least I am
| honest.
| nsajko wrote:
| Wikipedia page on worker's self-management:
|
| https://en.wikipedia.org/wiki/Workers%27_self-management
| lo_fye wrote:
| Or work for a company that's a registered B-Corp
| https://www.bcorporation.net/en-us/
| morning-coffee wrote:
| > Every company should be owned by its employees
|
| Today's latest example of someone, after observing the current
| state of some system governed by laws of economics, declaring a
| "solution" by merely stating how something "should" be. If only
| the world worked this way...
| paxys wrote:
| Something doesn't add up. The company claims to be 100% employee
| owned, and hands out new shares to employees every year as part
| of their salary. But the employees can also sell their shares to
| fund purchases. So...who do they sell to? And what happens when
| an employee with a bunch of shares quits or gets fired?
| itake wrote:
| The company might buy those shares back
| markus_zhang wrote:
| I think the idea is, every company should be managed and owned by
| its employees. Employees in total should own about 51% of the
| stocks, as a start. Nowadays you see so many examples of
| management and even the owning entities (VC and other funds)
| mismanage the companies, simply to benefit themselves, and leave
| employees in the wind.
| kkfx wrote:
| Companies needs money, money came from revenues but typically
| it's not sufficient and loan are not cheap. So companies try to
| get money from third parties, it's a bit cheaper but still not so
| cheap, stocks are cheaper, and if you have stocks while employees
| can buy them, have options and so on, they likely have not enough
| money so you can't keep the ownership "inside". Similarly you can
| "give ownership" to those who are new hired and get back
| ownership" from those who left for some reasons.
|
| To resolve current very unbalanced society we need another thing:
| public money. We need to ANNIHILATE central banks and the current
| banking system. Money must be created by the government with
| public investments, so the government propose a new road, the
| parliament accept the proposal, some will make the new road
| getting "new" money from the State. Doing so regulate enough to
| avoid hyper inflation but still tie money on a physical
| substrate, tied to the real world resources avoiding pure
| finance.
| sotix wrote:
| My grandfather founded a construction company by himself many
| decades ago. He built it up over many years to a behemoth in the
| region and created a culture where people worked there for life.
| When he retired, he sold the entire company to the employees with
| everyone getting a cut.
|
| His funeral was full of so many faces I had never seen before.
| Somebody pointed out to me that these were the dozens of people
| that he made millionaires by deliberately deciding to do right by
| the employees. It was really moving to talk with so many people
| who had reaped the benefits of their labor and were grateful for
| his decision.
|
| That to me is the model that I want to work for. Yes, people at
| the top made more than at the bottom. But they had been there for
| decades longer, and the gap was not as extreme at every other
| company I've worked for. Wealth was collectively shared.
|
| My family could have been a lot wealthier if he had kept a cut of
| the company. But he retired comfortably and didn't feel that he
| deserved any more money that others earned for him. I really
| admire that decision.
| astura wrote:
| >My family could have been a lot wealthier if he had kept a cut
| of the company.
|
| Unlikely... He probably made just as much or more with the ESOP
| than he would have selling in a private sale. When a business
| owner creates an ESOP for their business they sell their shares
| of to the company to the company itself TAX FREE for a fair
| independent valuation. It's just another way for a founder to
| cash out. It absolutely does benefit the employees, but it's
| not an act of charity, the owner still cashes out and realizes
| the full valuation of the company they built.
|
| https://www.forbes.com/sites/darrendahl/2016/07/07/if-you-di...
| sotix wrote:
| Well in this case, the company has more than quadrupled its
| profits since he sold the company. The new employee owners
| have done a phenomenal job running it.
| Luker88 wrote:
| This reminds me of that old funny viral video:
|
| "democracy is government... by the people...of the people...for
| the people... but the people are retar*d"
|
| Like everything, the best things probably require balance, and
| the devil is in the details. IMHO it has merit, but with caveats.
|
| I would not want to have the same shares as a normal worker if I
| have personal risks (like a work security responsible, or CEO).
| For better or worse, CEOs have experience in guiding companies,
| and almost no employees have that.
|
| OTOH even a small worker representation might do wonders,
| increase engagement, better law compliance and the like.
|
| the options are not just 0% and 100% to workers, there could be
| different requirements depending on the size of the company.
|
| Small companies could be required to have a bigger worker
| representation, because the impacts of the single worker is much
| higher.
|
| The weight of the workers' shares in money could be different
| than its weight in the decisions of the company, too.
|
| Maybe the workers just get a vote for X% on the board, regardless
| of actual shares.
| alfiedotwtf wrote:
| <door bursts open>
|
| Economics 101 has entered the chat
| karaterobot wrote:
| I've never worked for a company where I would have traded $1 of
| my salary for $2 in ownership. Most companies' stock isn't worth
| anything financially, and I don't give half a shit about a sense
| of ownership. Just pay me money in exchange for work, and let me
| get back to living my life.
| philip1209 wrote:
| Countries work well as democracies, but businesses thrive as
| dictatorships.
| dennis_jeeves2 wrote:
| Excellent way to put it.
| ozim wrote:
| 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?
| panarky wrote:
| 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.
| SoftTalker wrote:
| This is a really bad idea for the average worker.
|
| "We've got a number of people that have been here 15, 20 years
| and they have $1 million plus balances"
|
| Sounds good but they are catastrophically undiversified. Nobody
| should have their entire nest egg in one stock. Yes they are
| motivated for the company to do well, but so many things play
| into a stock price that are out of any one person's control.
|
| Just giving them profit sharing that they can invest as they wish
| would have most of the same motiviations. Anyone making a decent
| wage and saving in a 401K should be able to save $1 million over
| the long term. And do it much more safely in a well-diversified
| portfolio.
| ragebol wrote:
| (These) shares yield dividends right, even if the stock price
| itself is low? Profit sharing doesn't give you any say in
| anything.
| asoneth wrote:
| Agreed that there are some downsides for employees.
|
| I worked at a company that incentivized owning the company's
| stock. The company was doing fine but it was still
| controversial among employees because of the risk of
| correlating your employment and investments -- if the company
| does poorly then you may lose your job and a large chunk of
| your investment at the exact same time.
