The American Corporation Is in Crisis(bostonreview.net)
bostonreview.net
The American Corporation Is in Crisis
https://bostonreview.net/forum/lenore-palladino-american-corporation-crisis%E2%80%94lets-rethink-it
79 comments
> For pirates, the solution was multifaceted, but the most critical components were: * Profit sharing - The riches captured by a pirate vessel were split amongst the pirates in a remarkably egalitarian model. * Democracy - The Captain and Quartermaster of a pirate ship were elected democratically by the crew.
> The result was pirate ships were able to outfox the established navies of the time and manage ships with crews upwards of 100 all without the support of established judicial systems.
This is fascinating to me. Do you happen to have any references or further reading you're willing to share?
> The result was pirate ships were able to outfox the established navies of the time and manage ships with crews upwards of 100 all without the support of established judicial systems.
This is fascinating to me. Do you happen to have any references or further reading you're willing to share?
Definitely, I highly recommend Peter Leeson's book on the subject, The Invisible Hook:
https://www.amazon.com/Invisible-Hook-Hidden-Economics-Pirat...
https://www.amazon.com/Invisible-Hook-Hidden-Economics-Pirat...
Article is long but well written and argued. I found this paragraph about a proposal in UK especially interesting:
"The Labour Party’s plan is detailed. It ensures that investors are not injured by having their share value diluted because it institutes a transition process: every year, employees gain a 1 percent ownership stake, up to a cap of 10 percent. Once funds are in a trust, then the shares are not available to be resold. This is crucial: the stakes are not a private, freely transferable wealth asset, and since employees don’t purchase stakes, they can’t sell them when they leave employment. Rather, by becoming an employee of the corporation, you receive an ownership stake in the employee collective trust—a stake that remains in the trust if you move to a different job. So long as you are an employee, though, that stake grants you governance rights and the right to receive a share of the profits."
"The Labour Party’s plan is detailed. It ensures that investors are not injured by having their share value diluted because it institutes a transition process: every year, employees gain a 1 percent ownership stake, up to a cap of 10 percent. Once funds are in a trust, then the shares are not available to be resold. This is crucial: the stakes are not a private, freely transferable wealth asset, and since employees don’t purchase stakes, they can’t sell them when they leave employment. Rather, by becoming an employee of the corporation, you receive an ownership stake in the employee collective trust—a stake that remains in the trust if you move to a different job. So long as you are an employee, though, that stake grants you governance rights and the right to receive a share of the profits."
It it amazing that people take the UK Labour Party seriously.
Their policy ideas are very unusual, they often make no economic sense (even internally), they consult no-one outside trade unions and their hard left sect grouping within the Party (Momentum), they use no research or any evidence to make policy proposals...it is extraordinary.
With this idea O'Donnell literally announced it, and then tried to fill in the details later (iirc, this came out months ago, and it was a total mess, it made no sense...and they have been trying to polish it ever since). For a modern political party (they aren't modern, most of their ideas are from the 70s), this is unusual.
The sum total of their policies involve either taking stuff from other people or redistributing power to their party. One other gem of theirs was moving the BoE back under govt control, printing £100bn, and then appointing their allies to spend it...I am yet to come across anyone who takes their ideas seriously (it isn't only this, the guy responsible for this policy has also said he is going to "lynch" people...srs).
Increasing the level of knowledge amongst voters is really critical. Economists and, in fact, most of the people in the Parliamentary Labour Party do not take these policies seriously. They aren't serious. Voters in the UK really deserve better.
Their policy ideas are very unusual, they often make no economic sense (even internally), they consult no-one outside trade unions and their hard left sect grouping within the Party (Momentum), they use no research or any evidence to make policy proposals...it is extraordinary.
With this idea O'Donnell literally announced it, and then tried to fill in the details later (iirc, this came out months ago, and it was a total mess, it made no sense...and they have been trying to polish it ever since). For a modern political party (they aren't modern, most of their ideas are from the 70s), this is unusual.
The sum total of their policies involve either taking stuff from other people or redistributing power to their party. One other gem of theirs was moving the BoE back under govt control, printing £100bn, and then appointing their allies to spend it...I am yet to come across anyone who takes their ideas seriously (it isn't only this, the guy responsible for this policy has also said he is going to "lynch" people...srs).
Increasing the level of knowledge amongst voters is really critical. Economists and, in fact, most of the people in the Parliamentary Labour Party do not take these policies seriously. They aren't serious. Voters in the UK really deserve better.
