Why We Need a Wealth Tax
S E E D E D C O N T E N T
Why We Need a Wealth Tax
The crisis of income inequality in America is well-known, but there is another economic crisis developing much faster and with worse consequences. I’m talking about inequality of wealth .
The wealth gap is now staggering. In the 1970s, the wealthiest tenth of Americans owned about a third of the nation’s total household wealth. Now, the wealthiest 10 percent owns about 75 percent of total household wealth.
America’s richest one-tenth of one percent now owns as much wealth as the bottom 90 percent.
Wealth is also passed from generation to generation. An estimated 60% of the wealth in the United States is inherited. Many of today’s super-rich never did a day’s work in their lives. The Walmart heirs alone have more wealth than the bottom 42 percent of Americans combined.
America is now on the cusp of the largest intergenerational transfer of wealth in history. As wealthy boomers die, an estimated $30 trillion will go to their children over the next three decades.
Over time, this wealth will continue to grow even further – without these folks lifting a finger. This concentration of wealth will soon resemble the kind of dynasties common to European aristocracies in the seventeenth and eighteenth centuries.
It’s exactly what our Founding Fathers sought to combat by creating a system of government and economy grounded in meritocracy.
Dynastic wealth puts economic power into the hands of a relatively small number of people who make decisions about where and how to invest most of the nation’s capital, as well as which nonprofit enterprises and charities deserve support, and what politicians merit their campaign contributions.
That means their decisions have a disproportionately large effect on America’s future.
Dynastic wealth also magnifies race and gender disparities. Because of racism and sexism, women and people of color not only earn less. They have also saved less. Which is why the racial wealth gap and the gender wealth gap are huge and growing.
Today, government is financed almost entirely by income taxes and payroll taxes – totally ignoring the giant and growing wealth at the top.
So how do we address the crisis of wealth inequality?
A wealth tax, as proposed by Senator Elizabeth Warren, would begin to tackle all this by placing a 2 percent tax on to wealth in excess of 50 million dollars .
According to estimates, this tax would generate 2.75 trillion dollars over the next decade, which could be used for health care, education, infrastructure, and everything else we need.
Not only would a wealth tax raise revenue and help bring the economy back into balance, but it would also protect our democracy by reducing the influence of the super-rich on our political system.
We must demand an economy that works for the many, not one that concentrates wealth in the hands of a few. A wealth tax is a necessary first step.
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Applying a wealth tax and keeping it in effect is the single greatest thing we as Americans can do for future generations.
It will never work because.....
there are simply not enough people that have that kind of wealth (or net worth), for it to make any difference.
If you add a wealth tax to the income tax, the wealthy will leave the country and take their wealth with them.
Dumb idea.
And? Does knowing that there are extremely rich people living in the same country you do complete you? Does the wealth of a billionaire rub off on you? The truth is that no one will leave because the tax is a tiny percentage. The extremely wealthy should just agree to pay and go on their merry way. The hundreds of billions of dollars that will be collected can be used to benefit society.
No....
the extremely wealthy like to lower the amount the goes to US treasury to reasonable amounts, just like everyone else does. The idea that this action would generate hundreds of billions of dollars is simply a wet dream.
yep, even if it did generate the estimated $275 billion annually, what makes anybody think that our government would use it properly?
Don't we already have an inheritance tax to help prevent this sort of dynastic wealth?
They won't have to.
They'll just do some high level accounting and call it a day.
That's a stupid question.
And another. I'm not sure how it's not obvious that having them invest their money here is better for America and Americans than having them invest it overseas.
Ever been to a public school? How do you think those buildings were financed? Ever been to a hospital? How do you think that building was financed? Driven on county roads? Sat in a public park? Do you know what "municipal bonds" are?
They won't leave because the tax will be uncollectible.
Even if you collected it, it would not "benefit society".
The political promise is to reduce wealth inequality. Taxing wealth will make the rich poorer and making the rich poorer will lower wealth inequality. The political promise can be kept by simply imposing a tax on wealth. (The rich will still be wealthy so that shouldn't be a concern.)
But that won't do anything to make the poor richer. The government could use revenue from a wealth tax to pay down national debt, build more monuments in DC, raise the pay of politicians, or any number of things that avoids making the poor richer.
The government could create or expand various assistance programs, too. But that transforms wealth into income, so the poor may become more affluent but still don't become richer.
Presuming they can actually get anybody to pay it, which is more than a bit naive.
Well, that's kinda the point. All these 'proposals' are really nothing more than empty politics that won't accomplish anything. These political stunts only provide a forum for things like flat taxes. (BTW, the Federal tax code already functions like a flat tax so the flat tax, fair tax, and VAT is just political noise to distract people.)
The only viable means of making the poor richer is returning the economy to building wealth at the bottom of the economy. The poor are never going to become investors; finance is stupid way to make the poor richer. Using finance to increase wealth at the bottom of the economy of necessity requires a mechanism for redistribution. The money would have to pass through too many hands before it got to the poor and all those middlemen would take a share.
What the poor have in abundance is time and labor. Those resources of time and labor should be leveraged to generate wealth at the bottom of the economy. Currently finance is the biggest obstacle to leveraging the resources of the poor to build wealth at the bottom of the economy. What we need are taxes on monopolies and some means of progressive incentives (and disincentives) for monopoly businesses to distribute generated economic output. People who do lift a finger to generate wealth should be receiving a larger share. (BTW that's how capitalism is really supposed to work.)
"I’m talking about inequality of wealth."
I thought Obama and company already fixed that ?
It's only really, really, really important now, 'cause Trump is president ?
A wealth tax won't correct the underlying problem that caused the disparities in the first place. A tax, by its nature, would transfer that wealth to government. And as we have seen government has become nothing more than a power struggle between two political parties for the personal gain of politicians and political elite. Government revenue made available to politicians works the same way as inheritance for the wealthy; neither has to actually do anything to obtain the money.
Somehow making politicians richer by transferring wealth through taxes doesn't seem to change anything. That's been tried in the past. Wealth doesn't trickle down from government any more than it trickles down from the wealthy. At best the government only provides a subsistence lifestyle.
Dr. Robert Reich's government-first ideology is much less likely to work today than when Franklin Roosevelt was President. In the 1930s the United States was a producing nation; the United States created wealth by producing things. But that is not how United States creates wealth today. As Dr. Reich points out today's wealth is created by financial investments; there isn't any need to lift a finger. Today's rich aren't getting richer by producing something. Keep in mind that today's politicians don't obtain government revenue by by producing anything, either.
More government intervention might have been appropriate when the United States was a producing nation. However, today's government only provides the same trickle-down subsistence solutions as does the wealthy. Replacing the wealthy with government isn't going to change anything on Main Street.
What Dr. Robert Reich is actually proposing, without explicitly stating it, is to socialize Wall Street. Dr. Reich is arguing that finance has become the means of generating wealth in the United States; therefore, that mechanism of wealth generation needs to be socialized to reduce inequalities.
If the United States becomes a socialist nation, it will happen in the financial markets. And it will be far easier for government to socialize financial markets through taxes and government redistribution than by seizing private property. But that approach doesn't actually remove barriers and obstacles responsible for establishing economic disparities; that approach only replaces the wealthy with politicians. The general public will still be dependent upon wealth being trickled down from those who control wealth.
IMO the only way to avoid that future of socialism and trickle-down government is to return the United States to using production as the means to generate wealth. Production requires labor; working is the most egalitarian means of distributing wealth based upon merit. It would be much fairer to distribute wealth as it is generated rather than through tax/redistribution afterwards. If the United States can compete in its own domestic marketplace then the United States will be in a better condition to compete in international markets. If we can't make things in the United States for our own consumers then we certainly cannot sell things overseas.
The only equitable way of taxing the wealthy is to have a National Sales Tax and eliminate all other taxes and fees at the Federal level. The wealthy are the people seeking status symbols, like mansions and expensive cars.
I would hazard a guess that won't ever happen as long as the Democratic Party is viable.
Sales tax is regressive. Purchases subject to sales tax are consume close to 100 % of a poor family's revenue.
The percentage goes down proportionally, as revenue rises.
This is an oft repeated lie from the left
1. “ Fair Tax
Prebate
How does the prebate work?
Under the FairTax, all Americans consume what they see as their necessities of life free of tax. While permitting no exemptions, the FairTax (HR25/S122) provides a monthly universal prebate to ensure that each family unit can consume tax free at or beyond the poverty level, with the overall effect of making the FairTax progressive in application. There is no marriage penalty as the couple gets twice the amount that a single adult receives.
While everyone pays the same tax rate at the cash register, the prebate results in effective tax rates (annual taxes paid divided by annual spending) that increase as the level of spending increases a progressive tax rate structure. For example, a person spending at the poverty level has a 0% effective tax rate, whereas someone spending at twice the poverty level has an effective tax rate of 11.5%, and so on.”
2. The fair tax eliminates the payroll tax which is the largest tax paid by the middle and lower class
The "Fair Tax" is in part a sales tax. The rest of it is dedicated to alleviating the ferociously regressive character of an unmodified sales tax.
Thanks for proving my point.
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Bob, have you NEVER read any of my arguments on how to implement a National Sales Tax?
1) You exempt things necessary for life. You know basic food items, non-luxury beverages, homes just big enough for the family, small appliances, cleaning supplies, non-luxury clothes.