|
| (In practice there also ended up being some jealousy as people
| who decided to play it safe missed out on some large gains.)
| francisofascii wrote:
| Isn't there some asset insurance vehicle to protect against a
| catastrophic loss?
| Mesopropithecus wrote:
| That's what options are for. But I find it more cost
| effective to just diversify my investments.
| charles_f wrote:
| This is so backwards!
|
| Workers are always at the mercy of shareholders (for whom
| apparently it's not bad to own a share?), and whom again and
| again will do a little layoff here and there because we need a
| percent or two more this quarter. Profit sharing will be the
| first thing to stop if results are temporarily worse. On the
| other hand, if the company is owned by its workers, nothing
| prevents them from redistributing all of the profits in
| dividends, aka, profit sharing.
| talkingtab wrote:
| Corporations pay employees and generate profits for owners. The
| third party is the customers. The first comment (currently) uses
| the word "profitable", in other words it asks what happens when a
| corporation is NOT profitable.
|
| We live in a time when profit is shrinking or drying up. So what
| happens? Corporations are controlled by owners, so they do two
| things: - they lower wages (inflation) - they raise prices
|
| This happens even when the owners have made stupid decisions.
| This happens even when the owners have committed criminal acts
| (Boeing, Sacklers, and many more). And the owners are also
| protected from legal consequences.
|
| The corporate model is obsolete. Simplistic answers like letting
| employees also be small owners will not fix this. We need a new
| model that provides the benefits of Corporations while ending the
| excesses, irresponsibility and criminality of owners.
|
| In the USA our constitution does not allow any action that denies
| equal protection under the law. Corporations have decide they
| enjoy the rights of citizens to buy elections. Owners, having
| made this decision may not enjoy any protection under the law
| that are not provided to ordinary citizens. No protection of
| their assets from bankruptcy and no protection from criminal
| prosecution. If you as an individual decide to sell OxyContin to
| any and everyone you would go to jail and you would be bankrupt.
| But not owners.
|
| [edit: typo "if owners ..." => "if you as individual ..."
| arminiusreturns wrote:
| I often hear people say "if corporations are people how do we
| execute them?"
|
| I remind them that this current insanity of profit at all costs
| has not always been the norm. Of course to a certain degree it
| has, but a long time ago, in America at least, corporations had
| to prove they were providing a public good or service, and if
| they were found to not be, their charter could be revoked! That
| right there is the death penalty for a corporation. While I'm
| sure it would have its own set of issues, I often dream about a
| world in which that becomes the norm instead of destroying the
| world so a multimillionare can get a few extra mil and the
| billionares get a few extra bil, while they oppress us and
| compromise our governments.
| vladms wrote:
| Some ideas were in fact already tried, but whomever does not
| history might suffer reliving it. For example check:
| https://www.familistere.com/uploads/media/5a9c4bd061fce/fami...
|
| To quote: "the association's economic and social model fell
| victim to its users and competitors. The hierarchy of association
| members, originally intended to reflect ability, led to
| opposition between Associates (whose status had finished by
| seeming hereditary) and other, less privileged active members.
| The spirit of the Familistere co-operative colony faded with each
| new generation."
|
| It is fascinating that these things were already tried more than
| 100 years ago. It is also interesting that they did not succeed
| for simple reasons (people trying to take advantage of other
| people). I think any proposed solution must be more structural -
| involve more than ownership but a set of values...
| hkt wrote:
| Some other examples:
|
| * Yugoslavian worker self management (arguably successful: the
| place had some other problems that hampered them, shall we say)
| * Mondragon (the world's largest worker cooperative) * John
| Lewis Partnership/Waitrose (an employee trust with some
| workplace democracy) * Rehn-Meidner model (which is more about
| mass ownership across the wider economy and was tried in Sweden
| if memory serves)
|
| There are a _lot_ of variations of this kind of thing and only
| some have been tried. Most haven't seen much action at all,
| just a few sui generis examples - most of the more specific
| examples above, really.
| s1artibartfast wrote:
| yeah, It is really fascinating to learn about the historic
| and academic study of these challenges.
|
| Most of them have been explored, mapped, and debated by
| economists in a very robust manner for 100+ years.
|
| One interesting perspective that I gained from a recent
| Econtalk podcast[1] is that neither profit driven
| corporations or democratically governed worker collaboratives
| are perfectly efficient. It is rather a question of when and
| how the two perform or fail in contrast. It is easy to build
| criticisms of each when comparing it to an idealized
| alternative, where all of the challenges have been hand waved
| away, but that is a meaningless comparison.
|
| https://www.econtalk.org/does-market-failure-justify-
| governm...
| ninetyninenine wrote:
| The tragedy of the commons applies here. Any time you have
| something that's commonly owned by many people (the more people,
| the more the tragedy applies) you have incentives that become
| misaligned.
| dennis_jeeves2 wrote:
| >The tragedy of the commons applies here.
|
| Agreed. More specifically it's a tragedy of commons of people
| who are of average iq + maturity.
|
| Overall cohesive group size is directly proportional to the iq
| + wisdom of participating individuals.
| ETH_start wrote:
| "Why are worker's cooperatives so rare? This is not a trivial
| question -- because they can pay "dividends" in the form of
| wages, they can entirely avoid corporate income tax. They must be
| so inefficient by nature of their structure to outweigh their
| advantages."
|
| https://x.com/captgouda24/status/1780345152885641350
| Nifty3929 wrote:
| 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 story picks up AFTER all that,
| when the business is already large and successful, and the owner
| just wants to retire.
|
| And what happens when the business struggles or fails later? In
| the case of Central States, the workers were asked to buy shares
| from the owner, probably using a portion of the salary they'd
| otherwise get. IOW, they're being underpaid relative to market,
| in exchange for ownership, expecting to get more later when they
| sell the shares. So far so good, but how does this look when the
| business has a rough patch, even one that's not their fault?
| layer8overhere wrote:
| This.