I wonder how that would work. Suppose the UK generates a unicorn with a billion pounds of profit per year. Suppose that unicorn employs 10k employees. Presumably, everyone gets an equal stake in the employee share. So each employee is entitled to
Of course, that's only if the company offers a dividend. I wonder how buybacks are modeled in this case? Since the employee share isn't marketable, the employee doesn't derive any immediate benefit from a buy-back. I guess you'd have to increase the employee share beyond the 10% limit at that point. In theory, the company could over time buy back all the non-employee shares, then it would be employee-owned in its entirety. And if the company offers more shares? Do the employees get diluted? I guess not. That seems weird too.
1B pounds * 1/10 * 1/10000 = 10k pounds
Of course, that's only if the company offers a dividend. I wonder how buybacks are modeled in this case? Since the employee share isn't marketable, the employee doesn't derive any immediate benefit from a buy-back. I guess you'd have to increase the employee share beyond the 10% limit at that point. In theory, the company could over time buy back all the non-employee shares, then it would be employee-owned in its entirety. And if the company offers more shares? Do the employees get diluted? I guess not. That seems weird too.
> the company would just pay reduced wages on the order of the amount of profit sharing, since it would not need to pay more to attract the requisite talent
Not necessarily true. Much of that talent might have joined precisely on the hope of receiving above-market compensation if the business did well.
Not necessarily true. Much of that talent might have joined precisely on the hope of receiving above-market compensation if the business did well.
> In September 2018 the UK Labour Party proposed a policy for “Inclusive Ownership Funds,” which would require corporations with over 250 employees to ensure that employees receive dividends.
But most professional employees get an 'ownership stake' (shares) in the company as part of their compensation anyway.
But most professional employees get an 'ownership stake' (shares) in the company as part of their compensation anyway.
The shares I and my peers receive for employment add up to ~0.3% of my employer's outstanding shares/year.
In 30 years, that might pool into ~10%. However, there is no mechanism for me, and my fellow coworkers to turn those shares into any kind of power over the board.
Me personally controlling a tiny fraction of a percent of voting shares does not make my interests align, in any meaningful way with the board. It also means that I have no ability to influence the board to consider my interests.
I need to act collectively, with like-interested co-workers, to have any influence. However, there is way too much friction for me, and like-minded coworkers to meaningfully undertake any collective actions.
In fact, this is understood so well by my employer, that I, and my peers receive non-voting shares as my compensation. I'd never be able to put the voting power to use, anyways, and neither will anyone else who has to gasp - work for a living.
In 30 years, that might pool into ~10%. However, there is no mechanism for me, and my fellow coworkers to turn those shares into any kind of power over the board.
Me personally controlling a tiny fraction of a percent of voting shares does not make my interests align, in any meaningful way with the board. It also means that I have no ability to influence the board to consider my interests.
I need to act collectively, with like-interested co-workers, to have any influence. However, there is way too much friction for me, and like-minded coworkers to meaningfully undertake any collective actions.
In fact, this is understood so well by my employer, that I, and my peers receive non-voting shares as my compensation. I'd never be able to put the voting power to use, anyways, and neither will anyone else who has to gasp - work for a living.
Really?
Most - greatest in amount or degree i.e. greater than 50%
Professional - engaged in a specified activity as one's main paid occupation rather than as an amateur.
Were you being facetious, or do you honestly believe that most people in the world receive shares as compensation in their full time jobs?
Neither I, nor anyone I know, has ever received shares as part of an employment contract.
Most - greatest in amount or degree i.e. greater than 50%
Professional - engaged in a specified activity as one's main paid occupation rather than as an amateur.
Were you being facetious, or do you honestly believe that most people in the world receive shares as compensation in their full time jobs?
Neither I, nor anyone I know, has ever received shares as part of an employment contract.
That's not what 'professional' means in this context, and I'm sure you know that.
https://en.wiktionary.org/wiki/professional_class
Most public-sector jobs for university educated people include shares of some form or another for employees. Some times it's a very large proportion of the compensation, or even essentially all of it, for some management.
https://en.wiktionary.org/wiki/professional_class
Most public-sector jobs for university educated people include shares of some form or another for employees. Some times it's a very large proportion of the compensation, or even essentially all of it, for some management.
Most? I have been working for almost 17 years and have only had shares of any kind as part of my compensation for the past 15 months. I have yet to actually get any of those shares as I switched companies in the middle of that period, so I have literally never, to date, received shares as compensation in my career.
My wife has never received, and likely will never receive, shares as part of her compensation considering all of her experience is with non-profits.
Also, I suspect you meant "private-sector" here, not "public-sector" (i.e., government work).
