I get the idea that the owner wants to run things his way but when people say things like employees are simple cogs who risk nothing it explains why socialism is still a thing.
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Social benefit? All on their own?
Have you ever put a sizable portion of your own capital/reputation at risk and had to make payroll? Has it ever been your constant worry and concern for years on end? Labor gets to go home after their 8 hour shift. Ownership has real skin in the game.
When small companies fold good labor finds new jobs after a few moments on unemployment. Often owners lose their entire life savings and file for BK.
On a corporate level the equity ownership gets absolutely nothing when a company folds. The secured creditors and employee pensions get paid first. Then vendors of the company. Stockholders often get zilch.
And labor does not care or have anything invested in the companies they work for? Labor has nothing to lose? Some jobs pose health risks. People lose fingers, limbs and lives. They end up with bad backs, knees and shoulders. And when a company goes out of business, or sends jobs overseas, not everyone just finds another job. Cities have borderline 3rd world conditions after factories have closed.
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They have something invested if they buy stock or get compensated with stock.
There are courts and a country chalked full of lawyers to help anyone maimed or wronged through malfeasance.
For chronic pain from working, workers know that going in. One look at the way the old timers walk on the jobsite will tell you what doing X job for 50 years will do to you. If a man freely chooses to be a carpenter, sells his labor to Acme Corp and winds up with carpal tunnel and bad disks. Is that Acme Corp’s fault?
Does the risk of being a carpenter give that man a right to use government force to have a 40% say in how ownership runs Acme Corp?
The jobs that factory provided didn’t exist before the factory opened. If the investors aren’t heroes for building the factory and hiring people (to try and serve their customer and make profits) then they aren’t villains for closing it.
Having a skill set that’s only valuable to one company on earth (and refusing to develop new skills as needed) is even more risky than putting all of your investments in one company.
I grew up in Pittsburgh post steel death. Everyone that stayed reinvented themselves. Two of the richest men I know were millwrights that got layed off in 1979. Now they’re business owners and real estate investors. Everyone else left to find work. There’s a reason there’s a Steeler bar in most every city in the nation. Hell there’s one in Grand Cayman.
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Nope, it’s true. And it isn’t a good use of time to continue on this if you’re attempting to label the actual history as fake news.
Owners ran things prior to the 1980s, but didn’t operate under the shareholder primacy theory, and a number of laws and policies prevented this in practice. All that changed with the birth of Friedman’s theory.
So, the next step is to take a look at its results and evaluate: good for society? Or bad? If bad, we do something about it.
You and your libertarian ilk opt for a weird blend of fundamentalism and nihilism on the subject - there is no good or bad, it just is what GodMarket determines and we subjects don’t get a vote in the matter.
No thanks. And Adam Smith is rolling over in his grave.
This country was never founded on such a morally vacuous brand of capitalism, and there’s no reason to go that route now.
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And this isn’t airy fairy coffee shop talk. This shareholder primacy theory is what produced this short-sighted business approach of the CEO - well compensated with stock and stock options of his own - opting for short term, no growth strategies to simply boost stock quarter by quarter, primarily by financial engineering. And the big shareholders - most often institutions - are fine with that approach, because they themselves don’t care about two years from now, they are not holding for a long term play.
So we get an overheated stock market with unsustainable P/E ratios and the (unfounded but often) assumption that since the stock market is raging, it must be because the underlying economy is red hot. Which is wrong and dangerous of course.
We decry this short-termism as bad for the economy and society as a whole - and it is. But it works great for the elite that benefit from it, so they will fight to keep it in place.
Who wins? Unclear yet, but one thing I do know - there’s no value in pretending that GodMarket (praise be unto him) will solve it all for us all if we just belieeeeeeeve.
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But, but, Ayn Rand was smarter than Jesus.
We know what happens when you say let them eat cake.
I think, generally speaking, people are referring to financial risks when they say this. W2 employees take no financial risks collecting a paycheck. It isn’t their house that will be foreclosed on in the event of bankruptcy.
Regarding forcing companies to democratically elect 40% of the board, no thanks. Look at who people “democratically elect” now with the stakes being even higher. I don’t trust Suzzy in Account Payable who can’t read an entire email to elect board members that wield 40% control.
If employees want control, start a co-op. It’s the future anyway…
I think we can come up with something better. To start, I think it should be illegal to compensate the C suite with stocks or, at the minimum, require a 5+ year vesting period. We should also eliminate quarterly financials (as Buffet suggests). It’s nonsense. There are lots of things we can do that don’t require
What the hell does Elizabeth Warren know about running a corporation anyway.
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The compensation for taking rights away from business owners is to take away their rights in a different fashion?
Not opposed at all, as I believe stock options payouts led to the 07 meltdown, but I didn’t expect you to suggest it
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I don’t understand what leads some people to believe “the market” is some god-like force that is disconnected from people. It’s just the interaction between buyers and sellers.
Some people believe buyers and sellers should be free to interact with each other in the marketplace; others believe a truly god-like entity should be introduced to the marketplace to make decisions for the buyers and sellers.
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Strawman. Private property rights have nothing to do with any concept of the market as god. John Locke’s trinity: “Life liberty and property” is significantly older than Friedman.
Richest nation ever? Check.
Highest living standards ever? Check.
They acted in their own rational self interest. As merchants and business people ALWAYS have.
Which part of managers running a profitable company as employees of the owners would Smith have disagreed with?
It’s clear you don’t like how large corporations work. That’s fine. It’s a free-ish country. There’s nothing stopping you from starting your own business and running it with all the social responsibility and high wages your heart desires. You can give away 40% of the board seats to your employees. Then if and when you crush those old stuffed shirts running businesses for profit you can convince them that your way is better.
Doesn’t that sound much more enlightened than forcing them to do business your way with the power of the federal government? Causing god knows how many negative externalities in your brain pursuit of equality of outcome.
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In my opinion, regulating compensation packages for C corps (not the amount just how a person is compensated) is a country mile away from forcing companies (not just publicly traded either according to the bill) to structure their board in a specific way thus affecting governance.
Compensation restrictions already exist anyway.
*It moves the goal post from short-term to at least medium to long-term. I’m sure we can also come up with an real incentive driven bonus plan as well.
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The average poor person in the US today has access to better food, water, medicine, education, HVAC, entertainment and transportation than Marie Antoinette did. Courtesy of the insane amount of products/services/wealth created by those evil capitalists.
Don’t let me interrupt your “fuck the poor” strawman narrative though.
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And I don’t think all of that erases the social strain of rising income inequality in a more anxious, atomized, highly mobile society.
So we shit on rights and upend economies to treat anxiety and social stress? You trolling me?
I’m just sharing a thought which I believe reflects reality. And, ignoring social cohesiveness is probably going to lead to outcomes even more offensive to you.
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And slaves in the US had it better than cavemen, what’s your point?
My point is the “poor” and the middle class in the US have nothing to bitch about. They didn’t have it better at any point in history. Not even in the vaunted 1950s (which had 5 recessions).
Everyone keeps talking about inequality like it matters. It only matters because we’ve brainwashed generations to believe that they deserve something they’ve done nothing to earn and that those evil successful guys took something from them.
Also that your Mary Antionette reference was utter bull.