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Normal people generally don't dream to be ultra rich, they just want to enjoy life (and have enough money to do so). But a small percentage is obsessed with money and they obviously invest much more energy into gaining it.
This dynamic means that people don't get paid according to how much value they produce but according to how good they are at negotiating and at maneuvering themselves into positions of power from which they 1) take a bigger cut than they deserve according to real value produced 2) further entrench themselves.
Salary negotiations are a perfect example of divide and conquer - the employer has more information, more runway, more experience negotiating, etc. And on top they negotiate with each employee one by one. Imagine a reverse situation in which the people doing the real positive-sum work sit together on one side of the negotiation table and ask their new assistant (so called "manager") how much he wants to be paid.
But the real issue is ownership. People who don't do any work get paid (if not in money directly, then by being able to sell the company). And they get to pass this "ownership" onto their children who contributed nothing at all.
I am convinced a lot of these runaway feedback loops would be destroyed if ownership of a company was by law distributed among employees according to the amount of time and skill level they worked there.
I have an idea I've been batting around: mandatory 1% annual tax on public corporations that is expected to be paid in their own stock, and either held in a sovereign wealth fund, or distributed equally to all citizens. This simultaneously dilutes the wealth of the majority owners hold, boosts public savings (tax advantage to holding rather than selling), and makes ordinary people automatically invested in their nation's economy.
Those are so hard to quantify that I think you'd really have better luck instituting UBI. Both in terms of encoding it into law and getting voter support.
I also want to say, as a market socialist who owns stock, owning stock in your own company is the least diverse investment you can make, except maybe buying a house and then living in it.
And if it's based on time at the company, do I keep the stock when I leave? Am I punished by losing stock if I'm fired? How much of the company is owned by former employees? A lot? None?
If I only own stock while I work there, and I can't sell it, then it's not worth much. It's just a profit-sharing bonus with extra steps.
It's hard to quantify perfectly but we already quantify it imperfectly during salary negotiations. Don't make perfect an enemy of good. We could get a better system _today_ overnight if we just took everyone's salary and used it as weight/skill for distributing ownership per unit of time. We could further improve it by renegotiating on equal footing.
I am not against UBI as a safety net system so that everyone has enough to survive. But instituting UBI before restructuring the ownership system would be actively harmful because, again, we need enough straws to break the camel's back so that people take the time and energy to understand the root causes and oppose them. (Because people's reaction is not linearly proportional to inequality - there's nothing (acceptance/indifference) for a long time, opposition forms only when it's sufficiently bad.)
One large underlying cause of inequality is that we have 2 different reward systems:
a) Fixed money per unit of work (usually per unit of time or per item produced).
b) Ownership which gives full control of the owned structure and therefore the ability to capture the full value produced by it. (Minus money to pay workers but money per person does not scale, ownership per person does.)
These map pretty cleanly to the worker vs owner divide. And this distinction is what we need to erase to erase the class divide.
> do I keep the stock when I leave
Yes, that's the point and this is where it would be better than current co-op systems. Every person's economic input into a collaborative effort is the weight used to divide their ownership. So if you stop working there, you keep your part but it keeps getting smaller relative to the rest as more people keep putting in their work or money.
Money (investment) is a valid economic input and should weight towards ownership. How much? We could use median salary of the country, median salary of the company, or my favorite - divide the investor's total net worth by the number of hours he did worked - this would somewhat erase the advantage rich people would have upon transitioning to this system.
> Am I punished by losing stock if I'm fired?
Interesting question - I don't think so, if you used to contribute positively, you should keep the reward, but you might need to be penalized if you caused harm to the company proportionally to the harm.
> How much of the company is owned by former employees?
That would increase over time up to a plateau as they got old and died. (Ownership should not be heritable.)
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Regarding diversifying investment - you can do that by either working for many different companies or by using your money to invest into other companies.
Thinking about this as buying and selling shares is IMHO misleading - it's more like re-weighting a distribution. Adding an economic input reduces everyone else's share slightly but since that input (hopefully) leads to more revenue, they will be better off (if they don't think so, they (as owners) can vote against taking the investment).
I am not an economist and I still feel like I am scratching the surface of how the economy works so maybe there are loopholes or degeneracies in this system. I'd like to find them and fix them. And I should probably write a proper blog post about this with diagrams since some of this should be easier to convey with images. What I am proposing is similar to some economic systems (mutualism is one of the closest) but I haven't seen this exact thing around weighted ownership.
Circa 1970 Issac Asimov wrote an essay that started with a personal anecdote about how amazed he was that he could get a thyroidectomy for his Graves Disease for about what he made writing one essay -- regardless of how good or bad it really is today, you're not going to see people express that kind of wonder and gratitude about it today.
This discussion circles around it
https://news.ycombinator.com/item?id=47074389
but I think the real working class stance is that you want protection from economic shocks more than "participation", "ownership", "a seat at the table", "upside", etc. This might be a selfish and even antisocial thing to ask for over 80 years near the start of the second millennium, but I think it would sell if it was on offer. It's not on offer very much because it's expensive.
One could make the case that what we really need is downward mobility. Like what would have happened if Epstein had been shot down the first time or if Larry Summers had "failed down" instead of "failing up?" My experience is that most legacy admissions are just fine but some of them can't test their way out of a paper bag and that's why we need a test requirement.
Got it in one. Would I like to travel First Class and stay in fancy hotels? Sure, but I’d much rather have a house that I can improve to meet my needs instead. Would I like a fancy luxury car with all the trimmings over my sixteen-year-old Honda? Absolutely, but the latter is paid off and gets us around just fine. Would I like that spiffy Hasselblad X2D and some lenses? You betcha, but I’d rather take a proper holiday for the first time in fifteen years instead of buying another thing.
The problem is that society at present isn’t organized to prioritize necessities like shelter and healthcare, favoring wealth extraction and exploitation instead. Workers don’t want megayachts and hypercars and butlers, we just want to live more than we work.
Not nationalization, that never works. Distribute each company among the workers. Turn them all into co-ops.
(I've been thinking this a lot but have never seen it expressed so succinctly. Thanks for the new term.)
It can mean moving within a class.
Surely most people want to better their station. To argue against that is insane and counter to every observable fact about human nature.
It can, but it's not how it's used most of the time, so kind of a pedantic distinction.
And many do not even want to "move within a class" that much. They'd be satisfied to keep their job and retain the same constant purchasing power and ability to buy food, feed family, pay rent/morgage, year after year.
Huh, I think I read a book about that once. I forget who wrote it. Carl something, I think?
Many things changed around that specific time, and I think it does deserve scrutiny. Implied cultural factors seem to be merely correlates of greater historical tide, such as https://en.wikipedia.org/wiki/Bretton_Woods_system#Nixon_sho...
My take here is a monetarist.
Understanding the interconnectedness of systems beyond your own realm of expertise is how you learn what needs to be done to fix issues - and avoid falling for snake oil “silver bullets”/“one weird trick” populist positions.
Naturally, unmentioned are those shut out of reasonable opportunities for meaningful productivity, regardless of technical potential (but largely in line with (lack of) social capital). A few years of this maybe encourages an entrepreneurial spirit. Two decades is quite convincing that there's no place for them in the current order.
The upwardly-mobile opportunity hoarders need to understand, much as the wealth hoarders ought to, that the whole thing falls apart without buy-in from the "losers".
Tang ping bai lan.