I don't know if any one else in the US noticed that the first round of the French election was held today. The once powerful French Socialist party got a total of less than 2% of the votes.
God forbid anyone falls for the idea that workers should control the means of production.
Capitalism is best. If youâre the guy on top of the company. Or the company raising the price of goods and gas because you can.
Not so much if youâre the poor - literally - slob having to work two or three jobs because the billionaire owning the company wonât pay you a decent wage.
Say, I wonder who it is that keeps telling everyone to keep calm and love capitalism? Who generates that message? Could it be the people that profit the most from it?
I don't know if any one else in the US noticed that the first round of the French election was held today. The once powerful French Socialist party got a total of less than 2% of the votes.
We need go-go capitalism to afford a generous welfare state, and people won’t support go-go capitalism without a safety net. “Socialists” and Republicans forget different parts of this lesson.
Kentucky candle factory bosses threatened to fire those who fled tornado, say workers
There is nothing wrong with freemarket capitalism per se but this incident clearly explains the popularity of unions in many sectors and strongly hints at a role for better regulation and monitoring. In many dangerous sectors in rich western countries or sectors in developing countries dominated by western multi-national firms, non-union firms stay that way by matching or bettering the safety record.
If anything, industrial accidents are lower now in rich freemarket economies than they have ever been in history. The industrial safety and environmental records of the Sovietâstyle economies and the Latin American Neo-Marxist populist regimes were or are miserable by comparison.
This should make good intuitive sense as the economy shifts to information technologies and increasingly values human capital. Workers are far more valuable assets now than they were in the early part of the Industrial Age.
In passing, Paul Krugman has an interesting op-ed in the NYT on Kentucky and similar states who are net drawers of federal fiscal flows but preach "freedom" when it comes to larger social responsibilities.
because it is amoral. Its purpose is profit, and if that helps people - that's irrelevant. If it poisons people - that's irrelevant.
Capitalism could be a wonderful thing, if selling a useful healing efficient product makes money.
Capitalism could be a horrible thing, if it ruins the lives of its workers and the product destroys the environment.
Capitalism in its final stages: Amazon has built a fat logistics center in Tijuana. But that's not there to serve the Mexican market. No no.
It is there to import goods from China via Mexico. The exploited locals then break them down into parts with a value of less than $800.
These parts can then be imported from Mexico to the USA. The largest Amazon logistics center in the United States is less than 20 minutes away in San Diego. There the parts are then reassembled and can flood the US market.
Why are they doing this? Because Trump's trade war has led to heavy punitive tariffs. Mexico has no punitive tariffs against China, however, and NAFTA has a clause that goods under $800 can be imported duty-free.
And this is capitalism's fault?
Tariffs and trade wars are not capitalist approaches. Politics distorts markets, causing problems, and market players solve problems. Goods get to customers and Tijuana gets a new warehouse, a bunch of Tijuanans get jobs breaking down shipments. It's less efficient than a capitalist approach, but it gets the job done.
It's tax law, it doesn't have to make sense. But from my limited understanding of the case the employee was given stock options that anticipated a rising stock price, but the stock fell disastrously in the '99 tech bubble collapse. When she was terminated the IRS valued them at what she would have had to pay for the options had she bought them (back when the company's prospects were better) rather than the value they had when they parted ways.
It never made sense to me either, but there she wasâtaxed out of her house and out of a job.
going off course, but...sounds like she exercised some of the options when she was employed and held onto the stock (this triggered the tax on the difference of the stock value at that time, and her option price), but never sold the stock until later when the shares collapsed, at which point she could have had a capital loss.
-why would you pay taxes on unrealized option gains? Only taxed once you sell, and if its a big tax bill, it was also big pay day.If the option is upside down, dont exercise.
It's tax law, it doesn't have to make sense. But from my limited understanding of the case the employee was given stock options that anticipated a rising stock price, but the stock fell disastrously in the '99 tech bubble collapse. When she was terminated the IRS valued them at what she would have had to pay for the options had she bought them (back when the company's prospects were better) rather than the value they had when they parted ways.
It never made sense to me either, but there she was—taxed out of her house and out of a job.
I also wouldn't so hastily discard the contributions of the janitor and forklift driver. They may be more easily replaceable skillsets and might need some different handling, but if you can't see their impact I'd wonder how you how you decide who to incentivize.
It depends a lot on the role you let those people assume. If you hand somebody a broom and say "Sweep, put the broom away when you're done" you aren't getting much value out of that person's work. There are people whose work value is really that low, and from the company's perspective they are only as valuable as the task.
If you let the person with the broom be creative, if you aren't hobbled by work rules that say janitors sweep, and setup guys set up, and machinists machine...then the person with the broom can become a master machinist or run the company. People can grow out of their roles and their time can become too valuable to spend it running a broom.