2) The actual National Sales Tax necessary is 22% on everything else and that gives us a surplus compared to current spending at the Federal level.
Easiest solution possible.
You probably would do better to read more carefully...
Perhaps I have... but they didn't catch my attention.
Your proposition would lock in our current inequalities. We need a system that tends towards greater equality.
You realize that a Sales Tax is on what you SPEND and not on what you EARN, correct? You eliminate taxes and fees on basic necessities and there is no inequality as the poor and middle class no longer get taxed at the greater amount.
Yes.
and
Your proposition would lock in our current inequalities.
How will it lock in the current inequalities, since the tax would not be on items used by the poor and middle class for survival? The only people paying the taxes would be those getting items like DVDs, electronics, luxury items, homes bigger than they need, etc.
It does nothing to correct inequality. It maintains the status quo.
Don’t you understand that Bob and all these good leftists are firm believers as Marx stated “from each according to their ability, to each according to their need”
only communism effectively achieves their sense of “fairness”
You repeating your assertion does not prove how it will do so. So, please answer the question or admit that you either don't know or are absolutely wrong.
I didn't say it would make things worse. I said it would not make them better.
There's no mechanism for making things better.
So, you say that letting people keep more of their money by eliminating all the fees and taxes on services and eliminating the income tax, while exempting necessary items for life will not improve people's economic status?
Granted this is a state level thing but:
Eliminating the fee for getting a driver's license would mean that the person getting the driver's license would be saving that fee.
That means if you are renewing your license, you would not pay the $40 fee, because it was already paid for via the sales tax that is only applied to non-necessary items, like Xboxes and Playstations.
No. Nothing like that.
A sales tax is a tax on consumer income, not wealth. Wealth is something that is already owned. A national tax on wealth would require something like a national property tax.
It's actually a tax on expenditure, not income. Small distinction, but expenditure is more easily controllable than income, giving people more freedom within the taxation system.
I support the idea of increasing opportunity, prosperity and wealth to more people. I don't know if a tax is the only or best way to do it. Maybe, maybe not. Seems like we should have some level of taxation. The question is always: how much?
What struck me was the way Reich characterizes the wealth and the wealthy who hold it. He talks like they cheated somebody out of it. As if it belonged to someone else and they stole it.
Why shouldn't the Walmart heirs have money? Why shouldn't they control a huge corporation? You can say they didn't work for it and that might be true, but so what? Why is that important? If you could make enough money to make life easier on your kids and grandkids, wouldn't you do it? That's all that's happening at Walmart. The wealth of the Walmart heirs does not steal from anyone else.
What is supposed to happen to family owned companies - which, by the way, are the backbone of our economy? Are companies supposed to fold up shop when the founder dies? Is the market supposed to reset? Nothing gets passed on? It all gets passed on to the state? What did the state do to earn it? Why should other citizens who did nothing to create that wealth have any claim to it?
I'm not suggesting we shouldn't do anything to more broadly generate wealth, but if this is a moral issue as Reich frames it, then our moral concerns should apply equally to the non-wealthy.
You've gone to the heart of it.
IMNAAHO, your first two questions should not be interronegative ("should not"). Try these:
- "Why should the Walmart heirs have money?"
- "Why should they control a huge corporation?"
I believe in equality of opportunity. I believe in realizing one's own best.
The Walton heirs were far, far, far from equality at birth.
They have never controlled a huge corporation. They have never had any significant role in Walmart management. They have done things like charity.
It's important that they have done nothing to deserve their fortunes, because there are millions of Americans who are born with zero, and who have done nothing to deserve their poverty.
Such differences are, in my opinion, the absolute opposite of "equality of opportunity".
So if a person has worked for their wealth over $50 million should be exempt?
The reasoning here is all over the place.
Because it was founded by Sam Walton and he should be able to make as money as he wants and dispose of it as he pleases.
Because Sam Walton built that corporation and should be able to turn it over to anyone he wants. These are basic property rights.
Sam Walton was born into poverty. His parents lived on a farm in Oklahoma. He didn't do anything to deserve that, but I can't think of a moral justification for taking someone else's money and giving it to him. Instead, Walton overcame his humble beginnings to become - for a time - the richest man in America.
When we look at poverty, we often speak of a "cycle of poverty," but the great thing about America is that anyone has the opportunity break out of that cycle. Once they do, why would they want to doom their descendants to that cycle again? Wouldn't they want to do something - even if it's a relatively small thing compared to Wal-Mart - to improve life for their family?
But if the government is just going to take it all away, why bother? Why go to the trouble?
There will always be differences. You can't legislate a perfectly level playing field into existence. I could never have the opportunities of LeBron James because you can't legislate me to be 6'8". What about the great scientists and inventors? I wasn't born as smart as they are, so I don't get to invent the iPhone or personal computer. That's not fair either.
The thing about our system is that we all have the freedom to be the best us we can be. It's never going to be perfect.
Now, having said all that, I recognize that sometimes things can get so out of balance that it's bad for society or the economy overall. In that case, we can make some small adjustments, but I think it's overreaching to suggest that the heirs of successful people shouldn't have access to the wealth and accomplishments of their parents. It's also bad for the economy. Imagine if Wal-Mart just dissolved when Sam Walton died. Or Sears. Or JC Penney. And on and on. Imagine if Ford had totally liquidated when Henry died. How would that be good for the country?
WTF??
Inheritance is not a right. It is a privilege that those who rul us give to themselves in order to sustain the power of their dynasty.
In my opinion, the ownership of a company should be shared among the employees, beginning with the very first hiring. (The formula for sharing is open to discussion.)
He didn't say inheritance is a right....he said the owner of the wealth can leave the money (property) to whom they please. Not any different than leaving a home to relatives if they so desire that is their right of ownership. It isn't your money/property or the states, it is theirs to disperse as they please. Someone can leave $50 million to a dog if they choose. None of your business.
I have worked for an ESOP company for 15 years and they are not structured any different than a public company. Only difference is the employees have stock ownership. And the shares have to be earned (purchased). Not any different than buying shares for a public company in the market.
Of course it is.
"Property is theft" - - P J Proudhon
Property is not a right. It is institutionalized robbery.
"Rights" do not take anything away from anyone else. My free speech in no way reduces yours. Your right to a speedy trial in no way reduces mine.
Property is different. What I own, you cannot own.
"Property is theft" - - P J Proudhon
Bunch of socialistic hogwash.
Try living in the real world, instead of some absurd collective belief system.
Correct. But bequeathing your property to whomever you choose is a right.
So, the moment you get hired by a company, you deserve a voice in how that company is run? Where it's located? If it can be expanded or sold? If the production/service should be diversified or not?
That means there's no such thing as private ownership of a company. If I start a company, why would I ever hire someone who wasn't family? Heck I might not hire anyone ever. I don't want strangers forcing me to do things with my company.
Employees are compensated for their work with money and/or benefits. If the owner wants to share ownership in the company, that's his choice, but how can you force someone to give that up? Why would you want to?
Please send me your computer right away. I need to use it for a while.
And here we are at full insanity. That didn't take long.
Nothing is stopping you from starting such a company. Shared ownership is a common technique used to attract top talent. I wish you every success.
Try answering, instead of vociferating.
I think you'll find it's not.
Repeating the insane ranting of a French anarchist does not somehow magically reduce the stupidity of his statement.
The US Constitution disagrees with you....as does most of the rest of US law.
Nowhere, to my knowledge. How would you justify it?
I said nothing of the kind. What part of "The formula for sharing is open to discussion" is unclear?
Fine.
"Strangers"? You just hired them! "Forcing"? How? You're the senior partner.
By passing a law.
Equality.
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Please... This is too frequent. You're assuming stuff - in general, bad stuff - and then you argue against that You don't ask, you assume. Do as you wish, but from now on, I won't get involved in such conversations with yourself.
Oh?
I think not.
You got the appropriate answer to such nonsense.
Perhaps Mr. Reich would like to share his stolen wealth.
I am discussing it. I'm sorry you don't like what I am saying. I'm not trying to annoy you. This is what I believe. As I indicated above, I am open to adjustments - as small as necessary - but you are talking about eliminating fundamental property rights.
I'm taking your suggestions to logical conclusions. The concept of private property means that people have control over something, whether it's money, real estate, or a business. The law recognizes a "bundle of rights" related to this property. Most fundamental to these rights are the rights to control and dispose of the property as one sees fit. So yeah, if you want to take away those rights, "bad stuff" is the consequence.
It's not fine. A single individual, operating on his own, could not - for example - create the Ford Motor Company as we know it. And I don't just mean as we know it today. I also mean as we knew it in the 1920s and 30s. Corporations like Ford were able to generate such massive industrial production that allowed America to turn back the aggressive tide of Nazi and Japanese imperialism. You take away private property rights in business and we're all speaking German and Japanese (that is, the white non-Jewish people who are still alive to walk the streets).
I know that sounds extreme, but that's a real and possible consequence. You take the stability of your current life for granted. That's why this is so important. The freedom to make your own fortune incentivizes people to do amazing things that can ultimately benefit the whole society.
Look back at Walmart. Look at the huge variety of products they are able to bring to market cheaply. How many millions of Americans benefit from being able to purchase everything they need at low prices? And those items are available every day. Contrast that with life in communist countries where they line up around the block for toilet paper.
