Every company should be owned by its employees
elysian.press
elysian.press
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.
The vast majority of people in companies are workers. Let's stop optimizing for owner wealth and start optimizing for worker happiness instead.
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...
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.
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
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.
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.
Not sure I agree. If all the baristas did a better job then I think that would positively affect company value.
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.
But 400k barista all doing it well might.
That this a "con", says something worrying about the values that, as society, we have decided are more important
Oh no
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.
Perhaps capital owned companies have the distance to be a bit more ruthless in driving change - however while that may mean you get better short term allocation of capital, it doesn't take into account the other costs.
Everytime a company lays off workers it relies on the state to ensure that those people and their dependents don't starve, potentially retrained and available to be successfully deployed elsewhere. Or to stop them, in their desperation, to gain the materials to live, start breaking the law.
ie there is an element of free-riding of private capital on the State to ensure a stable society that private enterprise existence relies on, while they employ 'creative destruction'.
Good companies - whether employee owned or not, don't free-load, they invest in their own staff through training, they pay good redundancy etc.
You could argue the above is more likely in employee owned companies.
However as I said at the start, in the end it's the leadership that matters.
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.
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?
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.
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
It’s a silly statement that the efforts of Starbucks baristas wouldn’t have a massive impact on the company’s business.
Not sure it'd be a bad thing to have more of the one and less of the other.
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!
If society would be a better place than short term growth be damned.
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.
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?
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.
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.
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?
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.
What gets me most is that rank and file employees in the ESOP almost never have directly exercisable rights as shareholders to vote or have any say in the business. You don’t get to say no to a merger. You don’t get to fire the CEO when his big idea is a flop. The ESOP vote is wrapped up in a trust or some abstraction controlled by an advisor or a board probably appointed by the real board of the company. Ultimately the executive staff and hand-picked insiders will have all the real authority of ownership. Employee stock thus is not much more than a complex pension program for almost everyone. Regular employees will not be real owners in any meaningful sense unless they get into the small trust network of existing owners.
If you’re an early arrival to an ESOP with good growth potential, you will do way better than someone with a little 401K match. They also get great tax breaks. Overall they’re good for employees, but the messaging is usually misleading.
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.
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.
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.
Seems to me the best option would be to offer employees ownership. You could have two compensation structures:
- 100% cash compensation - 50% cash/50% equity
See which ones employees prefer. I'll bet it's overwhelmingly the first.
Having said that no man is island of itself. Current incentive structure works great to motivate individuals to start companies
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.
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."
----
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
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.
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.
Uhm, do you have a 401k?
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.
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.
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.
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."
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".
This, in turn, is caused by the size of the companies being so large.
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.
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).
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?
I'll take the role for a wildly discounted $20m.
It would be hard to do much worse than the recent incompe .. uh, incumbents.
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.
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.)
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.
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.
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.
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
Unfortunately the voters are handcuffed to the two party system by First Past the Post voting and the spoiler effect that comes with it.
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.
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.
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."
They are, in the modern startup world that HN is mostly in. That's why commenters here don't remember there are voting shares.
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.)
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.
"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.
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.)
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.
edit: spelling
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.
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 Familistère 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...
* 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.
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!"?
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?)
The people who need money now will just sell the stock as soon as they can.
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.
So maybe time to re-evaluate the status quo?
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.
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.
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.
Shares prices already reflect an estimate of the long running fate of the company.
> 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.
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?
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.
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.
By that logic, the idea of workers having part ownership of the companies they work for has a lot of upside.
most attainable is buying stock through IRA account.
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.
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.
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...
Additionally, your return over the long term on personal real estate is only 4% per year while the S&P 500 average returns per year are 10%.
Home ownership is not always desirable or the best financial decision for many people.
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.
I'm happy for those employees but man, 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.
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)
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).
* 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.
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.
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.
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.
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.
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
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.
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.
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).
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...
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
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.
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.
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.
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.
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?"
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.
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.
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.
"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.
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.)
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.
How was your experience being an employee-owner at either one of these companies? Did you receive any transparency of the ESOP plan (distributions, allocations, etc.)?
For both companies, how did you receive the funds once the companies were sold to the larger corp companies (cheques, direct, etc.)?
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.
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...
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...
https://freakonomics.com/podcast/should-companies-be-owned-b...
——————
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...
> 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.
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.
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.
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.
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.
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.
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 ..."
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.
Sounds like a nice perk to have but one would obviously be unwise to rely on that for retirement.
Diversification is the one free lunch we have in finance.
My wife is in an industry that’s quickly getting unionized by 20-something who think unions are a paneca and are about to learn unions just create a different set of problems and add misaligned incentives.
What is really needed is something more like Germany where employees are significant steakholders
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?
This is not what "unicorn" means. I do not think this author knows much about what they are writing about.
Not everyone wants to be forced to buy a risky investment as a condition of employment, or just the hassle.
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."
That being said working for a company who actively fights against me makes me just not want to work.
All too often founders can and do derisk/cash out in funding rounds and then the common stock winds up at 0. Employees = fucked
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.
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.
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.
>There is no large company in the world right now that is run this way
Huawei
They can reap the benefit, but also take losses. Seems entirely fair.
Oh wait, it's money. Fungibility is great!
NOT every company should give stock options to its employees, because ... it only makes sense if long term success of the company can be significant influenced by its employees. Also, those stock options can be a barrier to growth and become a liability if needed adjustments are blocked in order to protect "stockholder"
NOT all employees should get stock options, specially not the ones who contribute very little to the value generated.
NOT all employees want stock options, as people just want to take the actual money and be free to switch companies. The stock options are a way to control employees.
employee stock options are interesting when the allow to vote on the board. THIS is amazing - and almost nobody does it, because it would actually shift power to the employees.
In most companies, giving stock options is almost a scam; you save actual money for salaries, pretend to share revenues (you don´t) and lock-in high value employees. Also you spread your stocks so you are more protected against hostile takeovers.
Stock options are a great way for the actual owners to save money and actually become more powerful.
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?
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.
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.
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.
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.
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...
Beat that, bitches! :)
It's surprising how unnecessary they are.
Economics 101 has entered the chat
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
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 £1 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.
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…
I'm no fan of the USSR but they're arguably no more socialist than the National Socialism of the Nazis.
Maybe that’s why they’ve build a wall to keep people in.
We’re leveraging a coop but also combine it with tokenized ownership.
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.