| hemantv wrote:
| 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
| sidmitra wrote:
| >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
| binxbolling wrote:
| Seems like it's deliberately using "committee" as a
| pejorative to make a political point. Flip it to "you'll
| find no statues of groups of people" and it's patently
| false.
| Apocryphon wrote:
| Seems like confirmation bias. We often than not like to
| lionize successful individuals, but plenty of visions are
| false or otherwise fail. On the other hand, we tend not to
| remember group efforts because it's harder to remember
| multiple individuals at a time. But surely they do exist. Was
| there a single visionary behind Bell Labs? Xerox PARC? The
| traitorous eight? The Apollo program? The Manhattan Project?
| nsonha wrote:
| Groups are slower and less consistent in decision making
| than individuals, simple as that.
| Apocryphon wrote:
| There are different types of group governance and almost
| all of them having an individual decision-maker at the
| front. Oppenheimer directed the Manhattan Project but he
| wasn't a "visionary individual," he had plenty of
| talented geniuses working under him.
| harhargange wrote:
| I believe there would be a single polymath who has skills
| in multiple fields, such as Oppenheimer who was great at
| science and administration who can lead a group for
| successful execution. For Apollo moon mission, it was the
| US president vision at the foremost. Even for TSMC and
| other companies such people exist. I don't want to say that
| entire credit goes to an individual but leaders with
| multiple skills are necessary.
| pineaux wrote:
| Nah, this is not true. This is just the narrative because
| someone want to get the honors or the stacks of cash.
| Apple wasn't created by Steve Jobs. Not even created by
| Steve Jobs and the Woz. They did start something that
| eventually became Apple. They had a lot of sway, but
| without all the other people that worked there and
| created all the important details it would have just been
| a pipe dream.
| torontopizza wrote:
| Of course, you are right.
|
| ----
|
| Edit, I was mistaken in my earlier post, so I will just leave
| this here as a correction
| https://en.m.wikipedia.org/wiki/The_Burghers_of_Calais
| Draiken wrote:
| 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 simplify big achievements as "this person
| was great". In reality though, it's a culmination of
| everything that came before that individual, the support
| around them, some of their decisions and much more.
|
| In other words: monuments are a bad argument to evaluate if
| something is good or not. Especially in today's
| individualistic society.
|
| It's a shallow Instagram motivational phrase.
| Alupis wrote:
| > 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.
| nostrademons wrote:
| The article is arguing for ESOPs, basically stock options for
| employees. The examples cited are actually quite tame by tech
| industry standards: "During Central States' worst year,
| employees earned the equivalent of 6 percent of their pay in
| stock, during their best they earned 26 percent." By contrast,
| FANG employees routinely make >50% of their compensation in
| stock, and it can be up to 80% in good years.
|
| As for how these get started, it's the same as any tech
| startup. The founding team owns the whole company at formation,
| and then they progressively give it away to increase the
| overall valuation of the company. You can do that through
| giving away stock in exchange for funding from a VC that you
| can use to pay employees, or you can give away stock directly
| in exchange for services rendered.
|
| And yes, this looks bad during a down year. Tech companies have
| this problem all the time - employees are demotivated when the
| stock price goes down, which can have further negative effects
| on the stock price.
| jasode wrote:
| _> As for how these get started, it's the same as any tech
| startup. [...] _
|
| To clarify, the gp was asking a rhetorical question that he
| already knew the answer to when he stated, _" How would a
| business [that already looks attractive for ESOP] like this
| get started? [... his recap similar to your recap ...]"_
|
| To put it differently, the scenario he's trying to explain is
| something like this given that ~9 out 10 businesses fail :
|
| - you can't look at just a single company's successful
| timeline to judge the ESOP for society; _you also have to
| consider all the failed companies and how ESOPs would play
| out in those timelines as well_. Since ~90% of businesses
| fail, you have to play out the financial dynamics of
| employees buying into ownership of all those failed
| companies. And in contradiction of employee-ownership, a lot
| of employees would prefer getting a bigger paycheck from a
| dying company rather than having money deducted to buy
| worthless equity shares.
|
| - e.g. of course employees would love to be significant
| workers-cooperative owners of Amazon Inc and Apple Inc. _But
| the analysis also must include employees owning worthless
| shares of Pets.com (bankrupt 2000 and shutdown) and Commodore
| Computer (bankrupt 1994)._ Some workers got employee-
| ownership shares of Commodore Inc instead of Apple Inc?!?
| Well, it sucks to be those workers.
| victorbjorklund wrote:
| Getting some of your salary in stock options isn't really an
| employee owned company. How many % of total Google shares are
| owned by employees (excluding the founding employees)?
| 0,0000000001%? At least 50% would be required for it to be
| viewed as an employee owned company.
| nostrademons wrote:
| I don't know about Google specifically, but I know that
| it's way more than 0.0000000001% because I personally have
| been paid more than 0.0001% of Google in stock
| compensation. A typical Series A startup reserves 20% of
| the company for the option pool, and then there are follow-
| on refresh grants.
|
| Note that if you run the math on the company in the
| article, they're considerably less generous than that. They
| say they have 1500 employees, $1B in revenue, and the
| average employee makes about 8-26% of their earnings.
| Figure that's maybe $20K/employee * 1500 employees = $30M
| in stock compensation on $1B in revenue, so they spend 3%
| of their revenue on stock compensation. If you figure the
| company is valued at $4B, they're giving away like 0.75% of
| the company per year, a bit less than Google and way less
| than a tech startup.
|
| This is probably a PR hit for Central States Manufacturing
| anyway, to help their recruitment efforts.
| stagger87 wrote:
| In an ESOP, employees typically own 100% of the stock.
| jonas21 wrote:
| 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/assets/52/88/5de1d06943cebc569ee3aa3a6d
| ed/go...
| YokoZar wrote:
| 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.
| Gormo wrote:
| 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.
| overrun11 wrote:
| There's no reason why this is beneficial. Money and stocks
| are fungible you can freely exchange one for the other as
| much as your heart desires. There's no difference between
| which one you receive.
| RhodesianHunter wrote:
| You seem to have missed an absolutely critical element of
| what drives human behavior. We call it "incentive".