You're taking your perceptions, not always accurate, to your conclusions, completely divorced from mine.
I'm not involved. So I won't respond
It most certainly does protect life, liberty, and property.
Hey feel free to correct me where I'm wrong. You say you want to have a discussion but then all you're doing is complaining about my responses. I have no idea specifically what it is you find inaccurate about anything I have said. Don't say you want a discussion if you're not going to participate.
That's not how it works. If you'd like to discuss what I wrote - exactly what I wrote - fine. If you'd like to ask questions, fine. If you'd like to present your own thoughts, fine.
But I won't go down the rabbit hole of discussing what you imagine to be my ideas.
I literally quoted you in every single comment I posted and then I responded to those quotes. They weren't summations. I copied and pasted. So, what you are suggesting has been tried - multiple times.
Please re-read: " If you'd like to discuss what I wrote - exactly what I wrote - fine. "
You said " I'm taking your suggestions to logical conclusions. " Those are your conclusions, obviously... and they are what you discussed, rather than what I wrote.
Once again... I see no point in discussing what you imagine to be my ideas.
If you'd like to give your ideas we can discuss those... or we can discuss what I have written.
Of course they. And I based those conclusions on your statements. What else would I be talking about?
Bob, seriously, why are you being like this? If you disagree, say so. Say how. Please say why without vaguely accusing me whatever it is you think you're accusing me of. This exchange between us is silly. You can't say I'm not reacting to what you said when I quote you and my comments connect to your words.
Tacos, seriously, why are you being like this? If you disagree, say so. Say how. Do not invent stuff and then ask me to discuss that.
You're asking me to discuss "something" that is not mine and not yours. What's the point?
Really? What specifically did I invent? Which quote that I copied and pasted was not directly copied from your comment?
And if you don't like my conclusions, I invite you to say how they are wrong. That's what a debate is. But don't say I'm inventing something or not responding to your words. That's not true.
Look... I will not discuss what you imagine about my ideas. I will discuss what I wrote - precisely what I wrote - or your ideas, if you wish to present them.
Otherwise, I think we're done.
The company would be owned by the workers.
You could bring on only family members, if that is your desire. You might, however, go outside your family to get needed talent and/or a larger workforce.
Your decisions will be affected by the competitive environment and your goals.
Right. So, for example, you open the first McDonald's. You want to sell burgers and shakes. You buy property. You build the restaurant. You buy cooking equipment. Your product is popular so you hire a bunch of people to work the restaurant. Then they decide McDonald's should be in the shoe business so they sell all your restaurant equipment and start selling shoes. They can do this because they "own" the business.
What the hell kind of system is that?
Not sure, your scenario is slightly confused.
First, franchising a McDonald's implies a purely private ownership capitalist-based enterprise. (Although, McDonald's in particular leases the land and building to its franchisees so this is not a great example. But we can ignore those details to stick with your scenario.) Here you as the entrepreneur have acquired all the capital resources, assumed all the risk, got no support from the community at large and then hire people for their labor. To then go one step beyond that and give all workers voting rights makes no sense whatsoever. No system proposes anything like that.
So change your scenario to what is actually proposed (and in operation). The scenario is the worker cooperative. In this scenario a group of individuals collectively form a business. They are, in effect, partners (not necessarily equal partners by the way). These individual will 'hire' people (bring on more partners) when it makes sense to do so. If 'hiring' an individual is worth the dilution that takes place (and the nominal reduction in voting power) then they will do so; otherwise they will not.
The full scenario is a worker cooperative in an environment where the capital resources are effectively leased (not acquired). The individuals have not put out major upfront capital but they will be paying (in effect) a tax for using the resources. The risk/reward scenario is very different from what we are used to in our system (fully distributed) so to evaluate you need to recognize that. In other words, do not take a purely capitalist scenario and then drop in the factors of workplace democracy. That is a distorted scenario and will, of course, make no sense.
I wasn't talking about a franchise. I specifically said it was the first McDonalds. Besides, it's just a hypothetical. It's an archetype. It could be any burger stand.
Well, yeah. That's what we've been talking about. That's what Walmart was. We started this thread with Walmart. Walmart started out as a privately owned company. They've since gone public, but all that means is that people have been allowed to purchase ownership shares. The decision - and the right and power to make that decision - rested solely with Sam Walton.
But you are saying the workers would be owners. Ownership implies the right and power to sell or destroy. The people who already own the company purchased that right and that power. Workers are already being compensated for their effort with salary. Now, some companies will also compensate employees with shares in the company, but that's something that is negotiated between private parties, i.e. employer and employee. If the employees do get a share in the company, it's because of that negotiation, not because they have a right to it.
Where in this thread was that proposed? Obviously if workers combined to form a company, they would have ownership rights. I haven't been talking about that at all with anyone.
... and that is how I addressed your scenario if you noticed.
Yes, but you put forth a scenario of an entrepreneur taking all the risk who then simply turns over control to his collective employees. I know of no system that suggests anything like that.
It is not proposed in this thread. I had just noted that no system correlates with what you described. Now I am suggesting that you focus your questions or comments on systems that actually do exist or have been proposed. Workplace democracy is the prime example.
Yes. You instead put forth an example that I have noted does not match any system I have ever heard of. I agreed that what you proposed makes no sense. And since I know of no system that matches your proposal it does not make much sense to talk more about it. Maybe talk about a system that actually has been proposed?
I really don't either, but in the context of a conversation about Walmart, Bob wrote:
So to me, that says that the first person Sam Walton hired - and every person he hires after that - should own part of the company. As you can see, that is not a proposal that a collection of workers came together to form a company. His scenario is a formed company making a hire. And then turning that hire into an owner. And every hire after that.
I think that's insane. That's what I have been responding to.
Then I don't understand why you would claim it had been proposed or why you would criticize me for not talking about it. Kinda weird.
Again, if it hasn't been proposed in the conversation I have been having, why would I be talking about it? (that question is rhetorical). If you want to start a conversation with a different focus, go right ahead, but that would require you to make the proposal, which as you acknowledge, had not yet happened.
Go ahead and propose one. I will probably be happy to discuss it.
I am confident that is not what Bob meant. I would be surprised if Bob would put forth a scenario in which one person takes the entrepreneurial risk and then freely shares control over the entity with all employees.
He might put forth a scenario where one person starts a company and then takes on additional partners who bring sufficient value to the entity to warrant sharing equity. For example, Sam Walton with a one-man store who joins forces with another person who brings another store, franchise options or a cost-effective supply chain. But to hold full financial risk and then give up control each time the entrepreneur hires a new clerk is an unworkable model. Nobody would do that, nor should they.
Workplace democracy in a cooperative organization is the obvious system. What I am trying to do is distinguish classic entrepreneurial structure and dynamics from those of workplace democracy. What you seem to have in mind is somewhat of a hybrid that does not exist (and I do not think could possibly exist).
You are right. That is not what I meant. It is NOT what I said.
I am very tired of Tacos's habit of "paraphrasing" in a way that in totally adulterates the original ideas. Tacos said :
Since when does "own part of" mean "have control over"? I said explicitly that the modalities of acquisition are open to discussion. I'm not going to discuss what someone else imagines to be my ideas. I'll discuss what I write... or what the other person writes... but not something completely imaginary.
Instead of presuming... whatever ... why doesn't Tacos ask , "What is to prevent newly hired collaborators from 'overthrowing' the founder, and taking the company in a different direction?" That would open up an exchange of ideas.
I agree. In general (leaving Tacos! out of this now) I find that disagreement rarely leads to discussion or honest debate. Rather, disagreement yields argument where the other person seeks to publicly show you to be wrong. Presumption, misinterpretation, and other tactics tend to be liberally employed.
OK, I'm asking.
Because if I start my own private company, there is no way in hell that I want to be forced to give every employee I hire part ownership. If I'm taking the risks, why should they get the benefits?
Certainly not. In a scenario where one person assumes the financial risk, provides the entrepreneurial leadership, etc. and hires people to help her achieve her vision in return for compensation, it makes no sense for her to simply give up control.
The workplace democracy concept does not fit well in an entrepreneurial example. The more appropriate example is a group of people forming a business to manufacture and/or sell basic goods such as hardware. They all participate in the risk and the reward (albeit at different levels based on performance) and they bring on new workers (partners) if the perceived value of the new worker is worth the further dilution of control. In a socialist environment, the capital would not be provided by the owners but rather leased from public domain. The risk is very distributed and the community thus has general, indirect say in what every new business does. For example, a business that pollutes the community might find restrictions on its access to the means of production.
Why?
Because that is not how the concept of workplace democracy works and I am confident that this is what Bob has in mind.
The closest I can come to the scenario Tacos! illustrated is a professional firm (e.g. a law firm) where the firm is established by a few partners. To expand they will bring on additional partners who will bring value to the entity but also dilute control. But even here, the firm will have workers (not partners) who will work only for direct compensation so it is not a great analogy.
Another example is a group of workers forming an entity which then acquires a traditional company. The workers are all owners and continue to operate as a workplace democracy rather than a traditional structure. At this point, they would 'hire' new workers as part owners (sticking with the workplace democracy concept).