My wife has never received, and likely will never receive, shares as part of her compensation considering all of her experience is with non-profits.
Also, I suspect you meant "private-sector" here, not "public-sector" (i.e., government work).
But the Labour party aren't using this definition. They are talking about all employees, regardless of education, training or position.
Forgive me if I am misreading your post, but it appear you're saying that a minority elites that are employed by a company already receive shares, so this is already happening.
Under this plan, all employees receive a stake in the company, which is more in line with what the original article was suggesting.
Forgive me if I am misreading your post, but it appear you're saying that a minority elites that are employed by a company already receive shares, so this is already happening.
Under this plan, all employees receive a stake in the company, which is more in line with what the original article was suggesting.
> But the Labour party aren't using this definition.
...err well they aren't using the word at all so it's a bit odd to say it's not the definition they're using.
> Forgive me if I am misreading your post
My point was that it wasn't some new radical idea - many people (not really elites - random programmers at tech companies, or marketers at agencies, or whatever aren't 'elites' by any stretch) are already getting this and it works fine without government intervention.
I would guess that at least 10% of Google, for example, is already owned by the employees? I may be wrong.
...err well they aren't using the word at all so it's a bit odd to say it's not the definition they're using.
> Forgive me if I am misreading your post
My point was that it wasn't some new radical idea - many people (not really elites - random programmers at tech companies, or marketers at agencies, or whatever aren't 'elites' by any stretch) are already getting this and it works fine without government intervention.
I would guess that at least 10% of Google, for example, is already owned by the employees? I may be wrong.
Restricted Stock Units (RSUs) are a standard component of compensation, at least for higher-performing employees, at many large tech companies. An RSU grant is a direct grant of shares, conditional only on the employee remaining at the company through the vesting date. I've received them, and know others who have.
Can you vote with these RSUs? Or does the bank holding them get that right?
Because last I checked with mine, they really belong to the bank, and are used to fill in my balance sheet. No voting allowed.
Because last I checked with mine, they really belong to the bank, and are used to fill in my balance sheet. No voting allowed.
I think that the American Corporation is not in crisis, and is doing a better job at performing its primary function of benefitting shareholders better than ever.
I think, on the other hand, that public benefit corporations and other governance structures are in crisis, because it is evident that they are getting outplayed everywhere you look.
EDIT: Non-profits have been doing well though. It seems easier to go "all in" on a charitable cause, or "all in" on a greedy cause, but combining the two into an amalgamated pro-social gung-ho business (a la public benefit corporations) is not easy to do.
I think, on the other hand, that public benefit corporations and other governance structures are in crisis, because it is evident that they are getting outplayed everywhere you look.
EDIT: Non-profits have been doing well though. It seems easier to go "all in" on a charitable cause, or "all in" on a greedy cause, but combining the two into an amalgamated pro-social gung-ho business (a la public benefit corporations) is not easy to do.
Shareholder capitalism has a pretty shoddy record for anyone who isnt a shareholder
The thesis of this article is based around the idea that the primary function of a corporation is not to create wealth for shareholders, but to involve more stakeholders. The crisis is therefore not in profitability of a corporation, which is still rather high; the crisis is in the effects of shareholder primacy on the environment, on labor, and on managers. Which is to say, unemployment is low but so are wages, inequality is high and increasing, and we’re on the verge of a mass extinction event caused by human activity - all this to maximize shareholder returns.
[deleted]
Oh boy, try looking outside America. The US is still the shining example of how to do things. Most of the world, even in Europe, are decades behind.
If you're going to post on a topic like this, please make sure it isn't generic and inflammatory, since that amounts to flamebait and will lead to a worse discussion (e.g. https://news.ycombinator.com/item?id=21139182).
The way to do that is to avoid making grandiose claims on the large topic and instead make more specific statements including good information. Basically: less sugar more fibre.
https://news.ycombinator.com/newsguidelines.html
The way to do that is to avoid making grandiose claims on the large topic and instead make more specific statements including good information. Basically: less sugar more fibre.
https://news.ycombinator.com/newsguidelines.html
Yes, I agree. Definitely try to minimise posts with titles like "The American Corporation Is in Crisis". Stick to the data like: America being one of the productive economies in the world, American management being high-quality, American capital markets being high-quality...srs, it is amazing to me that you think you are being objective. You see this over and over here (probably due to the overrepresentation of engineer-types who don't understand how to argue or what an actual argument is...as in this case), the "wrong" facts being treated as subjective, the "right" facts being treated as objective.