| overrun11 wrote:
| Yes both the money and the stock are incentives and they
| are of equal value. You've still failed to explain why
| one is better than the other.
| nostrademons wrote:
| Money and stocks would be fungible _if all companies were
| public, all investors had perfect information, and no
| employee could make a difference in the stock price of
| their employer_. All three of those conditions are false.
| You may be working for a private company that you would not
| otherwise be able to buy the stock of; sometimes,
| employment is the only way to get ownership of it. You
| often have better information about how your own employer
| is doing than you do about random public companies. And for
| smaller companies, you can often make a difference in the
| company 's bottom line. This is why companies offer stock
| compensation in the first place, as an incentive for you to
| have a stake in the company's success.
|
| If your company is a shithole or fraud, then you absolutely
| do not want to be receiving company stock. But then, if
| that's the case you may want to re-evaluate working for it
| at all.
| bognition wrote:
| Let's ignore that most of the places people work are not
| publicly traded companies and pretend that any employee
| could buy stock in their employer.
|
| If that were the case and employees were compensated
| equally in stock vs cash, then yes there is no _rational_
| difference. However, most human are not rational.
|
| People like to take pride in their work and do a great job,
| this is amplified when they stand to directly benefit from
| their efforts. By enabling employees ownership in a company
| you're hoping to incentivize them to work harder and
| therefore amplify the return on their labor.
| bumby wrote:
| > _If that were the case and employees were compensated
| equally in stock vs cash, then yes there is no _rational_
| difference._
|
| Even if this assumes an equal net present value, wouldn't
| the volatility of stock vs. cash make a very rational
| difference in expected future value? For people who are
| risk adverse, the cash would probably be preferred; for
| those who are less risk adverse, the opposite is probably
| true.
| overrun11 wrote:
| The private company case is worse because now it's
| completely illiquid. This all strikes me as a rich
| person's idea of what poor people want. Someone making
| $15/hour wants the $15 not $10 + equity in a private
| company worth $5 which they cannot sell but gives them
| 1/1000 voting rights and maybe sometimes a 7 cent a
| quarter dividend subject to board approval and market
| whims.
|
| Most workers are not sophisticated investors and I'd
| rather they put excess savings into broadly diversified
| index funds instead of low quality equity in whatever
| small business they happen to be working at.
| parpfish wrote:
| how does equity in privately held companies work? I get
| that some share provide voting rights, but that's not
| generally what to employees.
|
| when the people in the article cash out their ESOP shares
| to buy a house... who's on the other end of that deal to
| buy those shares? is it some other employee? Wouldn't
| that mean that money is just switching hands between your
| employees rather than helping all your employees get
| rich?
|
| related: i exercised some options for a startup that i
| used to work at a few years ago. they're now >10 years
| old and financially healthy, but no IPO in sight. what's
| the point of those shares if there's never an exit?
| bognition wrote:
| The vast majority of small businesses have no "exit" in
| sight. Instead they want to rely on solid business
| fundamentals. Sell a product/service for a profit.
| Typically the owners of the business get access to the
| profits proportional to their ownership stake.
|
| By enabling employees to be owners you grant them access
| to those profits and to participate in discussions around
| how to spend/re-invest profits.
| parpfish wrote:
| In small businesses like that, how often do profits
| actually appear? It seems like big public companies often
| decide to increase spending to chase growth that would
| increase revenue and be profit-neutral. Do smaller
| companies think about it in the same way?
| stagger87 wrote:
| In an ESOP, stocks are not normally fungible and cannot be
| traded easily. Usually they are bought back post
| employment. In my case I was able to either get cash or
| have it put into a 401k.
| dls2016 wrote:
| > IOW, they're being underpaid relative to market, in exchange
| for ownership, expecting to get more later when they sell the
| shares. So far so good, but how does this look when the
| business has a rough patch, even one that's not their fault?
|
| Uhm, do you have a 401k?
| RandomCitizen12 wrote:
| > 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?
|
| In Canada, there are 'Labour Sponsored Venture Capital
| Corporations' with union overseers to do this and special tax
| deductions for investing money through these.
|
| They are, of course, a giant failure that neither provides
| easier access to capital for entrepreneurs nor generates any
| notable return for investors.
| harhargange wrote:
| Moreover, splitting the decision making is so conflict prone
| and unoptimised for competition. I had a look at some
| statistics that showed most successful startups take off when
| they have a single founder
| esarbe wrote:
| This is about ownership, not decision making. How you set
| up the decision making process is entirely up to the
| company.
|
| The same argument could be made for any other kind of
| shared ownership company.
| yibg wrote:
| 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.
| W3cUYxYwmXb5c wrote:
| 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.
| whoknowsidont wrote:
| >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 have
| universal (not attached to you employer) healthcare and a
| pretty robust (but minimal) retire fund for citizens.
|
| But we have the opposite of that with none of the upsides.
| missedthecue wrote:
| 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.
| Scarblac wrote:
| > 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.
| skizm wrote:
| This seems extremely good for late employees and extremely
| bad for early employees / founders? Late employees have no
| risk and the same reward.
| Scarblac wrote:
| 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.
| missedthecue wrote:
| 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.
| DaoVeles wrote:
| > IOW, they're being underpaid relative to market, in exchange
| for ownership, expecting to get more later when they sell the
| shares.
|
| Alas this would be a big issue. It is the deferred payment test
| writ large. Do you want $20 now or $30 next week.
|
| For a lot of humanity when times get difficult we will tend
| towards the immediate payoff rather than the long term. To eat
| the seed corn.
| Nifty3929 wrote:
| It's more like, do you want $20 now, or a chance at $30
| later, as long as you don't leave the company? That's a
| critical difference. If you pay me what I'm worth in cash,
| right now, I can do with that cash what I like - which
| includes investing it into the business. If you pay me with
| future promises that impose additional constraints, then my
| money is held hostage to those constraints.
| WalterBright wrote:
| Back in the 90s, the Seattle Times reported that there were
| 10,000 Microsoft millionaires in the Seattle area, not including
| home equity.