1 The new employee would have to buy their shares.
2 There are voting and non-voting shares.
3 A contract of shareholder alliance restricts strategy to a restricted zone for a given period.
I'm sure there are any number of other possible dispositions.
But that's not what Bob said. He said:
And he talked about using the law to force that. His comment, to me, says that if I start a company, I should be forced to share ownership with all of my employees, beginning with the very first hiring. And I am vehemently against that.
Private companies don't necessarily have shares. And how would you value them? What if you want to sell them - if they're not publicly traded, they won't be very liquid. The SEC doesn't get involved ... sounds pretty risky to me. And the whole point of staying private is to NOT dilute ownership or control.
As for public companies, all employees are free to buy stock in any company, just as I am.
And as any financial expert would tell you, it is NOT smart to invest much in the stock of the company where you work. It's too risky. Look at Enron as a major example of that. They recommend that if you do get shares of your company's stock, you sell it and diversify.
Yes, he is talking about workplace democracy. (Although 'hiring' is a poor choice of words.) If every worker is also part owner (with voting rights) then you have the basis for workplace democracy.
Describing this as one person starting an entity and then 'hiring' the second, etc. is misleading. Much better to describe the genesis as a collective effort where the workforce as a whole initiates the enterprise.
If that is what Bob meant then he is talking about a system that I am not aware of. I think there are quite a few missing details that would emerge if you discussed this with him.
The key here is "to me". That's what you understand.
It's not what I said, nor what I meant.
I am s-o-o-o-o tired of people drawing conclusions without ever asking a single question.
Another thing to keep in mind is that under Bob's scenario (if it is workplace democracy) the enterprise remains exclusively private. All shares are owned by the workers. There are no external owners.
Except it is what you said:
Every employee is an owner, from the very first hire. That's what you said.
Which, BTW, would seem to be in contradiction to your "property is theft" and "property is institutionalized robbery" statements.
Since always. Those employees would have control over their shares. That's what "ownership" is. If they don't have control over their shares, what would be the actual point of owning them?
You made a statement that said that companies should be forced to give ownership to all employees - starting with the first employee - so how am I supposed to take it? If I start a company, I would be forced to give part ownership to the very first employee I hire. You said nothing about forming a cooperative. If that's what you meant, you should have stated it so as not to be misunderstood.
Voting and equity vs. equity only. Is Bob referring to control over the enterprise or shares? Logically he would be referring to control over the enterprise.
Why? I realize you are a fan of workplace democracy but that's no reason to presume Bob is.
How does that coordinate with Bob's "property is theft" and "property is institutionalized robbery" declarations?
The "first hire" in such a firm will not likely be an additional partner. It will be clerical or support staff.
Again, you're not talking about the "first hire". You're talking about an established business that has made many previous hires.
For public companies, it already works that way.
For private companies, it appears to be forcing the owner to give all his/her employees part ownership - basically outlawing private companies which aren't cooperatives. And that would mean a lot of people wouldn't bother starting a company in the first place. I shouldn't have to issue shares in my private company if I choose not to.
You know what would be really nice?
If all these folks with these "feel good" schemes would actually do with their own money what they want others to do with theirs. Form a company, come up with capital and a sound business plan, ensure whatever they deem to be a "living wage" today is paid to all employees/owners, and take the risks involved WITH THEIR OWN MONEY.
No one would care.
You presume I am a fan of workplace democracy because I explain it? Stop presuming Jack.
I do not know. I am not that aware of Proudhon.
Exactly. Ergo my comment: "But even here, the firm will have workers (not partners) who will work only for direct compensation so it is not a great analogy."
Yes. That is what I am talking about. If you are going to grab hold of Bob's "first hire" phrase and presume that his concept can only literally mean a single person starting an entity and hiring another person then you will never understand his position. If you want to understand his position then ask him a direct question.
I am not going to pack all that he has in his mind relative to workplace democracy into a meaning that literally supports "first hire".
A person being logical does not state that property is theft or that the US Constitution does not protect property rights.
You are presuming what Bob means.
So if, as Bob has said, there would be voting and non-voting shares, who gets which? If the employees have non-voting shares, that's certainly not workplace democracy. If the original owner's shares are non-voting, then control of the company will be transferred to the employees almost immediately.
Given the context of Bob's previous anarchist statements, I'm not at all sure it's safe to presume that Bob intends for the original owner to have any say whatsoever.
You're throwing up every objection you can think of, without making the slightest effort to resolve them.
I could give you answers, but your attitude tells me that you would simply find other objections.
So... I'll let you think about it. If you want to find solutions, there are plenty. If you don't want to find solutions, there are none.
I tried quoting him but he didn't like that. You're speculating about what he meant. It's a waste of time at this point.
Go ahead. Explain how that would work.
That is not the scenario. It makes no sense for a person to capitalize an entity and then turn around and simply give away control (which you are implying would happen).
I don't want to find a method to force people who start businesses to give all their employees ownership. If people want to form a cooperative, they're free to do so. If they want to start their own business and run/own it themselves, they should be free to do that as well.
"Workplace democracy" is not a phrase Bob used. I see no justification for assuming that's what he was talking about.
Speculating sure. But my 'speculation' is grounded by the fact that Bob is an advocate of workplace democracy. It is rather safe speculation to speak of basic workplace democracy.
At this point, given all that I have written in this thread, I suggest you read what I wrote. If you want to discuss some specific factor further let me know.
As noted, a system that would force an owner to distribute ownership is a system that I am not aware of. That is not how workplace democracy operates.
I didn't imply it--you assumed it.
Why wouldn't the people forming the company not invest in it?
A bunch of like-minded individuals who think personal ownership of companies by an individual could easily form their own company and run it as they see fit.
What I am suggesting is that people who think that way live that way---DO IT THEMSELVES before trying to make everyone else do it.
It is obvious to me. I recommend you ask Bob if he is talking about workplace democracy, cooperatives, etc. He is right here.
Gotcha!
This is s-o-o-o-o boring...
Bullshit. I knew you were going to play this game.
Your scenario is classic entrepreneurship unless you imply the distribution of ownership which is the core topic of this thread. Read what you wrote:
The above describes one or more entrepreneurs providing capital (their own money) and executing their business plan assuming all the risks.
Ever start up a business Texan? You just described an extremely common scenario.
And I'm getting kind of tired of you attacking my character and lying about me. You keep trying to portray me as someone who is up to something nefarious. I'm just here to comment on the topic. You accuse me of not responding to what you actually write, but I have quoted you exactly in every post. You claim I don't ask questions, but I have asked several questions. I have asked you more than once to correct me where you think I am getting something wrong and you decline. Instead, all you have done is attack me personally. Now you have decided to talk about me to others and make me the topic of the seed.
Ownership of property has always meant control over it. What else could ownership mean? (Wow! Look! a question! What are the chances it will get answered?)
Go for it. Suggest some.
Clearly not true. I have quoted you several times and you refuse to discuss what you wrote, insisting only that I am assuming things about your position. At this point, it's an obvious lie.
Another lie! I addressed that exact topic way back in @7.1.8 when I wrote:
Did that question open up an exchange of ideas? Hell, no! Bob, people have tried to engage you in discussing the topic. I'm not the only one. You refuse. The only person stopping you from having a conversation on the topic is you.
OK fair enough, but that does make it more difficult to fit Bob's declaration into some sort of workplace democracy framework.
My living is made consulting with small and medium sized businesses on compensation and the compliance surrounding it. My team and I have literally been through thousands of "first hires". They include everything from the single person you describe to the multinational opening it's first US offices to the four lawyers breaking off from the previous firm to the landscaper who gets caught calling his crew "contractors" and gets in trouble with the IRS. I know what first hires look like far better than most people.
If I said "give", I misspoke. You would be forced to sell. The price would be negotiated. The shares might be voting or non-voting, or a mix, or convertible. Your work contracts - tasks, salaries, bonuses - would be different.
If seems to me that a competent founder would have nothing to worry about. An incompetent founder probably wouldn't be hiring...
That is not helpful.
Bob, are you talking about workplace democracy?
Does your 'first hire' phrase mean that workplace democracy necessarily starts with a single owner who then distributes ownership to each 'hire'? That is, do you not find that the most common scenario is a group of owner/workers collective start an enterprise and choose to operate as a workplace democracy?
Further, is your qualification @7.1.42 an example of how workplace democracy could start with just one person or are you suggesting that what you outlined is how it must work (always start with one owner)?
Why do you make it personal?
I am well aware of what I wrote. I am sorry you don't understand it. I suppose it is easy to overlook this part: "If all these folks with these "feel good" schemes would actually do with their own money what they want others to do with theirs"
That means if people who want collective ownership would do it themselves instead of imposing on others, GO FOR IT. Do it themselves. Leave the rest of us the hell alone.
I can't make it any clearer.
Either you choose to understand or not--not my problem either way.
I'm pleased to be quoted.
I am not pleased when you reformulate and denature my meaning.
Your protestations make me wonder if you can tell the difference between my words and your misinterpretation of them.
Not my problem.
Yes, trying to describe workplace democracy starting with one owner is tough. I can see a very small business (e.g. a little candy shop) growing this way. They would all be candy makers but would take turns cleaning, sweeping, taking out the garbage, etc. Some would focus on the books, others would focus on supplies, etc. That could grow incrementally as a workplace democracy.