I've been that guy. I've also been the guy in a union shop with no prospects beyond the task I was first given. I don't work there anymore.
This isn't such a rare thing. Since college I've worked for 7 companies, from huge publicly-traded corporations to mom&pop shops with fewer than a dozen employees. All but two offered some form of equity or profit sharing. -good for you, but this is rare
Depending on how a company is organized equity may be unworkably complex and/or impossible for the employees to convert to actual spendable money. Profit sharing is a lot easier to implement, but can be equally unworkable in, say, the startup realmâwhere a company may never, during its entire arc from garage to acquisition, turn a profit. -true, profit sharing works better for some, equity others (like a startup)
The MBA set will tell you that the results from such schemes are decidedly mixed, and I know people who were badly screwed when the stock options they were given were upside down when they and the company parted ways. Like have-to-sell-your-house-to-pay-taxes-on-unrealized-profits bad. -why would you pay taxes on unrealized option gains? Only taxed once you sell, and if its a big tax bill, it was also big pay day. If the option is upside down, dont exercise.
They do help in a general sense of building good will, but day-to-day the incentives are all wrong. If I have to make some kind of sacrifice to help the company prosper I pay 100% of the cost but reap a minuscule fraction of the rewards. And goodwill from employees depends a lot more on how they're treated day-to-day than the envelope they get twice a year. Of my seven companies the one work environment I'd return to in a heartbeat offered none of that. -again, sounds like you've worked for some good companies...good for you, because its not too common. I attend dozens of group meetings a year, and have to say while most are content, the % that are truly happy with their employer measure 10% or less.
While we're talking anecdotes I've seen a few companies that went the employee-owned route fold because the owners were completely inflexible about the changing business environment. You have a hard time laying off an owner, even if the task they did for the company is no longer useful. And how do you appropriately compensate a new employee. when the existing employees don't want to dilute their equity? You wind up with a two-tiered hierarchy that can be pretty toxic .-your talking mostly small cos here...you issue all the shares initially, and hold in a pool to distribute...or preferred equity would address the dilution problem.
I'm not saying you shouldn't do it, just that it won't fix a bad relationship or build trust where there is none.
I guess I'm just lucky? The circles I've run in (mostly, broadly speaking, the tech sphere) have been the opposite: obsessed with keeping good people and incentivizing them to stay. Or should we just throw down, and my anecdotes can beat up yours?
If you can tie an incentive to a particular behavior or outcome you can do some real good with them. You can also sow some serious discord and jealousy. Hard to see the impact on the company's prospects of, say, a forklift operator or a janitorâand thus hard to reward them for it.
I'm not trying to argue with you. I'm just saying that there is a range and if you get people invested they will perform better. I don't think having a company stock line in the 401K is giving people an equity position. I'm also trying to point out that it's not altruistic. There is a genuine and demonstrable (in my anecdotal experience) upside that can be shown to a board of directors on a spreadsheet.
I also wouldn't so hastily discard the contributions of the janitor and forklift driver. They may be more easily replaceable skillsets and might need some different handling, but if you can't see their impact I'd wonder how you how you decide who to incentivize.
Interesting discussion and not far removed from my experience here in Germany. As Islander says, it is all about aligning interests. Lazy's objections also apply in mainland Europe though too. If you have too much employee representation you can create a pretty sclerotic organization and one that can end up being even more unfair or even outright corrupt. And there have been some notable failures. However, no representation of employee interests is the other extreme. After all, employees are a pretty major stakeholder in most companies, along with creditors, shareholders and wider society who all get to have some say in how a company is governed through covenants, resolutions and regulations. Not allowing employees any avenue to have a say is generally considered bad management here.
Consequently, there is a law on codetermination here in Germany. Any company with over 500 employees must assign a third of all seats on the supervisory board to employee representatives. Note that Germany still has a two-tier governing structure that pretty rigorously separates the executive (managing board) from oversight (supervisory board). The latter sets the broad strategy, appoints the management board and approves major decisions, but most other decisions are made by the management board.
This separation is crucial when it comes to codetermination as it gives managers more freedom to make the best management decisions. But it also gives employees a major voice in the governing structures. Note this is talking about governance, not about ownership.
In terms of employee ownership, someone has already posted a link to all the German companies that have some kind of collective ownership, there a number of models out there and some very successful ones. However, the key factor IMO is not employee ownership per se, but the corporate culture. Here too, you want to get people on board and pull together as a team. Compensation, dividends and other financial rewards are part of this, but by no means the only factor. Conversely, working your butt off for little job security and no rewards for a company that pays massive dividends to the owners is simply not very motivating. Yet working for a company that is well managed and successful is in and of itself motivating, even if you have no actual stock ownership.