|
| Microsoft has made a heluva lot of people rich. So has Amazon.
|
| I also know employees who rejected getting part of their
| compensation as stock, wanting a higher salary instead, and then
| got mad when their coworkers made bank on the stock.
| fourseventy wrote:
| "But unlike Walmart, Amazon, and Apple, it's not just the
| executives getting paid out." ???? Employees at all three of
| those companies get options as part of their comp.
| marklubi wrote:
| I'm all for giving equity in a company to incentivize employees.
|
| The problem I have with this blanket statement, and the article
| itself, is that most of those employees didn't take on any of the
| risk. The risk/reward system is askew at that point.
|
| When you're ready to put everything on the line, let me know.
| Been there. Took three attempts where I went broke and had to
| find employment before finally getting one to stick.
| XajniN wrote:
| I will just leave this here...
|
| https://en.wikipedia.org/wiki/Workers%27_self-management
| elijahjohnston wrote:
| Our society isn't ready for this.
|
| Because of the godlessness of our society, the self has no
| grounds by which to engage with others, and by further
| incentivizing profit for more individuals, the further our
| society will tend to engage with itself as profit as its highest
| purpose -- even outside of the workplace -- consciously or
| unconsciously.
|
| I could see this being less dangerous if our society was deeply
| rooted in a religious reality, where an individual's engagement
| with the world is driven by a holistic good, as opposed
| exclusively to a financial good.
| bankcust08385 wrote:
| Apart from communism, worker- and customer-owned co-ops is the
| only escape hatch for workers from for-profit, extractive
| corporations subject to the demands of investors to commit
| arbitrary dismals, create unsafe working conditions, and all
| manner of other problems when the interests of owners and workers
| are out of alignment. Unions are a half measure that don't
| address the fundamental problem of an adversarial relationship
| between workers and managers/owners.
| kemiller wrote:
| Honestly the big tech tech companies are already captured by
| their employees. I used to think that would be a good thing but
| in reality it just means the economic opportunity is limited to a
| small set of people with highly elite and performative entry
| criteria. But a gradual path to employee ownership might make
| sense at smaller companies.
| fsckboy wrote:
| If you tie your income and your savings together, you're not
| saving for a rainy day. A rainy day will wipe you out.
|
| Ever heard the investment advice "diversify"? It's recommended
| because it's mathematically provable that you can achieve the
| same income with lower risk by diversifying away the co-variances
| between your different income streams.
|
| In the same way that it's nice to go to the market and buy the
| phone you prefer, the car you prefer, the milk you prefer, etc.
| you should make investments that are right for you too from among
| choices.
| ARandomerDude wrote:
| It's amazing how many people believe that every company is
| publicly traded. The vast majority of companies do not have stock
| and never will.
|
| If every company were owned by its employees, the net result
| would be higher unemployment, and many of those who found work
| would then do so as contractors. Hiring an employee is a major
| decision, especially for small- to mid-size companies. For a
| fledgling family business, giving an hourly employee an ownership
| stake in the company you and your wife started in your garage is
| a non-starter for most people regardless of their stated
| political ideology. For megacorps with deep pockets, mandatory
| ESOP would immediately accelerate the replacement of humans with
| machines.
|
| If you look at the incentives you can fairly quickly guess a
| person's (and a company's) future behavior.
| munificent wrote:
| _> "It 's hard to build true wealth for yourself if you don't
| have some type of ownership in something, and it's hard for most
| people to get ownership in something," Ruger says._
|
| I think this is a really good insight.
|
| But it also touches on something that many of the HN crowd,
| especially in the Bay Area find uncomfortable: home ownership.
|
| One of the ownership assets that is most attainable by many
| Americans is a little plot of real estate, so it's rational that
| it's a goal of many. But at the same time, once that piece of
| ownership has been attained it's also rational to want to
| preserve and maximize the value of that investment. But that can
| often (but not always) lead to the kind of selfish NIMBY behavior
| that is criticized everytime anything related to urban
| development comes up.
|
| Is there a middle ground balance where we respect that ownership
| of property is an important, attainable kind of wealth building
| for middle-class people while also accepting that a city must
| also develop in ways that benefit people that aren't homeowners,
| or aren't homeowners yet?
| indoordin0saur wrote:
| Land value tax.
| apwell23 wrote:
| > One of the ownership assets that is most attainable by many
| Americans is a little plot of real estate
|
| most attainable is buying stock through IRA account.
| officeplant wrote:
| As someone who had their first stock based savings account
| gutted by the 2008 economy we really shouldn't rely on
| stocks. I was in college and my college fund vanished very
| quickly. It was a fund set up for me as a kid, managed by my
| petrodollar worshipping uncle. We're all just a collapse away
| from nothing while being desperate for line goes up behavior
| to save us. But this is just my point of view from someone on
| the poorer side of things.
| tadfisher wrote:
| Your scenario is an example of mismanagement; you were
| already in college, so those funds should have been moved
| to less-risky investments (bonds, money-market, or even a
| savings account).
|
| For retirement, Fidelity and Vanguard offer "Target-date
| retirement" funds, which automatically rebalance to reduce
| risk as you age. This is a misnomer, though, as you could
| easily select one of those funds for college savings or
| whatnot.
| bobthepanda wrote:
| Part of the problem with upzoning is that for people who are
| not going to redevelop because they like their house or they do
| not have the financial means to do so, and are also unwilling
| to sell, they get no monetary benefit from the upzone.
|
| In some jurisdictions, this is alleviated by allowing the sale
| of excess zoning capacity to others, which now gives people in
| that situation a way to realize monetary gains.
| https://caldwellcommercial.com/understanding-commercial-real...
| standardUser wrote:
| > once that piece of ownership has been attained it's also
| rational to want to preserve and maximize the value of that
| investment
|
| By that logic, the idea of workers having part ownership of the
| companies they work for has a _lot_ of upside.
| skybrian wrote:
| It does, and Silicon Valley is built on that, but for
| startups it's more of a lottery ticket, and for a tech giant,
| what you do as a worker doesn't make much of a difference for
| financial results. And even in between, how the investment
| does is pretty risky and partly determined by unpredictable
| outside events, so you'll want to hedge.