The easier to understand scenario is to start with a group of workers.
Not really the point though is it? As I noted, if you insist on filtering this entire concept through those two words in Bob's opening comment (which is just a post, not a definition or well-crafted academic work intended for publication) then you probably will never understand what the man has in his mind.
OK.
Then we have nothing to talk about, here.
TiG and I have discussed similar issues many times. We are familiar with each other's ideas.
Of course, I favor workplace democracy. But at the moment of first hire, with just two persons, workplace democracy doesn't mean much.
Bullshit again. What you described was not a 'feel good' scheme. It was classical entrepreneurship.
See, you admit that you were implying collective ownership just as I noted. Your description ....
... is basic entrepreneurship. Since your tone was one of dismissal you had to be implying something more than what you wrote. I noted that you were implying distribution of ownership. You denied that and then come back noting that you implied collective ownership. You directly contradicted yourself.
You directly contradicted yourself. It is your problem.
Oh, FFS.
I KNEW you didn't understand.
No point in this with you.
Have a nice day.
Exactly my position. Bye.
I have not implied evil intent. I avoid talking about intent because I'm not a mind reader.
You have indeed quoted me... and then immediately "drawn conclusions" and discussed those conclusions rather than the quotes. I'm beginning to realize that you truly do not understand the difference. Your problem, not mine.
...
What part of "own part of" do you not understand?
...
That was not simply a question. It was an aggression. You were not encouraging conversation; you were aggressively shutting it down. If you're polite, I'm polite. If you're rude, I'm rude.
I wasn't particularly talking about workplace democracy, but obviously that's closely related to ownership conditions.
I was thinking of a one-person company taking on a first collaborator, because I've been there... but the same ideas would apply to a group of people establishing a company.
The important thing to keep in mind is that while "ownership" - and dividends - should eventually be equal among all participants (probably after a buy-in period), work contracts would vary according to the contribution of each participant. An engineer would earn more than a draftsman. (Do those still exist?)
IMHO - that's my opinion and nothing more - workplace democracy is not so much about ownership as about management. Small companies can operate like small towns, with assemblies of everyone. Larger companies would probably have to use representative democracy.
The role of the assembly would be defined in the company's charter. Minor decisions in frequent meetings, more significant decisions in less frequent meetings.
The obvious problem with that scenario is when the one-person company hires an administrative assistant as the first hire. If the point is to discuss underlying principles that manifest in concepts such as workplace democracy this will confuse people who are looking at this strictly from the perspective of conventional capitalism.
I offered another example. Imagine a sole-proprietorship candy maker. The 'first-hire' might be to bring on another candy maker. The subsequent 'hires' might also all be candy makers. Everyone is working the means of production to produce the product. Then we have some who focus on customer-facing, some who focus on the books, others who focus on supply chain, others who focus on equipment. All might participate in cleaning, promotions, maintenance, etc.
That I can see as an example of how a cooperative enterprise might form from a single business. However, this still poses a problem depending on how much the original owner invested in the enterprise. If the original owner bought the equipment, developed the brand, etc. the distribution of ownership will be a bit awkward. If everyone buys into the business as you suggest, that could be a solution.
When you imply that my view is limited to "one owner hiring one person", yeah, it kinda is.
These two words are a pivotal indicator that you and Bob are not talking about the same thing.
You will no doubt notice that I've expressed no objection to the concept of employee equity. In fact 2 days ago I said there was notthing stopping Bob from starting such a company.
The fact is that various forms of employee ownership exist everywhere. It has been a common tool for attracting top talent for decades. We've helped clients establish many such programs.
But those programs almost never start with "the first hire", and they are never mandatory. Bob's plan would require both.
Communication styles and context clues being what they are, I find it nearly impossible that "Bob" is actually male. Not that it matters.
But context does matter, and in the context of Bob's other statements both on this and other seeds, it is certainly fair to draw some conclusions similar to those Tacos has drawn.
Same underlying philosophy, he is just expressing it with an example that I think misleads people.
This is about distributed control among the workforce.
I don't see why. The company decides how to distribute profits. Part goes to salaries and part to dividends. In a "Boss & secretary" configuration, each would receive the same dividend, but not the same salary or bonuses. I don't see the problem.
Bob's expressed views on this topic are very different from your expressed views.
For you, yes... I believe it is. I do not think that describes Bob's view.
No.
If you think so, you have not understood us.
In this scenario: why would an admin assistant receive the same dividend as the business owner, the person who put up the capital, had the ideas, took on all the risk, etc.? The admin assistant is clearly not a partner in the business sense, so why would they be treated as one?
What if the business owner wants to re-invest the profits into the company and has no interest in issuing dividends? What if the owner has no interest in issuing stock?
When you say "same dividends", is that "same $ amount" or "same dividend per share"? Does the secretary have voting shares? What would be the minimum % of the company distributed to each employee?
Does the administrative assistant have voting rights? If so, in a two person company would the AA have a 50% vote?
I understand you both very well.
To start, you have said your idea "forces" businesses to share equity. TiG has stated repeatedly he does not support that.
Because both hold the same shares. Don't forget that their salaries are not the same.
Both are now owner.
The newcomer must buy their share, so both are now putting up the capital.
Old ideas are covered by the newcomer's share purchase. New ideas are covered by differing salaries and bonuses.
Both are now taking the risk.
The thing is, most small private businesses don't issue stock in the first place, and I doubt if many issue dividends. They don't have a board and therefore have no voting members. Bonuses would be how an employee gets rewarded for doing something exceptional, or as a profit-sharing mechanism.
Open to discussion.
I'd let them decide.
Seriously? You consider that essential?
I repeat, you have not understood us.
We're talking about a new legal context.
Bob is not talking about a classical capitalist model.
Any small private business can distribute equity and/or control using any number of methods. Shares is just an easy way to express the concept of distributed ownership.
A more elaborate view of workplace democracy is one where the enterprise consists of worker/owners with different compensation but a single vote. Democracy is prevalent. The management structure itself could take the form of council management where the traditional manager is replaced by a team which is elected by the workers (or by lower councils) and whose head (chairperson) is elected by the council. Each manager's position depends upon continued satisfaction of those who voted them to assume the role.
This gets complicated, and is quite different from what we are used to.
And yet you then accuse me of this:
All of it, apparently. Maybe you could explain it. I won't hold my breath.
Agreed way too much focus on a single word or phrase. Best to ask qualifying questions rather than anchor literally on individual words and insist they critically determine the point.
Both now own 50% of the company? What happens when they hire employee 2?
So the secretary effectively has to buy the job? What happens if they lack the capital?
Thank you. It's incredible to me that somebody actually flagged your comment. I can't imagine what for.
Someone who owns part of something... does not own all of it. Owning part does not give control.
I'll give you a few minutes.
I'm sure that any intelligent person can find answers to your questions very quickly.
Jack, I am not talking about personal support or personal aversion to anything in this thread. I am simply communicating known concepts.
To wit, when I explain a concept that does not mean that I support it. If I support something or am against something I will state that explicitly.
Then who controls? And what is the point or benefit of ownership?
I get that. Where I'm having the problem is imagining them being forced to distribute equity and control. I wouldn't start a company if I knew I would have to give control to people who, quite frankly, might not be qualified to help me make business decisions. Someone can be a really good janitor, secretary, IT geek, or engineer - and not have a clue about how a company should be run or be able to look at the big picture. It's a completely different skill set.
I can guarantee with that situation the company would not prosper very long. It is too complicated for most and open to extortion, favoritism, corruption and a host of other problems.
I have worked for an ESOP (Employee Stock Ownership Plan) company for 15 years that employs about 90. I am their accountant so I am very familiar with structure of the company and stock options/ownership of the employees. It is not a Democracy and if it was the company would not survive the weight of it. We are structured the same as most companies as far as the levels of responsibility and appropriate compensation. Employees do own shares and earn shares on a annual basis. ESOP's can also be S Corps too. There are many different ways to set up a company as employee owned as Jack stated.
For this to be meaningful, I think we're must advance in time. The company now has twenty participants. They're in various stages of their buy-ins, so they have differing voting power.
As I've said, this is just one person's opinion. All is open to discussion.
For a company this size, I'd see an oversight committee of about five persons, meeting about once a month to consider management's ongoing actions.
Then probably a "committee of the whole" once a year to decide strategy, and to renew (or not) senior management, perhaps on five year contracts.
Advancing further, to hundreds of participants, there would be intermediate oversight committees.
I think Bob was using 'forced' in a legal sense. Just like we are all 'forced' to not discriminate. Every system will come with its rules and regulations.
As for janitors with voting interest, I of course appreciate your point. In a smaller entity the distribution of voting control is going to be strange - especially if we only think in terms of classical organization. Instead, and this is why I proposed this scenario, consider the candy shop I described @7.1.81 (and before):
Imagine a sole-proprietorship candy maker. The 'first-hire' might be to bring on another candy maker. The subsequent 'hires' might also all be candy makers. Everyone is working the means of production to produce the product. Then we have some who focus on customer-facing, some who focus on the books, others who focus on supply chain, others who focus on equipment. All might participate in cleaning, promotions, maintenance, etc.
Is this a real problem? At least for the first few years, the founder will surely be doing the recruiting. The founder will be selecting her collaborators.
