Forum Post: ESOPs: employee stock ownership programs
Posted 12 years ago on March 20, 2012, 6:53 a.m. EST by aflockofdoofi
(-18)
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Why doesnt OWS focus on employees buying controlling interest in most or all large corporations?
once the employees own everything, Citizens United goes away, wage slavery goes away, minimum wage goes away, single payer health care becomes viable.
This is an interesting idea, but the boards of these companies will hold the controlling stock interest in the corporation. The other problem is that many stocks are not for sale to retail investors (that would be us).
I'm not sure how you intend to do this.
There's thousands of employee owned companies in the United States today, some of them multi-billion dollar enterprises. Some are traded, some are closely held, etc. (just like conventional companies).
I had an idea (that I discussed in a previous post) for a government loan program to help workers establish employee owned enterprises. 42,0000 factories have closed since 2000, about 5.5 million production workers lost their jobs in the process. Many of these factories are abandoned, sitting idle, waiting to be put to use.
I do also think that we'd need a value added tax to sustain manufacturing in this country, which is permissible under WTO rules.
Like a co-opt? Ok. A VAT would make it easier to collect taxes on mulitnationals, and is a good idea, but I'm not sure it would bring back jobs. We still have a depression to muddle through and its global. The factories are closed because of lack of demand. The Dry Baltic Index has been in the dumpster for years.
It's not just lack of demand. We've completely lost the capability to manufacture many goods in the United States, and these are goods on the store shelves in Walmart (that people still buy in large quantities).
A properly structured VAT could help domestic manufacturing. First, it exempts exports from the tax. Secondly, other exemptions are also possible, such as exemptions for "cottage industries" (used by some of our trading partners). We could even make a VAT progressive, although I think it would be simpler and more efficient if we simply counterbalanced a VAT with reductions in income taxes (for lower and middle income workers).
But, we need more to revitalize our manufacturing sector, and we need a more stable system in place. This is why I endorse the idea of a government loan program to promote employee owned companies.
There are obviously cases where production was lost due to obsolescence, and I'm not suggesting we try to resurrect obsolete industries. Where demand still exists, and we lost production capability because of low priced imports, we should do something about it. My contention is that the employee owned model offers many advantages over conventional companies when it comes to production of goods that have become like commodities.
If quarterly profits are removed as the sole factor guiding decision making, it would promote more long term economic stability. If we favored smaller companies, versus large multinationals, it would promote more economic stability. Put it this way, Adam Smith would have never endorsed the sort of distorted trading system we have in place today. It's not that Adam Smith should be our primary economic guru for all time, but I also question the theories of modern trade economists (since, by just looking at conditions on the ground, it's obvious that these policies are flawed).
It's not even that I find the focus on quarterly profits completely terrible, I don't, but the dogma associated with quarterly profits, or even our contemporary views toward trade, is certainly problematic (and really amounts to self-imposed limitations to problem solving).
Sometimes our inductive reasoning isn't the best tool for understanding reality, because in many cases anecdotal experience does not tell the whole story. But in some cases it is a valid tool (we just need to understand how to make the proper distinctions). We know one Walmart looks very similar to other Walmart's. We know they largely sell the same products nationwide. We also know they have a very advanced inventory system. Therefore, we know if a product is on the store shelves in Walmart, there's most likely a robust demand for that product. We know that an economic system primarily based on debt financed consumer demand, is unsustainable.
My contention is that we need to refocus on production, and do it in a sustainable way. We shouldn't be afraid of new or novel ideas, and we shouldn't be totally convinced that the "market" will provide superior solutions in all circumstances (because that's clearly not true). As it stands now the deck is stacked against smaller firms. Really, we have a socialist system, it just favors large multinational corporations.
Exactly. Buy the companies or start your own. With such excellent ideas about how to run a business, surely it would succeed beyond anyone's dreams. Obviously, the model advocated by OWS would be a raging success. LOL.
Ask the employees of Enron how that worked out for them.
Investing 101 has got to include a basic understanding of risk. When your protfolio and your job are dependent upon the success of one company, it is a very risky proposition.