|
| And then for _shared_ ownership, governance is often messy.
|
| Individual ownership of a stable asset that you can improve
| by making your own decisions (deciding what fixes to pay for,
| at least), is a different thing.
| WJW wrote:
| Focusing on the possible upsides tends to ignore the possible
| downsides. Worker ownership is only great when the company
| does well. If the company does not do well, the workers don't
| just lose their job but their nest egg at the same time.
| Let's not pretend that you can always influence whether your
| company will grow or not, sometimes you just work at
| Altavista and Google just launched.
|
| The average worker has enough of their income tied up into
| one employer already, they don't need to have even more
| economic concentration. It would perhaps be better if every
| company was owned by _everyone other than its employees_ ,
| with the employees of every company being forcibly made to
| invest in every other company. That way everybody gets to
| have an cushion if they ever lose their job or their company
| goes under. A bit like a DIY UBI if you will.
| xivzgrev wrote:
| Homes shouldn't be an investment. They've accidentally become
| that in the past few decades, and as a result, affordability is
| getting worse.
|
| The better it does as an investment class, the worse it will
| become. It's a self perpetuating spiral.
|
| I don't see the market solving this. I only see some regulation
| helping here - ie any tax filer can at most own 1 SFH (this
| includes married couples). So no second, third, tenth homes.
| Corporations and foreign entities also cannot own SFH - bye bye
| black rock & China.
|
| Obviously some edge cases don't work (ie people who want to put
| their home in a trust), but generally speaking, people should
| not be able to own homes as investments.
| janpieterz wrote:
| How do you suggest we handle the rental market?
| thereisnospork wrote:
| The drastic solution is you ban long term rentals - all
| 'rental agreements' must return shares in the underlying
| real estate and structure proportional to length of stay.
| The rent payments would be distributed pro rata to the
| existing share holders.
|
| Of course you could also allow people to build homes at
| market clearing prices, so investments would just be
| undercut.
| jquery_dev wrote:
| Being from UK: stop multi home ownership for private
| companies/persons. Move to majority council owned houses,
| which then feeds money back into the communities. Follow
| right to buy, where the money goes back to the council.
| lelandbatey wrote:
| I think they'd suggest something like: "single family homes
| cannot be rented, only bought or sold to individuals or
| families which must live there some minimum percentage of
| the time."
|
| If zoning codes can make it effectively impossible to build
| anything but single family homes, we clearly have a legal
| framework for distinguishing single-family from multi-
| occupancy apartment buildings. Thus, apply this requirement
| to single-family homes (or at least homes in single-family
| zoned areas).
|
| There are a lot of unintended consequences and edge cases
| to this though, clearly. For example, I live in a building
| that is "technically" an apartment building right in the
| middle of nothing but single family homes. You couldn't
| build an apartment building like this here, now. This is
| because it was originally a single family home but was
| converted into a duplex ~100 years ago (2 different
| electrical services) and has remained a duplex legally ever
| since. I purchased the land and home jointly with a family
| member so that each of our families could live in one half
| of the duplex, which is how we currently live. A home like
| ours could end up being classified in very different ways
| depending on the specifics of a law like we're discussing.
|
| Regardless, I still want my home price to crater if it
| means everyone else I know can buy a home. I hope home
| prices go down massively and the residential speculative
| bubble in this country dies a violent death. The only
| reason we even bought this house was because buying a home
| cost so much money that we had to buy half a home to make
| it a possibility. Even if I'm upside down on this house,
| I'd still rather be stuck paying off the mortgage or going
| bankrupt than hold everyone else financially hostage.
| Housing is too important.
| kbmckenna wrote:
| Restricting ownership may help but there are aren't enough
| houses or apartments in the places people want to live.
|
| Building more housing is the best answer. It lowers the price
| because there is more supply. There simply aren't enough
| homes in the Bay Area, NYC and many other major cities.
|
| If you could build many large apartments in the Bay Area you
| could fill it with people who'd rather live there compared to
| a tiny old overpriced house. Zoning and existing residents
| stop that from being built though.
| kajecounterhack wrote:
| > Building more housing is the best answer. It lowers the
| price because there is more supply. There simply aren't
| enough homes in the Bay Area, NYC and many other major
| cities.
|
| One problem is building more luxury housing leads to more
| rent-seekers / investment homes / transplants, which
| doesn't solve the problems the area faces (e.g. lower
| income families can't make it work, and in addition to it
| sucking for them, they staff lots of critical functions so
| it ends up sucking for everyone since the price of
| everything increases and you get a whole class of
| supercommuting low-income folks -- ask bay area folks about
| their daycare teachers).
|
| We need more _affordable_ housing, likely gated on AGI.
| carlosjobim wrote:
| > They've accidentally become that
|
| There is no accident at all. The bankers decided that real
| estate should be the primary vehicle for new money to be
| created and released into circulation.
|
| This means that the increase in total real estate monetary
| value will always be larger than the monetary value of total
| labour and trade productivity within a nation. It is a
| mathematical fact that won't change unless the monetary
| system changes.
|
| In short: the landed gentry will always become richer while
| the non-landed will always become poorer, under this banking
| system. If you are both a real estate owner and a worker,
| then you should expect your main source of income to be the
| value increase in your real estate. If not already, then
| soon.
|
| So no matter how much the people of a nation work and
| increase their productivity, they will always be short and
| increasingly indebted, because the monetary system works that
| way. This is why there has been a frenzied rush into real
| estate the past decades, because the odds are stacked against
| you getting ahead by working.
| psunavy03 wrote:
| This is justifying tyranny using pie-in-the-sky thinking. God
| forbid someone have a little lake house their parents and
| grandparents built that they want to retire to while working
| elsewhere. Nope, The Party says you can't have that dacha,
| Comrade.
|
| The proper answer is to accommodate the free choices made by
| others and regulate where they intersect with others, not
| paternalistically tell grown adults what they can and can't
| do.
| nostrademons wrote:
| Having homes be investments is a _good_ thing, in the
| original sense of "investment": something that you own which
| you put effort into in the hopes of making it better later.
