Forum Post: Here's a novel idea for those of you who dislike the "evil rich and wealthy"
Posted 12 years ago on Jan. 9, 2012, 12:25 a.m. EST by SteveKJR
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A lot of you complain about companies who are the 1% and have most of the money. You complain that they are "screwing the working man".
Well I just came up with a fix.
Start a company where everyone who comes to work for that company has to invest in it.
Everyone can vote on what everyone makes so that everyone makes the same amount. Everyone can have a vote on how the business is being run, how much product can be made, how much profit can be made.
Then, at the end of the year, the profits can be divided equally among everyone who workes there and everyone will be happy.
It's not hard to get a business license, just about anyone can do that. I think this is a novel idea.
I do believe there are some companies that are already doing this.
What do you think?
In my post "The Rise of the Machines" ( http://occupywallst.org/forum/the-rise-of-the-machines/ ), I mention that mandatory Employee Stock Ownership may be one way to make sure the workers get a cut from the productivity gains generated by computers and robots.
I'm pretty sure we can't make the employee stock the only stock because we probably couldn't raise enough capital that way, but we could make it so their stock is the only voting stock.
This idea is worth exploring.
There was a time when companies organized along these lines were quite common ... Mutual Insurance Companies were similar, except it was the customer than became the investor.
Investor owned everything became more and more the only game in town during the 1960s and 1970s and by the time Reagan arrived, the only stakeholder than mattered was the investor.
In order to be of much significance, any idea has to be scaleable in a practical way. My suggestion is that the existing legal structure can work, but the investors should be seeing accounting and reporting about not only profit, but something I call 'valueadd' ... this is the benefit that society has from company activity. I call the system TrueValueMetrics
Yeah there are several companies which operate on the basis that everyone involved has a similar percentage stake in the company... I believe at least one was featured in Michael Moore's "Capitalism" movie...
But this becomes increasingly difficult to implement as company sizes grow... after a point, the contributions of some will be significantly different from others... would they accept equal compensation?
Out of college I was part of a startup with my friends... for a brief period I was owner of 25% of a whole company, but the guy with the real plan was given 50%... and this was only with 3 guys in the mix... and it was an amicable agreement...
With more people.. you will have more egos... and there will be some greed... tough to make things work... could be done... and I would love to see it happen on a large scale... but yeah... difficult....
What you're talking about is a co-op that is managed by its employees, and honestly I feel like that's a great idea. I am 100% behind setting up an ESOP model for most if not all corporations large enough to go public, and in fact I would set up a distinction like this: Type I stock would entitle the holder both to voting rights in how the company is run and to dividends based on how well the company does or does not do. It would be issued to employees upon hiring, be non-transferable, and be cashed out on retirement. This would be issued on percentage of the company's net worth that would float a bit but stay pretty close to 20 percent. The other 80 percent would be issued in Type II stock, which would entitle the holder to dividends but NOT to any voice in how the company is or is not run. Type II stock would be freely tradeable on exchanges the way all current stock is now.
That distinction would basically allow everyone to win; it would keep corporations firmly democratic and very firmly tied to their employee bases and their communities simply because the people who make policy decisions are also in turn going to have to bear the brunt of any repercussions of those decisions. It also puts an end to the "we want to be even more profitable than usual so your job is moving to China" crap because nobody with any brains at all would deliberately destroy his or her own career, and it means that it will be much easier to balance the needs of the company with the needs of the employees as far as wages and benefits are concerned; employees won't push for $100 per hour and a monthly trip to Cancun (they never did to begin with, but this eliminates any possibility of that happening) because that will crash the company and put everyone out of work, while management won't push for tiny salaries, no benefits, and poor working conditions because the management is comprised of people who would have to live on those salaries and work in those conditions.
Now China is polluting our air on the west coast because of their greed.
I have a better idea for those who dislike the wealthy : work hard and smart, start your own firm and become wealthy yourself. But that is easier said than done. After all, you whiners wouldn't want to put in 14-18 hrs a day that most entrepreneurs (like Gates, Jobs etc) put in their business. So I guess it would be easier for you to whine and be jealous.
Some people may be jealous of the wealthy but I would guess most are not. If this person you are speaking of is spending twelve of those 18 hours in the day figuring out how to rip off the consumer and make slaves out of a portion of the people working for him/her, then, Houston we have a problem. I own my business and work very long hours and know that the OWS are right.
I don't know what business you have but if you are accusing all entrepreneurs of unethical conduct, I doubt your business is a very successful one. Successful business are not built by ripping of customers, it built by satisfying their needs. May be that you rip off your customers but any entrepreneurs looking at building a sustainable business wouldn't. As for making people slaves, last time I checked every employee can leave their company when they want. More importantly, smart young grads aspire to be in such firms as Microsoft, Facebook, Apple or even Goldman Sachs, McKinsey etc.
All I see is a cookie cutter here.
Well most companies offer ESOP to their employees above a certain grade. This is nothing new. But then why don't companies offer ESOP to each and every employee? Well ESOP are used as a reward for loyalty to the company. Most junior level employees switch companies frequently, so awarding ESOP to them does not serve much of a purpose. Besides, every time one of those employees quit you have to go through the whole legal procedure of revoking the ESOPs; and for most firms where churn rate in the lower sections is as high as 10% that comes out to be very costly.
And btw, Starbucks does this.