Btw, for any avoidance of doubt (because unf, you need to say this kind of thing on here otherwise the neckbeards will get triggered): I have postgrad qualification in studying this (economic history/ipe), I have studied this for most of my adult life, and I have practical knowledge of this analysing companies in Europe and US when I worked as an equity analyst. If you think I said anything subjective or controversial, you shouldn't be correcting other people. Keep doing God's work.
Btw, for any avoidance of doubt (because unf, you need to say this kind of thing on here otherwise the neckbeards will get triggered): I have postgrad qualification in studying this (economic history/ipe), I have studied this for most of my adult life, and I have practical knowledge of this analysing companies in Europe and US when I worked as an equity analyst. If you think I said anything subjective or controversial, you shouldn't be correcting other people. Keep doing God's work.
Ah yes, Amtrack is an amazing experience compared to the European passenger rail network.
US housing also extremely efficient for filtering unwanted people out of populated areas. Europeans could stand to learn a thing or two from that (although I've heard London is doing a good job of emulating us.)
US housing also extremely efficient for filtering unwanted people out of populated areas. Europeans could stand to learn a thing or two from that (although I've heard London is doing a good job of emulating us.)
Ah, so you have actually have places to live in the US?
In the UK, there are no new houses at all in most cities and developers aren't allowed to build new ones because of planning regulation (designed by people who already have houses in that area). Also, remember that the UK is a small island with a fairly large amount of people on it (and remember that population density numbers are skewed by Scotland which is the same size as England but has 7% of the population)...that kind of thing isn't obvious when you live somewhere with infinite land.
Pointing to one or two things and saying: "Oh this is so terrible, we need to knock it all down" is not a smart approach. Most European countries have experimented with this (the UK went bankrupt doing this), it isn't a good idea (particularly when you have a system that is already the most successful).
In the UK, there are no new houses at all in most cities and developers aren't allowed to build new ones because of planning regulation (designed by people who already have houses in that area). Also, remember that the UK is a small island with a fairly large amount of people on it (and remember that population density numbers are skewed by Scotland which is the same size as England but has 7% of the population)...that kind of thing isn't obvious when you live somewhere with infinite land.
Pointing to one or two things and saying: "Oh this is so terrible, we need to knock it all down" is not a smart approach. Most European countries have experimented with this (the UK went bankrupt doing this), it isn't a good idea (particularly when you have a system that is already the most successful).
> Ah, so you have actually have places to live in the US?
Only outside the East Coast and California metro areas.
Only outside the East Coast and California metro areas.
USA has a lot of places. However, everyone wants to live in CA. That doesn't mean other areas are bad. They are very good.
> everyone wants to live in CA
Except for the people who actually live in CA. They all want to live in Oregon, Colorado or Texas.
Except for the people who actually live in CA. They all want to live in Oregon, Colorado or Texas.
[deleted]
> Oh boy, try looking outside America. The US is still the shining example of how to do things. Most of the world, even in Europe, are decades behind.
I might ask you to try your own advice. By what metric is Europe decades behind?
I might ask you to try your own advice. By what metric is Europe decades behind?
The most important difference is management quality, that is generally bad almost everywhere but the US (you may say it isn't measurable, there is data on this and, anecdotally, I have seen the same thing...so I believe it).
Others factors vary by country but: regulations on labour, regulations on business formation, regulations/subsidies limiting competition, poor/non-existent capital markets, corporatist industrial policies (i.e. Germany where you have large employers controlling the state and determining policy), regressive tax systems, trade unions (in some areas they work very well, in others they don't e.g. UK where you have a major political party that is controlled by trade unions).
I think one important point too: the UK is very bad as well. It is often held up the nation that is closest to the US and this is definitely true in many areas - progressive tax system, low regulations, strong capital markets - but in terms of results it isn't even in the same ballpark. Management quality is a large part of this story (if you can find it online, there is a lot of research on productivity and management quality in the UK).
This doesn't mean that every country is poor - Netherlands and Denmark, in particular, do some things very well - but is the whole area anywhere close to the US? No.
Others factors vary by country but: regulations on labour, regulations on business formation, regulations/subsidies limiting competition, poor/non-existent capital markets, corporatist industrial policies (i.e. Germany where you have large employers controlling the state and determining policy), regressive tax systems, trade unions (in some areas they work very well, in others they don't e.g. UK where you have a major political party that is controlled by trade unions).
I think one important point too: the UK is very bad as well. It is often held up the nation that is closest to the US and this is definitely true in many areas - progressive tax system, low regulations, strong capital markets - but in terms of results it isn't even in the same ballpark. Management quality is a large part of this story (if you can find it online, there is a lot of research on productivity and management quality in the UK).