| Incentives change dramatically as a homeowner in ways that
| are generally beneficial to the community: you are
| incentivized to improve the property, to maintain the
| property, to put effort into the local community in ways that
| make the land and location more valuable, and so on.
|
| I think that what you're complaining about is the
| _financialization_ of investments, where every investment has
| an associated dollar value and that dollar value must always
| go up. This affects more than just homes. The need for
| monotonically-rising corporate earnings makes corporations
| pull all sorts of accounting shenanigans, it makes them cut
| costs and push sales until the product quality is the bare
| minimum people will buy, and it results in all sorts of pain
| for workers in the resulting reorgs and layoffs. The usage of
| Bitcoin as a token whose value just goes up has negatively
| hurt the development of the crypto economy, because people
| aren 't actually _using_ crypto, they 're just hodling and
| hoping $$$ go up.
|
| The elephant in the room here is fiat currency, positive
| inflation targeting, and negative real interest rates. If you
| _know_ that the dollar 's value is eventually going to zero
| (which follows mathematically from inflation being an
| exponential curve), then the sum of the cash flows from any
| productive asset becomes infinite, and the only check on its
| value is that investors can't really reason about infinite
| time horizons. If inflation were targeted at zero (or at
| least some value that gave positive real interest rates),
| then that sum converges and you can speak about properly
| valuing assets and allocating capital efficiently.
| Analemma_ wrote:
| > Is there a middle ground balance where we respect that
| ownership of property is an important, attainable kind of
| wealth building for middle-class people while also accepting
| that a city must also develop in ways that benefit people that
| aren't homeowners, or aren't homeowners yet?
|
| No. I like finding middle grounds where possible, but you're
| asking for something which is inherently contradictory: for
| something to be a good source of "wealth-building", it to
| increase in value (i.e. price to the next buyer) forever, or at
| least most of the time. When that happens to housing, it fucks
| over the next generation.
|
| There is no fix here that doesn't involve terminating housing
| as an investment opportunity. It will be a painful transition,
| but the end state is actually fine. Plenty of countries (e.g.
| Japan) don't treat housing as a middle-class investment and
| they function fine.
| khuey wrote:
| Home ownership in the immediate post-war era functioned as a
| form of forced savings. To the extent it was an investment it
| was more akin to a reverse bond than a stock bought on margin:
| you pay a fixed payment on a loan for 30 years and at the end
| you own a substantial asset. The focus on price appreciation is
| relatively new.
|
| In California specifically this was driven by Prop 13 gutting
| the property tax system and removing the natural check that
| higher property taxes impose on homeowners engaging in the sort
| of anti-development cartelism that has run rampant in
| California in the last half-century.
| goalonetwo wrote:
| Homes should not be an investment.
|
| And Homes are also generally a bad investment even though there
| is a whole lobby of people that try to convince you that you
| need to buy at any price.
|
| The only reason why homes have been a good "investment" for
| most people is that it is a forced saving through your
| mortgage, which most people would have spent stupidly
| otherwise.
|
| But we should normalize renting and investing in actual
| investments like the SP500. Everyone would be better off and
| you would end up with more assets.
| jkaplowitz wrote:
| > Homes should not be an investment.
|
| [...]
|
| > But we should normalize renting
|
| Isn't it investors who would normally own rented homes, and
| own them specifically as an investment, whether each investor
| only owns one home or several/many?
|
| I'm guessing you meant that an owner-occupied primary
| residence shouldn't be an investment, which is usually good
| advice.
| unyttigfjelltol wrote:
| It's been a good investment for many people for obvious macro
| reasons but also because: 1. You can live in it (thus
| realizing value directly). 2. Since you live there you can't
| easily panic and sell in a downturn. 3. Leverage (U.S. gov't
| FHA provides almost 30:1 leverage) 4. Lenders can't liquidate
| you simply on account of decline in value (no margin calls)
| goalonetwo wrote:
| Even with all those points, you would in most cases end up
| with more assets renting something equivalent and dumping
| your down payment and mortgage in the SP500.
|
| Again, the main advantage of a mortgage is that it forces
| you to save. If you are disciplined enough to save and
| invest in the SP500, you are way better off doing that.
| overrun11 wrote:
| Anyone can invest in public companies, how is it unattainable?
| I genuinely do not know what you or the article writer are
| referring to when you make this point.
| AnimalMuppet wrote:
| How about this scenario:
|
| Houses go up in price exactly in keeping with inflation. I buy
| a house with 10% down[1] as a way of locking in the current
| price, to avoid my rent going up every six months, even if the
| initial payment is more than my rent[2].
|
| Time passes. The price of everything doubles. If I had kept my
| down payment instead of buying the house, it would have grown
| into twice as many dollars, and still be worth the original
| amount in actual value. My house has also doubled in value. But
| I only paid for 10% of it with pre-inflation dollars (and since
| then I have paid the mortgage with dollars of decreasing
| value). I come out ahead in that scenario - my net worth has
| grown, even adjusting for inflation.
|
| [1] Yes, I am ignoring the difficulty of scraping together the
| down payment.
|
| [2] Yes, I am also ignoring the difficulty of having enough
| spare cash to make the payments the first year or two.
| flerchin wrote:
| Aligning incentives is how you get everyone pulling in the same
| direction.
| overrun11 wrote:
| The company profiled, Central States Manufacturing, has
| compounded at 20% per year since its formation in 1988 (according
| to the article). In comparison, Amazon has compounded at 23%
| since its IPO in 1997. If you are lucky enough to be a worker at
| an employee owner company that has 1 in a million anomalous stock
| growth you will do very well. This is not surprising.
|
| World wide public equities have grown at 5% real over the longest
| datasets available, 7% for US based companies. Even these numbers
| are misleading because company returns are heavily left skewed: a
| small minority of companies do tremendously well and the rest are
| stagnant or shrinking. From 1991 to 2020, 55% of US stocks
| underperformed 1 month T-bills. From 1926 to 2016, 4% of stocks
| have outperformed the total stock index.