So now a small business owner - who may own a few lawnmowers and hire someone to cut grass for him - has to go through the complication of issuing shares for a private company (which most private companies have no interest in doing)? And again, many small businesses plow their profits back into the business - what happens if I don't want to issue dividends? Maybe I want to buy a bigger trailer so I can take on bigger yards. It's my company and that should be my decision.
The newcomer must buy their share, so both are now putting up the capital.
So if I put a half million in capital into my business - someone who wants to work with me has to come up with a quarter million, even if they're only making $50k per year? And if they don't, why are they entitled to share ownership? Hell, in my smaller lawn mowing example, the type of person who hires themselves out to cut grass typically can't afford to buy a single ride-on mower (or a trailer to haul it around), much less buy into a business where the owner has invested thousands.
What if I took out loans or borrowed from family or investors - will my new hire/equal owner now be equally responsible for the debt, and will they have to take a mortgage out on their house as I did on mine, or rack up their credit cards when our cash flow isn't good? Will they physically own half of the equipment I bought? What if the business ends up losing money, as so many small businesses do? Will they share the bankruptcy with me?
Both are now taking the risk.
If someone has the capital and wants to take the risk, why aren't they starting their own company? If they're not, I seriously doubt the newcomer (depending on what they're hired to do) has the acumen required to make the business decisions and determine what risk to assume, or wants to put in all the hours, or has the contacts in the industry, or whatever.
On a voluntary basis, there is nothing wrong with these ideas. But forcing it into law? That makes no sense to me. Nobody is entitled to own a business they didn't start. And the idea of splitting the ownership equally - that really screws the person who started the business.
But if I run a candy store, I'm far more likely to be the only person making the candy. There aren't that many candy makers out there. I'd specialize in that, and hire a store clerk, and maybe someone to run the books (although at first I'd probably be doing that as well). I'd be responsible for the building lease, and the bills, and the loans, and I'd be the one taking all the financial risks. Honestly, nobody who's hiring out as a shop clerk is likely to have the money to take on half of my financial risk.
You're not going to find too many skilled people who want to do janitor work as part of their job, or who are skilled at maintenance.
Of course.
I've known quite a few employees, at all levels, in a long career in industry. I have met a few who thought much too highly of themselves... but their collaborators always knew what they were truly worth.
In an employee-owned company, the employees' interest is that the company be as efficient / effective as possible. That's how they will vote.
To vote intelligently, they'll need information... but I think that's a good thing.
What if the business doesn't need collaborators, but simply employees? If I'm trying to hire someone to cut grass or sell candy, or wait tables, I'm not likely to find someone with the skills necessary to collaborate on owning and running a business - they'd be looking for much better jobs if they had those skills. You don't exactly "recruit" for lower level jobs like that. And again, those employees are not likely to have the capital to assume their share of the risks in the first place.
It seems to me that all you're really describing is the corporate process as it already exists.
Actually you cannot. There is a working counterexample in the Mondragon cooperative in Spain. Plus worker cooperatives (in many forms) have existed for decades. Politics, extortion, favoritism, corruption can (and one can confidently also state will) appear in any system. Our existing system is clearly not without these problems so your point is not well founded.
And if you wish to limit your comment strictly to council management then it seems to me you have read all sorts of complexities into such a brief description. Have you ever tried to summarize matrix management? Regardless, I sense you are not really all that interested in considering alternate approaches but rather wish to simply dismiss anything that differs from status quo.
Might be the case. Hard to tell without specifics. If your program were based on democratic principles we would need to see the details. If you think that workplace democracy involves every worker voting on every issue then you are using the most naive definition and I agree that would never work.
Yes there are. So why do you categorically dismiss all possible forms of workplace democracy? And if you do not think you are categorically dismissing then say so and I will take you at your word.
Then you two really should have a calm, honest, thoughtful conversation because he is not describing conventional practices.
You know what? Don't condescend to me. I have done nothing but try to have a calm, honest, thoughtful conversation here. Save your moralizing for someone else.
I think he is. His talk of committees and oversight and accountability and such are things that are actually required by every state's laws of incorporation. That's why I observe the similarity.
Frankly, I'd prefer if you let Bob speak for himself. You don't have a good track record at it. A while back you tried to say Bob was talking about "workplace democracy" (@7.1.41 and @7.1.45) only to have Bob respond by saying that wasn't so (@7.1.80). So please refrain from telling me what Bob means to say.
Of course, Bob didn't attack you for assuming things about his position like he did with me and Jack. That, at least, would have been fair.
I started one. I gave a lawyer a thousand dollars, and a month later it was done. No big deal.
Why not? There's no reason not to do the same.
In the beginning, the founder has the votes. When several collaborators have been recruited, they must be convinced. Is that a bad thing?
Exactly. So the newcomer's buy-in period will be long. That's a good thing.
I don't see why. Each of you handles your personal finances however you wish. Mixing personal finances and company finances is never a good idea.
This sounds very much like, "If I start a company, I want to keep it. Period." I understand the sentiment. That's precisely why I would make employee ownership a legal obligation.
Yes I can, people are uneducated and lazy and forced to vote on decisions that they are not informed on or understand.
That is just a fact. And those same people will vote for their stupid friend or relative to be in management who makes wrong decisions and it just snowball's from there until the business has to dissolve.
That is the real world....I have been working for and involved in all different types of companies for over 30 years, and the ones that succeed have strong educated management teams who are hired for their skills not voted in. And they do value there employees by understanding what skill level they have or can achieve, not by forcing them into something they are not capable of understanding.
Your ideas are nice, but not practical or sustainable.
I used your description in your post....
I normally listen to someone who has real world experience over someone who does not and only puts forth conjecture.
Have a nice day.
Katrix.
These are all personal choices to not run as a cooperative. Your preference for traditional structure does not mean that such an organization could not exist as a cooperative. You (personally) do not have to be responsible for paying bills and clearly if you are assuming the financial risk then you are not operating as a cooperative to begin with.
Small companies have workers wearing many hats. The existing cooperatives are working examples. Larger companies will naturally have more division of labor because it becomes possible to do so. And I would not ignore the ability to buy janitorial services, as an example, from a company that specializes in same. In a society replete with cooperatives it makes sense to presume the environment will be different than what we have today.
Remember that I am explaining how a tiny cooperative could evolve from one or a very small group of founders. It is fine that you would not want to run things as a cooperative but that does not mean these organizations do not work. They have been around for decades.
I use the word "collaborator" for all participants in the organization.
I see all employees as worthy of consideration. If we start with a presumption that the people we recruit are stupid... that's what we'll get.
You ignored my example of Mondragon. This is an easy example to look up for yourself. It is the largest cooperative in the world. There are countless others, but I gave you this one because it is obvious.
So, no you cannot simply declare these structure will fail because the counter examples prove you wrong.
Not the kind of people one would seek to form a cooperative. You seem to be arguing that taking a traditional company and opening up things for direct democracy would likely fail. Yes, I agree. But we were not discussing the extemporaneous conversion of a traditional business to a workplace democracy.
These are not my ideas. I am simply explaining concepts. Second, again, incredulity is not an argument. The fact that you have worked in a traditional setting for decades does not mean that alternative structures cannot work. Importantly, since these alternative structures have existed in the real world for longer than you have been a professional (and even longer than my tenure), your argument is countered by reality.
Aside from the minor detail that the only shareholders are employees...
I clearly stated that TiG and I understand each other's ideas. We may disagree on details, but not on the essential.
I did not state universal direct democracy. Indeed, my example of council management is clearly not universal direct democracy. Did you miss that?
You presume I lack real world experience in founding, running and selling successful businesses? Why? Because I dare explain an alternate system?
Indeed, the essential ideas are not ours. They are, for the most part, well established ideas in practice worldwide.
Damn!
Unmasked!
I was hoping to pass for a genius original thinker...
Did I say you did? Why make shit up?
I commented on your words, nothing else.
Do you?
You try to speak as if you want an open discussion but as soon as someone disagrees with your ideas you get defensive and go off on some tagent.
Not playing your games, toodles
That was not condescension. Ease up on that hair trigger.
I think you are reading what you want to read. Bob's scenario was, as he noted, based on the concept of the shared ownership of the entity. Ask him. When someone talks about all workers sharing equity and control for an enterprise, what do you think that concept is? Workplace democracy / employee ownership. Again, ask him if his scenario is not an illustration of a form of workplace democracy.
I say it is. Don't tell me how to talk to other people and I don't need you to tell me to be honest, etc. How about just mind your own business. Will that do?
No I'm reading the words as written. You wrote:
and then you wrote:
And then Bob wrote:
It's pretty simple. If anyone was reading what they wanted to read, it looks like it was you. So, like I said, let Bob speak for Bob and let me speak for me. Good day.
How do you mean? Do you mean any shareholder should have to physically do something day-to-day?
I was not. I misread your intent. Sorry.
Plenty of experience in same.
... you use it as an excuse to cry foul and leave.
Shareholders are employees and employees are shareholders. Same people. Can't be one without being the other.
Hair trigger victim claim. This was such a simple, calm interaction ...
... and you turn it a claim of condescension.
I am not telling you to be honest, I suggested that you and Bob have a 'calm, honest, thoughtful conversation'.