This doesn't mean that every country is poor - Netherlands and Denmark, in particular, do some things very well - but is the whole area anywhere close to the US? No.
Approaching this issue from the perspective of management quality is interesting. I'm curious what metrics/outcomes you are using to make your case. What specific benefits accrue to US corporations due to their advantageous managerial environment?
Is it something along the axes of innovation, efficiency, or profitability?
Keeping in mind that the article we're discussing already frames the discussion as (paraphrasing): US management and boards are great at their job, but are the assumptions behind corporate governance/stakeholding correct?
Is it something along the axes of innovation, efficiency, or profitability?
Keeping in mind that the article we're discussing already frames the discussion as (paraphrasing): US management and boards are great at their job, but are the assumptions behind corporate governance/stakeholding correct?
How does any of this benefit your average American? The way I see it a broken bone or a pregnancy could very easily spell financial ruin for a whole family. Education costs are also off the charts!
It's almost as if there are two ways to look at the economy of a country: one looks strictly at how the economy benefits the owners (not sure what the right word here is but I mean Bezos' of the America) and the other looks at the benefit the economy provides to the rest of the people.
It's almost as if there are two ways to look at the economy of a country: one looks strictly at how the economy benefits the owners (not sure what the right word here is but I mean Bezos' of the America) and the other looks at the benefit the economy provides to the rest of the people.
[flagged]
Middle manager in Germany here, curious about what makes management in the US so successful or distinct - are you able to elaborate?
I did notice that most of my management knowledge seems to originate in the US; very little original thoughts from other areas.
Your tone is indicative of the problem. If you view a good idea as a "US" idea then that is part of the problem. An idea is a good or bad regardless of who said it (I am in the UK, this happens all the time in UK companies...status and rank are everything, junior people can't have good ideas so off the cliff we go).
The general difference is, imo, a more meritocratic society (ref the point above) but also a far deeper understanding of a business and what it is for (in the UK, most people who run businesses have no idea...although it is rarer now, I have talked to CEOs of publicly-listed billion pound companies who have no idea how to measure capital in their business, no idea how to measure returns or even what those measures mean...it is a clown show).
The latter is a function of MBA training (you can get all this info yourself btw by just reading), lower share of family-owned businesses (this is a correlated factor, family-owned businesses in the US actually tend to be very well run...in Europe, they are far worse), and the importance of capital markets (in somewhere like Germany, all you need to do is impress your banker, most German bankers are clueless, and they will lend to you even if your business in insolvent...unsurprisingly, Germany's banking sector now looks insolvent so that process is inefficient...capital markets don't always work well but they impose far more discipline).
Btw, there is a lot of research on this if you Google. Which I am sure is far more insightful than my random anecdotes and generalisations.
The general difference is, imo, a more meritocratic society (ref the point above) but also a far deeper understanding of a business and what it is for (in the UK, most people who run businesses have no idea...although it is rarer now, I have talked to CEOs of publicly-listed billion pound companies who have no idea how to measure capital in their business, no idea how to measure returns or even what those measures mean...it is a clown show).
The latter is a function of MBA training (you can get all this info yourself btw by just reading), lower share of family-owned businesses (this is a correlated factor, family-owned businesses in the US actually tend to be very well run...in Europe, they are far worse), and the importance of capital markets (in somewhere like Germany, all you need to do is impress your banker, most German bankers are clueless, and they will lend to you even if your business in insolvent...unsurprisingly, Germany's banking sector now looks insolvent so that process is inefficient...capital markets don't always work well but they impose far more discipline).
Btw, there is a lot of research on this if you Google. Which I am sure is far more insightful than my random anecdotes and generalisations.
What keywords should I search for? "us vs europe management quality" didn't result in anything obvious.
https://www.bankofengland.co.uk/-/media/boe/files/speech/201... - by the BOE Chief Economist which refs some papers (the BOE also has papers they have done by it will take me a while to dig them out).
The family management stuff should be easy to find but - https://www.sciencedirect.com/science/article/pii/S092911990... - is an example.
The family management stuff should be easy to find but - https://www.sciencedirect.com/science/article/pii/S092911990... - is an example.
>are you able to elaborate?
He must be taking pride in the fact that managers grind employees into dust in the US...US managers have overseen the removal of employee benefits like health insurance and pensions, managers have kept worker wages stagnant decade after decade...meanwhile worker efficiency is at record highs, profits are at at record highs, executive compensation is at all time highs, and there has never been a wider gap in executive compensation vs employee compensation.