|
| I do not see what is so amazing about this? If you think that
| employees deserve a larger share of the spoils then you can
| advocate that they receive more of it directly as compensation,
| no employee owned corporation needed. If they will make the same
| on net but with some of it locked away in a single company's
| equity than you've just made those employees' economic situation
| _more_ precarious than it was before.
|
| Non-employee equity ownership arises naturally but these articles
| always try to paint it as the result of the nefarious
| machinations of top-hat wearing capitalists. Suppose this company
| needs more capital than employees can raise but won't or can't
| take on new debt. Equity must be sold to outsiders.
|
| The article also wrongly suggests that owning equity is
| exceptionally difficult without employee owned companies: "it's
| hard for most people to get ownership in something." But we have
| a whole public equities market that anyone can participate in and
| innovation has only made it easier over time. Index funds have
| made diversification automatic, fractional shares have solved
| daunting investment minimums and payment for order flow has
| eliminated transaction fees and concern about getting a fair fill
| price.
| tacocataco wrote:
| Mondragon is probably something of interest for this discussion.
| It's a federation or worker owned enterprises.
|
| https://en.m.wikipedia.org/wiki/Mondragon_Corporation
| HumblyTossed wrote:
| Easy for you to say, but did those employees start the business
| with the full backing of their rich parents? No! They didn't!
| Animats wrote:
| Central States is in litigation with some of its retirees over a
| "dilution event".[1] This is like CAP table problems of
| additional funding rounds, where earlier owners are diluted.
|
| The picture in the article doesn't look like a Central States
| product. Central States makes prefab metal buildings. So do other
| companies, most notably Butler Buildings. Most farms and rural
| businesses have some of those. They look nothing like that
| picture.
|
| [1]
| https://ia601700.us.archive.org/11/items/gov.uscourts.arwd.6...
| linsomniac wrote:
| I came shockingly close to being a billionaire, and one of the
| things I've been fantasizing about recently for how I'd spend a
| billion dollars is: angel investing in a private Amazon/WalMart
| replacement (online, retail, warehouse, delivery). Never to touch
| the stock market. With the goal being to build a business that
| could pay people a living wage to work there, and allow them time
| to hit the john when they need to.
|
| Rather than filtering vast sums of the revenue into the C-suite
| and shareholders, coming up with a way to make the workers be
| able to afford housing.
|
| So far, it's just a pipe dream. "We're all in the gutter, but
| some of us are looking at the stars."
| xikrib wrote:
| Doesn't sound like you're in the gutter champ
| SanderNL wrote:
| Businesses are some kind of feudal leftovers that refuse to die.
| The serfs not only accept it, they actively defend it. Meanwhile
| the billionaires lean back and smile.
|
| I don't see why nation states should be democracies, but
| "businesses" should be private dictatorships. It's a waste of
| shared resources. Your personal army of value generating serfs is
| taking away from our collective capacity to do useful communal
| work.
| jackcosgrove wrote:
| I've wondered if there's some way to structure an accelerator
| along similar lines, if not employee ownership then a
| partnership.
|
| For example, it's well known that startups are risky. VCs
| mitigate this risk by spreading their funding across many
| startups. Could founders do the same with their equity? Consider
| an accelerator class with thirty companies. As a condition of
| being in the accelerator, each founder could agree to give X% of
| options to every other founder in the class. If one of the
| companies takes off, the other founders could wind down their own
| (probably failing) companies and join the one success.
|
| You would probably have to tinker with the ratios to provide good
| incentives, i.e. every founder doesn't get an equal share of
| every company; the winning founders get the largest share among
| their class, etc. And the accelerator would have to exercise a
| lot of quality control with whom they admit.
|
| But still it's an acknowledgement that business success is in
| large part random and diversification is how you account for
| that. Or rather, it's an extension of that acknowledgement to the
| founding/managing class of early ventures, rather than reserving
| it for investors.
| krmblg wrote:
| Always considered the idea/realisation behind Motion Twin (a
| french game dev studio set up as "cooperative") quite
| interesting: https://motiontwin.com/faq
| cmpalmer52 wrote:
| I've worked for two companies that had ESOPs while they were
| privately traded. In both cases, the companies were sold to
| larger corporate entities that promptly got rid of the ESOP.
|
| Not that it is all that bad. One sale happened after I left the
| company. The sale of the company included the shares owned by
| employees through the ESOP. So for one sale, I got several tens
| of thousands of dollars (hadn't been part of the ESOP that long)
| and the other company's sale gave me about 150% of my current
| salary. Both went right into retirement accounts to defer taxes.
|
| The mood or "culture" was better, I think, during the ESOP
| period. Certainly cost saving was more on everyone's mind,
| because every company dollar unspent was part of the profit and
| increased the valuation.
| niederman wrote:
| I find it incredibly ironic that this article is describing this
| system as a positive form of capitalism when in fact having
| workers own the capital is the _definition_ of socialism.
| niederman wrote:
| I find it ironic that this is being described as some better form
| of capitalism when in fact having the workers own the capital is
| quite literally the _definition_ of socialism.
| localfirst wrote:
| This happened in South Korea in the late 70s when the founder
| gave 100% of his stake in a famous pharmaceutical company.
|
| Fast forward to 2024, the employers who now own the company are
| fighting amongst each other, involved in bribery, and the company
| is now at risk of a hostile takeover perhaps even bankruptcy as
| they've been losing market share steadily after it became 100%
| employee owned 50 years ago.
| sub7 wrote:
| For private startups, all common stock should be given
| proportional participation rights in all secondary sales.
|
| All too often founders can and do derisk/cash out in funding
| rounds and then the common stock winds up at 0. Employees =
| fucked
| 768tryd wrote:
| Careful, people usually love these ideas until they figure out
| they came from Karl Marx.
| kazinator wrote:
| How does this work? Every new hire has to buy a share of the
| company? Or they get it for free? Are they forced to sell or
| return it when they no longer work there?
|
| Not everyone wants to be forced to buy a risky investment as a
| condition of employment, or just the hassle.
| systemvoltage wrote:
| 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.
| rimmells wrote:
| If 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?
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