A Real Ownership Society

[Demeter]

OpEdNews.com

Original Content at http://www.opednews.com/articles/opedne_tom_cobb_061008_a_real_ownership_soc.htm


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October 9, 2006

A Real Ownership Society

By Tom Cobb

For the party tagged with the reputation of having no new ideas, here's one for the Democrats to try on for size: Restructure our corporations so that workers would be given voting control in exchange for becoming the last bearers' of business risks. In turn, absentee investors would enjoy roughly the same investment returns as they get now, while holding less risk. The good that would come from such reforms would be far-reaching, even revolutionary in some respects.

Before we can describe how to bring about these reforms, the doubts of the skeptical must be spoken to first. Most dubious are those who think first of United Airlines' recent experience with worker ownership. As a corporation majority-owned by workers, United Airline's early collapse into bankruptcy after 9/11 has been interpreted by many as proof that worker ownership doesn't work. In actuality, United Airline's experience was merely just another case study in how the current system allows corporate insiders and agents to exploit absentee investors.

In the case of United Airlines, the insiders happened to be the workers, an ownership group that had taken majority control of the company in exchange for wage concessions. Once business conditions improved, they used their insider position to extract from other shareholders a contract that paid wages far above industry averages. In this regard, workers appropriated the wealth of absentee shareholders in essentially the same way that executive insiders at Enron, Worldcom, and so many others did. This appropriation of wealth can be thought of as a tax imposed on small investors by the agents and insiders who control corporate boards. Its myriad forms are far too extensive to describe here, but they extend from the executive suite to every corner of Wall Street...In addition to this tax, there is a second levy placed on all individuals who deal with corporations. By granting the entitlements of limited liability, absentee ownership, and pooled capital to our corporations, they instantly gain a bargaining advantage against the individual. Whether as workers or consumers, an individual is nearly always at a disadvantage when negotiating with a corporation for the value of the labor they seek to sell, or the value of the goods they seek to buy. As a result, some discount is implicit in the price of our work wages, and some premium is implicit in the price of nearly everything we buy...The fact that these separate taxes affect interests groups with normally opposing interests creates the opportunity for reform. By adopting a new corporate ownership structure, each group could help the other alleviate their tax burden. The structure that could accomplish this would have absentee shareholders exchange their current shares for a new class of shares called Total Value Added shares, or TVA shares. Workers would be issued shares of these as well. The percentage share each group would get would be negotiated between the two, but it would no doubt be directed by past history and some accounting for the increased business risks assumed by workers.

A share would not represent a stake in profits, but rather a stake in the total of all value created by the corporation. Looked at another way, this can be thought of as profits before wages are paid. In this respect workers and investors would be partners, sharing in the last dollar of value earned or lost by the corporation. Absentee shareholders would cede operational control of the organization to corporate work forces by allowing the creation of a separate class of voting stock solely owned by workers. The equity value of these shares would be nominal, but the voting rights would allow them to select their own leadership, and direct the growth goals and strategy of the corporation. The voting rights would not, however, allow workers to set wages to their advantage (as occurred at United Airlines). Instead, workers' share of corporate revenue would be established by the percentage split set through the issuance of the TVA shares...Under this revised arrangement, executive management would no longer be thrust into the duplicitous role of leading a work force to act against their personal interests. Instead of workers being asked to assist the corporation in, say, outsourcing their own jobs, executives would be rated on their ability to keep a worker's job. The influence these changes would have on workplace effort, productivity and morale would be profound.


Authors Website: http://outskirtspress.com/cgi/webpage.cgi?ISBN=159800350X

Authors Bio: As the author of "A Real Ownership Society", I advocate for socializing the behavior of our corporations, and democratizing their benefits. By discarding the conventional model of corporate ownership that now relies upon absentee ownership, and replacing it with one based on worker ownership, we can accomplish these ends.


A DIFFICULT READ, BUT WORTH CONSIDERING. IF THE PRACTICE OF ORGANIZED THEFT IN CORPORATIONS IS TO BE CURTAILED, CORPORATIONS WILL HAVE TO BE GOVERNED DIFFERENTLY.

[silverweb]

1. It'll never happen.

It just makes too much good sense.

:sarcasm:

[Demeter]

2. I'll Add It To Our List of Impossible Dreams

1. Impeachment....