He must be taking pride in the fact that managers grind employees into dust in the US...US managers have overseen the removal of employee benefits like health insurance and pensions, managers have kept worker wages stagnant decade after decade...meanwhile worker efficiency is at record highs, profits are at at record highs, executive compensation is at all time highs, and there has never been a wider gap in executive compensation vs employee compensation.
The ideology of generating shareholder profit "has caused immeasurable harm"? Really? The author is casting aside decades of economic growth, peace, and innovation.
> New policies could ensure that all the stakeholders who collectively generate a corporation’s prosperity then benefit from its wealth.
I don't agree with this slight-of-hand. Employees are stakeholders, sure; they will lose their job if a company goes under, and may not get a promotion if growth at the company stops. But they are NOT owners of the company in equity terms.
> New policies could ensure that all the stakeholders who collectively generate a corporation’s prosperity then benefit from its wealth.
I don't agree with this slight-of-hand. Employees are stakeholders, sure; they will lose their job if a company goes under, and may not get a promotion if growth at the company stops. But they are NOT owners of the company in equity terms.
"The author is casting aside decades of economic growth, peace, and innovation."
What about things like healthcare costs, lifespan estimates, mass shootings, addiction rates, cost of housecare, and economic movement?
EDIT: Wait, decades? Are you sure? Wasn't the 2008 recession just over a decade ago?
What about things like healthcare costs, lifespan estimates, mass shootings, addiction rates, cost of housecare, and economic movement?
EDIT: Wait, decades? Are you sure? Wasn't the 2008 recession just over a decade ago?
Plenty of market economies with similar corporate structures to ours have not seen out-of-control healthcare or housing costs, and have seen growing lifespans, etc. Indeed, that's true even within the U.S. In Iowa, housing costs are low and have remained stable, and the homicide rate is similar to Belgium or Canada. Unemployment peaked at under 7% in the recession, and is just 2.5% now. Separately, life expectancy for Asians in the U.S. exceeds that for Asians in countries like Singapore or Japan.
Corporations are more or less the same everywhere, but different places within the U.S. have vastly different housing policies, social challenges, etc. It strains credulity to conclude that corporations are somehow to blame for your laundry list of problems, rather than the specific policies that directly address those issues.
Corporations are more or less the same everywhere, but different places within the U.S. have vastly different housing policies, social challenges, etc. It strains credulity to conclude that corporations are somehow to blame for your laundry list of problems, rather than the specific policies that directly address those issues.
I don't see how they're any less related to peace and innovation.
> What about things like healthcare costs, lifespan estimates, mass shootings, addiction rates, cost of housecare, and economic movement?
What do any of these things have to do with corporations?
It sounds like your gripe is with something else.
What do any of these things have to do with corporations?
It sounds like your gripe is with something else.
It has a lot to do with corporations given that corporations actively lobby for policies that have adverse affects on the general public, collude with each other to fix prices/wages, and monopolize industries to push out competition, among other things. All of this due to them carrying out their "fiduciary responsibilities".
Healthcare costs, housing costs, and economic movement have a great deal to do with corporations.
Well, let's break it down:
healthcare costs, lifespan estimates, mass shootings, addiction rates, and cost of housecare are all basically just the same thing from different angles: the healthcare industry
The healthcare industry is extremely successful if your goal is to maximize shareholder profit. It's a complete failure if your goal is to maximize consumer value, however.
healthcare costs, lifespan estimates, mass shootings, addiction rates, and cost of housecare are all basically just the same thing from different angles: the healthcare industry
The healthcare industry is extremely successful if your goal is to maximize shareholder profit. It's a complete failure if your goal is to maximize consumer value, however.
The depth of the 2008 recession was still better overall than the heights of previous decades. Things were down a little only compared to a couple years before.
Economic growth. That's in the media in government documents but it's that the measure most citizens should care about
The numbers grew but how much did quality of life increase in the past 20 years in the US? A vast majority of the population are in debt, the middle class has all but disappeared, unprecedented levels of working-but-homeless. But profits dose, hurrah!
The numbers grew but how much did quality of life increase in the past 20 years in the US? A vast majority of the population are in debt, the middle class has all but disappeared, unprecedented levels of working-but-homeless. But profits dose, hurrah!
>But how much did quality of life increase in the past 20 years in the US?
I have a magic little rectangle in my pocket that can answer an obscure question, get in contact with someone or order me a pizza faster than the president of the united state could get those things done in 1999.