You left off the rest of his sentence:
My comment was workplace democracy is what Bob had in mind (the underlying concept). Maybe Bob will make a clearer comment on this. I would be quite surprised if Bob, who advocates workplace democracy, would be speaking of shared ownership and control in an enterprise and not be thinking in terms of workplace democracy.
Bob, will you clear this up?
TiG @7.1.136
Was I wrong to view your discussion as workplace democracy? If I was wrong and your scenario could not be considered workplace democracy then what precisely were you discussing?
I don't see how either can exist without the other. IMHO, shared ownership and workplace democracy are inextricably entwined.
I was talking about ownership. But that's just at that particular moment. As I just said, I think the two - employee ownership and workplace democracy - are inextricably entwined. One implies the other.
I do not see how one can be without the other either but Tacos! leaped on your ...
... sentence with both feet in full GOTCHA mode.
So to be clear, you are talking about ownership exclusively by the employees (no outside ownership), every employee is an owner, every employee has voting shares but compensation naturally differs due to different skills and applicability.
That is the foundation of workplace democracy, but the concept of workplace democracy of course goes into greater details (e.g. tiered voting structure) to make this a workable system. I presume that is why you used 'particularly'.
[deleted]
What's the matter, Bob, haven't thought past the "wealth-redistribution and pouting" stage of your plan?
That's possibly the most unrealistically naive thing I've seen in the past month.
Which your plan would prohibit her from making. By force.
But you're talking about forcing businesses to run that way.
Where do you find 'my plan'? Where do you find 'force'?
Did you mean to respond to someone else? If not, then deliver a quote because I have no idea where you are getting this based on what I have written.
Sorry, my mistake.
You really don't get it. I have tried to be patient. At this point it's like harassment. Your attempts to TiGSplain Bob's thoughts to me are unhelpful, unwelcome, and offensive. It's a free country and all, so do as you will, but any further attempts at this nonsense from you will not be met with a positive response. You'd think that would be clear to you by now. You repeatedly accusing me of having a "hair trigger" only makes it worse. Your whole focus is on me, and not on the topic. Drop it!
Well Tacos! you tried to transform a perfectly calm, suggestion from me that you and Bob could and should have an honest thoughtful discussion into condescension. I calmly told you that I was not being condescending in any way and was quite serious. You returned insisting that I was — apparently you think you know my intent better than I do. Then you complain that I weighed in on a public discussion and expressed my opinion on Bob's position. And then tried to cobble together a case that I did not know what I was talking about.
I responded to your allegations and you now complain that my self-defense is somehow harassing you.
Here is how you fix this. Don't come after me with inflated allegations and I will not have any need to defend against them; then you will not feel 'harassed' by my defending myself.
Not a problem. Thanks.
Exactly.
Exactly.
The difference between your perception and Tacos's is that you make an effort to understand, while Tacos - and many others - is usually in "full GOTCHA mode". I have to wonder if there are many NT members who really want to understand.
Addendum:
Perhaps it would be useful to recall to everyone that "understand" does not mean "agree".
TiG and I understand each other on religion... but we most certainly do not agree.
It should be possible to discuss "alternate" possible economic realities without having to be a disciple, and even less an apostle...
This point should be obvious. However many leftists disagree.
Excellent question.
The non-wealthy should be the exclusive focus of any "equality" program. They're not poor because they want to be.
Not obvious at all.
Hence the phrase "should be". Alas, some people are incapable of getting their minds around even that rudimentary concept.
But then there are people who claim not to realize smoking is killing them or that cheeseburgers make them fat. I guess I should lower my expectations of the ability of the average American to understand basic finances.
It's not obvious because it's wrong.
Why not explain why it is wrong (to be clear)?
The problem is economic leverage. It has an obvious clustering effect as evidenced by the concentration of enormous wealth. Control increases due to leverage producing an increased level of leverage. The problem of monopolies has an analogous problem in aristocracy.
Leverage, like many dynamics, is good up to a point. Entrepreneurial endeavors thrive on leverage - the ability of a strong leader(s) to see a vision to fruition. This is at the heart of the good sides of capitalism. But when critical mass is achieved and wealth almost effortless continues as a result of leverage alone, the dial turns from net positive to net negative (in societal terms).
Because I'm very tired of trying to converse with people who vociferously and peremptorily announce... bullshit.
I typically respond to the audience (and not necessarily to the person). So even if the person is expected to not engage 'nicely' my point is made. (This is not always true, however. There are some people I will quickly ignore because they only intend to generate snark or other nonsense and replying perpetuates their juvenile game.)
Another empty declaration. I would invite you to explain how Walton wealth takes away from others, but I doubt very seriously you can.
The irony.
Tell us all again how property is theft.
[Removed]
The wealthy do cheat someone to increase their wealth, that's the point. Dr. Reich is pointing out that wealth is increased with financial investments. Financial investments grow by taking a share of economic output without contributing to generating that economic output.
The Walmart heirs are owners, not workers. The Walmart heirs are not required to contribute anything towards generating economic output. Walmart cannot generate economic output without labor but labor wages compete with noncontributing owners for a share of economic output generated by the business.
That isn't always true....that is how capital for growth is generated and used for a business to produce more.
I bet Sam Walton took his assets (wealth) and reinvested in his company, borrowed money from an investor. Companies don't grow or produce without capital.
A business generates its own capital. Otherwise the business could not attract investors. For a new startup the time required to accumulate capital can be quite long. What investments do is buy time; the business does not need to wait to accumulate capital.
A business can sell stock to raise capital. But the only time the business receives capital is when the stock is issued. After that the stock becomes an operating cost. Issuing stock also transforms the business model toward protecting share value (which is an additional cost) rather than internal operating requirements. Running a business by a committee of shareholders transforms the business operation into something more like government; business decisions become more political.
Yes, but not enough for growth, that is where investors are needed.
Who do you think the investors are? Could be many sources, could be private or public. But it comes from wealth.
Wealth contributes to the growth of a service or production of goods.
A business generating capital IS growth. Investments buy time but not growth. The idea behind investments is they allow a business to grow faster.
It doesn't matter, either way the investment (wealth, either internal or external) is contributing.
The investment is the contribution.
Let's say I have a taco truck, but I want to open a restaurant that will generate more revenue. But I have a problem. I can't afford the initial costs to get into a building. I could work for years and save whatever extra money I can hold onto while property values increase, or I could get an investor to give me money for it right now.
Unless he is in the charity business, he is going to want his money back someday and probably with interest. We could just negotiate a loan on those terms or I could promise him a share of my profits. I do the work and he gives me the means to turn that work into more profit than I ever could have made with my taco truck. We both win. This is what banks do and it's what private investors do. No one is cheated.
Why would you want to take that opportunity from either of us? How does it hurt you or anyone else?
Pretty good business model if you can set up your descendants like this. Why do you care how much money someone else has? You are free to make money, too. Open up your own store.
So, Sam Walmart or his heirs could shut down the stores, liquidate all assets and just spend their money on something - say land, or clothes, expensive food, or internet porn. Whatever. They can do it until they're broke, if it makes you happy. Thousands of Walmart employees will lose their jobs. How is any of that a good thing?
It is the constraints of government that can hold individuals back not the wealthy.
That is totally false. Completely divorced from reality.
Our Marxist fascist tax system is designed to manipulate and redistribute wealth from the rich to those who didn’t earn it.
Marx would love the American tax system
Some of the vocabulary you use is downright silly.
More context. Read the whole article. Its balanced.