My car tells me when a tire is low. My oven automatically turns off when it's done baking for a pre-selected time. Etc. Etc.
Sure, all that stuff existed in 1999 but it was rare or primitive. Today even someone living paycheck to paycheck has that standard of living. Technology has come down in cost and permeated our lives resulting in unprecedented convenience. It's the difference between the USSR launching the first satellite once at great expense and a private company flinging a car into space because "well we needed a test payload and why not". All this comes with trade-offs and a learning curve but so does every other bit of progress humanity ever made.
I have a magic little rectangle in my pocket that can answer an obscure question, get in contact with someone or order me a pizza faster than the president of the united state could get those things done in 1999.
My car tells me when a tire is low. My oven automatically turns off when it's done baking for a pre-selected time. Etc. Etc.
Sure, all that stuff existed in 1999 but it was rare or primitive. Today even someone living paycheck to paycheck has that standard of living. Technology has come down in cost and permeated our lives resulting in unprecedented convenience. It's the difference between the USSR launching the first satellite once at great expense and a private company flinging a car into space because "well we needed a test payload and why not". All this comes with trade-offs and a learning curve but so does every other bit of progress humanity ever made.
All the examples that you have provided are conveniences that are only needed because the general population now needs to work longer and harder to afford cost of living. And what's the point of advanced healthcare when most people can't even afford it? Take a trip out to the US Rust Belt and ask them how technology has improved their lives. Point is, economic growth is nothing to marvel at if only a select amount of people are benefiting.
Does quality of life include health? These families living paycheck to paycheck, at least in the US, would be totally destroyed if a health related issue came up.
I'm not convinced that convenience or technological gadgetry is a good indicator of quality of life.
> The author is casting aside decades of economic growth, peace, and innovation.
I think Steven Pinker's case for capitalism is strong; still, it may be that a significant portion of that progress derives from "cooking the books" with regard to externalities like ecology, the social fabric, and quality of life. (The fact that things seem to keep getting better on average also obscures the possibility that we're "leaving money on the table" in terms of how much more life could have been improved, in the absence of rent-seeking, perverse incentives, etc.)
The shareholder model in particular does seem to have two layers of moral hazard: one for externalities to the economy/ecology as a whole, and another for short-termism and fixation on valuations/exits rather than sustainable revenue and relationships. A single owner, even if the worst kind of extractive rent-seeker, at least must take responsibility for their choices (including the potential for pro-social principled choices!), as opposed to getting lost in the crowd of "any other rational actor would make this same choice, so I'm off the hook".
Douglas Rushkoff does a good job of examining the other side of the capitalism=progress coin, without throwing out baby with bathwater: https://rushkoff.com/books/life-inc/
I think Steven Pinker's case for capitalism is strong; still, it may be that a significant portion of that progress derives from "cooking the books" with regard to externalities like ecology, the social fabric, and quality of life. (The fact that things seem to keep getting better on average also obscures the possibility that we're "leaving money on the table" in terms of how much more life could have been improved, in the absence of rent-seeking, perverse incentives, etc.)
The shareholder model in particular does seem to have two layers of moral hazard: one for externalities to the economy/ecology as a whole, and another for short-termism and fixation on valuations/exits rather than sustainable revenue and relationships. A single owner, even if the worst kind of extractive rent-seeker, at least must take responsibility for their choices (including the potential for pro-social principled choices!), as opposed to getting lost in the crowd of "any other rational actor would make this same choice, so I'm off the hook".
Douglas Rushkoff does a good job of examining the other side of the capitalism=progress coin, without throwing out baby with bathwater: https://rushkoff.com/books/life-inc/
The article is arguing that employees should be equity owners of a corporation because for all intents and purposes that is how things actually work. Take a read, it's an interesting argument.
>The ideology of generating shareholder profit "has caused immeasurable harm"? Really? The author is casting aside decades of economic growth, peace, and innovation.
You mean when I was in grade school in the '90s? Because my memories of being a young adult go roughly:
* Dot-com bust
* 9/11
* Jobless recovery and War on Terror
* Rising inequality, low growth
* Housing bubble
* Global Financial Crisis
* Bank bailouts, rising inequality, recession
* Slow-going recovery, rising inequality, falling real wages
* Real wages finally start ticking slightly, slightly, slightly upward after decades
* Rising inequality, low growth
* Trump elected
* Rising inequality, low growth, economists now talking very publicly about corruption and "secular stagnation"
You mean when I was in grade school in the '90s? Because my memories of being a young adult go roughly:
* Dot-com bust
* 9/11
* Jobless recovery and War on Terror
* Rising inequality, low growth
* Housing bubble
* Global Financial Crisis
* Bank bailouts, rising inequality, recession
* Slow-going recovery, rising inequality, falling real wages
* Real wages finally start ticking slightly, slightly, slightly upward after decades
* Rising inequality, low growth
* Trump elected
* Rising inequality, low growth, economists now talking very publicly about corruption and "secular stagnation"
The old factory-oriented way of looking at capitalism is growing ever more obsolete. The newer companies grow by hoarding and controlling de-facto standards, and by selling customers' personal details to slimebags. They are essentially rewarded for evil. If you reward people for evil you get MORE evil.
Why is nobody successfully competing against FaceBook? Is it because everyone has a low IQ except FaceBook? No, it's the Network Effect: you can't get sufficient customers to compete until you get sufficient customers, creating a Catch-22.
Real work and real competition is missing from Big Tech. I'm all for rewarding those who build better mousetraps, but not those who keep others out of the mousetrap business and put the mouse meat into your burger without telling you.
Why is nobody successfully competing against FaceBook? Is it because everyone has a low IQ except FaceBook? No, it's the Network Effect: you can't get sufficient customers to compete until you get sufficient customers, creating a Catch-22.
Real work and real competition is missing from Big Tech. I'm all for rewarding those who build better mousetraps, but not those who keep others out of the mousetrap business and put the mouse meat into your burger without telling you.
I found this to be a very good read: https://www.amazon.com/Capitalism-without-Capital-Intangible...
It's now Hoardism: the first to hoard the IP and market share wins all, the rest grovel for scraps.
Capitalism may appear to be going obsolete only because our society has been corrupted with too much corporatism.
Society has learned the hard way how much our data is worth, similar to how we slowly learned the danger of cigarettes. Demand, unfortunately, remains. So, suppliers will exist to sell what is in demand. Facebook's market share is not invulnerable, however!
Society has learned the hard way how much our data is worth, similar to how we slowly learned the danger of cigarettes. Demand, unfortunately, remains. So, suppliers will exist to sell what is in demand. Facebook's market share is not invulnerable, however!
The real crisis is lack of high quality shareholders. Basing businesses on stakeholders rarely works as groupthink sets in quickly; the current shareholders are however mostly either persons that inherited wealth with no real connection to business itself or pension funds that are unable to guarantee contractual monthly retirement benefits, pushing for short-term stock profits.
It is the American people that are in crisis, not the corporation. The corporation is doing pretty fine, it's just the profit is not distributed in the best of the interests of the smaller share holders (ordinary people).
“Including workers in ownership and governance is necessary to lessen the hold on corporate wealth by affluent white families.”
Why should this be a goal? Is there something wrong with affluent people, or white people, or affluent white people?
Why should this be a goal? Is there something wrong with affluent people, or white people, or affluent white people?
Extreme wealth inequality has historically led to social instability, so there’s that.
none of this speaks to the 'problem' as it relates to race manifested in 'white ownership'
I hear you. I took the point as more of a, "if we want to realize more diversification of wealth and a more representative distribution, ..." I normally pick on stuff like this too but I'm willing to give the author the benefit of the doubt and not assume they're racist because the article is so well written.
In US society, wealth is power. When there is a great disparity in wealth, there is an equally great disparity in power. It's that power disparity that is a serious problem, not the wealth as such.
But again: why is it bad if white people are in power? What’s wrong with white people?
I didn't take the line as meaning what you're taking it as meaning. I took it as as a recognition of the makeup of the traditional power structure. It did seem a bit on the pandering side, though.
There's something wrong with capitalism, and radlib journalists are somehow getting dragged all the way into advocating worker ownership without actually realizing it's about the capitalism, not secretly about race.
Ideology is a hell of a drug. Most of the ruling class and elites still believe There Is No Alternative, so this is what we get.
So the ruling class simultaneously believe that There Is No Alternative, but also that giving workers (partial) control of the means of production is a good way to Smash The Patriarchy?
For pirates, the solution was multifaceted, but the most critical components were: * Profit sharing - The riches captured by a pirate vessel were split amongst the pirates in a remarkably egalitarian model. * Democracy - The Captain and Quartermaster of a pirate ship were elected democratically by the crew.
The result was pirate ships were able to outfox the established navies of the time and manage ships with crews upwards of 100 all without the support of established judicial systems.
Disclaimer: I am one of the co-founders of a design and development studio based on these exact same principles:
https://www.fountstudio.com/blog/yes-we-have-a-pirate-code-1...