Nonsense, Hitler and Goebbels as I quoted we’re proud to call themselves Socialists and theirs and Mussolini’s actions demonstrated that fact
Fascism and Nazism parallels to Democrats welfare State ideology
History is a great teacher for those who are willing to study it. A look back at the welfare state policies of Mussolini and Hitler, they are virtually identical to those of the modern Democratic Party
Social Welfarism and Public Works
Both National Socialist Germany and Fascist Italy were welfare states that spent heavily on public works. A former school teacher, Mussolini’s spending on the public sector, schools and infrastructure was considered extravagant. Mussolini “instituted a programme of public works hitherto unrivalled in modern Europe. Bridges, canals and roads were built, hospitals and schools, railway stations and orphanages; swamps were drained and land reclaimed, forests were planted and universities were endowed.” [255] As for the scope and spending on social welfare programs, Italian fascism “compared favorably with the more advanced European nations and in some respect was more progressive.” [256] When New York city politician Grover Aloysius Whalen asked Mussolini about the meaning behind Italian Fascism in 1939, the reply was: “It is like your New Deal!” [257]
By 1925 the Fascist government had “embarked upon an elaborate program” that included food supplementary assistance, infant care, maternity assistance, general healthcare, wage supplements, paid vacations, unemployment benefits, illness insurance, occupational disease insurance, general family assistance, public housing, and old age and disability insurance. [258] As for public works, “the Mussolini’s administration “devoted 400 million lire of public monies” for school construction between 1922 and 1942, compared to only 60 million lire between 1862 and 1922. [259]
Hitler and the German National Socialist spent large amounts of state revenues for a comprehensive social welfare system to combat the ill effects of the Great Depression, promising repeatedly throughout his regime the “creation of a socially just state.” [260] In 1933, Hitler ordered the National Socialist People's Welfare (NSV) chairman Erich Hilgenfeldt to “see to the disbanding of all private welfare institutions,” in an effort to socially engineer society by selecting who was to receive social benefits. [261] Under this state-operated welfare structure, Nazi administrators were able to mount an effort towards the “cleansing of their cities of ‘asocials.’” [262] Nonetheless, the NSV instituted expansive programs to address the socio-economic inequalities among those deemed to be German citizens. Joseph Goebbels remarked about the merits of Hitler’s welfare state in a 1944 editorial “Our Socialism,” where he professed: “We and we alone [the Nazis] have the best social welfare measures. Everything is done for the nation.” [263]
Mussolini, fascism is anti capitalism
Fascism has had complicated relations regarding capitalism, which changed over time and differed between Fascist states. Fascists commonly have sought to eliminate the autonomy of large-scale capitalism to the state. [191] Fascists support the state having control over the economy, although they support the existence of private property . [192] When fascists have criticized capitalism, they have focused their attacks on " finance capitalism ", the international nature of banks and the stock exchange , and its cosmopolitan bourgeois character. [193] Under fascism, the profit motive continues to be the primary motivation of contributors to the economy. [192] That policy abruptly changed in Italy by 1934 when Mussolini “reiterated that capitalism, as an economic system, was no longer viable.” [194] Mussolini went so far as to proclaim that the economy of Fascist Italy was to be “based not on individual profit but on collective interest.” [195] Originally, Fascists theoreticians supported limited private property, individual initiative and market economy because it was, as expounded by Sergio Panunzio , a major theoretician of Italian Fascism, “the only economic system that allowed a socialism for the entire nation,” since it was believed to encourage “productionism.” [196] Most Fascist theoreticians and revolutionary syndicalists followed Karl Marx 's admonition that a nation required “full maturation of capitalism as the precondition for socialist realization.” [197] Fascist intellectuals were determined to foster economic development in order for a syndicalist economy to “attain its productive maximum” that was identified as crucial to “socialist revolution.” [198] Italian Fascism's position towards capitalism adjusted over time; the Italian Fascist movement in 1919 was radical and anti-capitalist, where he continued to campaign for “nationalization of land” and to have “workers’ participation in the running of factories”, [199] but became more moderate in the 1920s when it sought to consolidate power, and then grew more radical again during the 1930s under its entrenchment of power, and by 1940 again emphasized anti-capitalism.
Mussolini praised the historic developments of " heroic capitalism " - what Mussolini considered the first stage of capitalism, which he found had provided useful economic developments, but he claimed that capitalism had deteriorated, and criticized the contemporary stage of capitalism that he termed " supercapitalism ". He argued,
I do not intend to defend capitalism or capitalists. They, like everything human, have their defects. I only say their possibilities of usefulness are not ended. Capitalism has borne the monstrous burden of the war and today still has the strength to shoulder the burdens of peace. ... It is not simply and solely an accumulation of wealth, it is an elaboration, a selection, a co-ordination of values which is the work of centuries. ... Many think, and I myself am one of them, that capitalism is scarcely at the beginning of its story. [200]
Years later in a November 14, 1933 speech, Mussolini decidedly rebuked economic liberalism and laissez-faire . In the United States, the Hearst Press printed his speech under the headline: “Mussolini Abolishes the Capitalist System.” [201] Mussolini declared:
To-day we can affirm that the capitalistic method of production is out of date. So is the doctrine of laissez-faire, the theoretical basis of capitalism… To-day we are taking a new and decisive step in the path of revolution. A revolution, in order to be great, must be a social revolution. [202]
To Mussolini, the capitalism of his time had degenerated from original capitalism, which he called dynamic or heroic capitalism (1830–1870) to static capitalism (1870–1914) and then finally to decadent capitalism or supercapitalism, which began in 1914. [203] Mussolini, in 1933 amid the Great Depression , announced that modern supercapitalism was a failed economic system that was the result of the long-term degeneration of capitalism. [204][205] Mussolini denounced supercapitalism for causing the "standardization of humankind" and for causing excessive consumption. [206] Fascists argued that supercapitalism "would ultimately decay and open the way for a Marxist revolution as labor-capital relations broke down. [207]
Mussolini claimed that supercapitalism resulted in the collapse of the capitalist system in the Great Depression . [208] Mussolini claimed that fascism would preserve those elements of capitalism that were deemed beneficial, such as private enterprise provided that it would be supervised by the state in fascist economics. [209] However Mussolini claimed that fascism explicitly rejected the typical capitalist elements of economic individualism and laissez-faire . [209] Furthermore, Italian Fascism also acknowledged socialist influences, such as revolutionary syndicalism . [210] Mussolini claimed that in supercapitalism, "[it] is then that a capitalist enterprise, when difficulties arise, throws itself like a dead weight into the state's arms. It is then that state intervention begins and becomes more necessary. It is then that those who once ignored the state now seek it out anxiously." [211] Due to the inability of businesses to operate properly when facing economic difficulties, Mussolini claimed that this proved that state intervention into the economy was necessary to stabilize the economy. [211]
Not long after the creation of the Institute of Industrial Reconstruction, Mussolini boasted in a 1934 speech to his Chamber of Deputies that “Three-fourths of Italian economy, industrial and agricultural, is in the hands of the state." [159][160] As Italy continued to nationalization its economy, the IRI “became the owner not only of the three most important Italian banks, which were clearly too big to fail, but also of the lion’s share of the Italian industries.” [161]
During this period, Mussolini identified his economic policies with “state capitalism” and “state socialism,” which later was described as “economic dirigisme,” an economic system where the state has the power to direct economic production and allocation of resources. [212] Earlier in 1922, Lenin employed the same phrase to favorably characterize “state capitalism” as an appropriate economic system for Soviet Russia that would encompass “a free market and capitalism, both subject to state control," where, according to Lenin, every state-owned enterprises had to operated on a "profit basis." [213]
By 1939, Fascist Italy attained the highest rate of state–ownership of an economy in the world other than the Soviet Union, [162] where the Italian state “controlled over four-fifths of Italy’s shipping and shipbuilding, three-quarters of its pig iron production and almost half that of steel.” [163]
Pure nonsense.
It's all marxist this and socialist that and communist this and blah, blah, blah, blah, blah, that's all you'll get from this 'pastor'
I keep trying, but so far I have been unable to make any sense of it...
Don't strain your brain on him - there's never any sense to be made of any of his rants.
It's called revisionist history. Like the conservative attempts to redefine 'nationalism'. Hitler used socialism to manipulate Germans and get them to embrace Hitler and shore up his support for Nazism. You are totally leaving out the racism and authoritarianism.
The three wealthiest counties in the US surround Washington DC, I suggest they start taxing themselves at 70%. How would that fly for the money grabbing thieves?
Simple redistribution of wealth does not work for many reasons. The most obvious is that the redistributed wealth will controlled by the uber-irresponsible politicians who have saddled future generations with a $22T and counting national debt. Philosophically, the principle of lowering the high is wrong. What we need is an evolutionary path whereby the low have (and are encouraged to pursue) opportunities to improve their own situations. This is what has happened historically. The feudal system gave way to mercantilism which gave way to capitalism. The progression enabled the masses to pursue their ambitions, not to simply give them things.
I see no quick fix. The unintended consequences of going after the ultra-rich is for them to take counter actions. And they have many at their disposal. Aristocracy has historically ruled nations and the USA is no different. Even if such a measure passed, the existing tax laws provide plenty of mechanisms for the ultra rich to largely bypass the effects. Further, pursuing this to close 'loopholes' brings the major downside of encouraging the ultra-rich to tap more of the global economy rather than focus on our national economy. Many more problems with this approach, ...
Let's not invert the situation. It's the ultra-rich who have been acting already. Until the 1970s, revenue growth for all quintiles was roughly parallel to national growth. Since then, the 0-20 and 20-40 quintiles have flatlined. 40-60 and 60-80 have maintained some growth, 80-100 have done well. The top 1% has skyrocketed.
"Going after the rich" is in fact self-defense.
Phrase it any way you wish, Bob. I would have preferred you address the point I made rather than quibble about word choice.
I wasn't quibbling. I felt that you were presenting today's absolute dominance of the ultra-rich to be the natural state of our society, and taxing the ultra-rich to be an anomaly.
I doubt that you meant that, but it is what I read in your post. Correcting that impression is not quibbling.
Except you did not address the actual content of my post. (Which is the point I just made.)
Unfortunately dominance by aristocracy is historical reality. Dominance (and abuse) then overthrow and then new aristocracy forms to repeat the cycle of dominance and abuse.
I addressed what appeared to me to be the most important aspect of your post.
I won't do it again.
So is wife beating. I really don't think you have much to stand on if your advice is to say "thank you sir may I have another".
Capitalism exploits the workers. Yet, we mostly all agree capitalism also creates material progress. How to deal with this dilemma? Tax the rich. There's nothing wrong with it, at all. There is no God given right to exploit people. The society has the right to take rectifying measures.
I don't think your last few comments have been your finest hour.
From where do you get that simplistic, cynical view? I stated historical fact at the macro societal level to illustrate that this is not a problem that is simply addressed by legislation.
Of course it does; and it needs to because history shows this ends badly. My post suggested that the rectifying measures might not accomplish what one would expect.
No.
If you think so, you have not understood us.