It's all about aligning the incentive with the behaviors you want. These were mostly active tech guys who wanted to be in the mix. Also smaller companies, so they were pretty close to where the big money was and there was resentment before they got a chance to participate. I'm not saying it's the only solution, but it was a pretty obvious one, and there was a ton of resistance by people who ultimately benefitted greatly from it. A couple of them continued to resent that I pushed it through even when they knew they made money because of it. That is a sick system, and people who were just jerks in a position of power.
I have several ideas that the c-suite hates (I don't have sick time in my teams, people take the time they need on the honor system). Directors are usually convinced that workers are somehow motivated differently than they are. Mostly it comes down to treating people well, and setting expectations.
On the topic, my experience has been that the system we have creates an all or nothing, winner take all attitude. It pervades every part of the business. People often see it through a zero sum lens, but that's rarely the best approach. Maybe my experience is uniquely bad, but if you look across the behaviors of most companies it doesn't seem that uncommon.
I guess I'm just lucky? The circles I've run in (mostly, broadly speaking, the tech sphere) have been the opposite: obsessed with keeping good people and incentivizing them to stay. Or should we just throw down, and my anecdotes can beat up yours?
If you can tie an incentive to a particular behavior or outcome you can do some real good with them. You can also sow some serious discord and jealousy. Hard to see the impact on the company's prospects of, say, a forklift operator or a janitor—and thus hard to reward them for it.
This isn't such a rare thing. Since college I've worked for 7 companies, from huge publicly-traded corporations to mom&pop shops with fewer than a dozen employees. All but two offered some form of equity or profit sharing.
Depending on how a company is organized equity may be unworkably complex and/or impossible for the employees to convert to actual spendable money. Profit sharing is a lot easier to implement, but can be equally unworkable in, say, the startup realmâwhere a company may never, during its entire arc from garage to acquisition, turn a profit.
The MBA set will tell you that the results from such schemes are decidedly mixed, and I know people who were badly screwed when the stock options they were given were upside down when they and the company parted ways. Like have-to-sell-your-house-to-pay-taxes-on-unrealized-profits bad.
They do help in a general sense of building good will, but day-to-day the incentives are all wrong. If I have to make some kind of sacrifice to help the company prosper I pay 100% of the cost but reap a minuscule fraction of the rewards. And goodwill from employees depends a lot more on how they're treated day-to-day than the envelope they get twice a year. Of my seven companies the one work environment I'd return to in a heartbeat offered none of that.
While we're talking anecdotes I've seen a few companies that went the employee-owned route fold because the owners were completely inflexible about the changing business environment. You have a hard time laying off an owner, even if the task they did for the company is no longer useful. And how do you appropriately compensate a new employee. when the existing employees don't want to dilute their equity? You wind up with a two-tiered hierarchy that can be pretty toxic.
I'm not saying you shouldn't do it, just that it won't fix a bad relationship or build trust where there is none.
It's all about aligning the incentive with the behaviors you want. These were mostly active tech guys who wanted to be in the mix. Also smaller companies, so they were pretty close to where the big money was and there was resentment before they got a chance to participate. I'm not saying it's the only solution, but it was a pretty obvious one, and there was a ton of resistance by people who ultimately benefitted greatly from it. A couple of them continued to resent that I pushed it through even when they knew they made money because of it. That is a sick system, and people who were just jerks in a position of power.
I have several ideas that the c-suite hates (I don't have sick time in my teams, people take the time they need on the honor system). Directors are usually convinced that workers are somehow motivated differently than they are. Mostly it comes down to treating people well, and setting expectations.
On the topic, my experience has been that the system we have creates an all or nothing, winner take all attitude. It pervades every part of the business. People often see it through a zero sum lens, but that's rarely the best approach. Maybe my experience is uniquely bad, but if you look across the behaviors of most companies it doesn't seem that uncommon.
This isn't such a rare thing. Since college I've worked for 7 companies, from huge publicly-traded corporations to mom&pop shops with fewer than a dozen employees. All but two offered some form of equity or profit sharing.
Depending on how a company is organized equity may be unworkably complex and/or impossible for the employees to convert to actual spendable money. Profit sharing is a lot easier to implement, but can be equally unworkable in, say, the startup realmâwhere a company may never, during its entire arc from garage to acquisition, turn a profit.
The MBA set will tell you that the results from such schemes are decidedly mixed, and I know people who were badly screwed when the stock options they were given were upside down when they and the company parted ways. Like have-to-sell-your-house-to-pay-taxes-on-unrealized-profits bad.
They do help in a general sense of building good will, but day-to-day the incentives are all wrong. If I have to make some kind of sacrifice to help the company prosper I pay 100% of the cost but reap a minuscule fraction of the rewards. And goodwill from employees depends a lot more on how they're treated day-to-day than the envelope they get twice a year. Of my seven companies the one work environment I'd return to in a heartbeat offered none of that.
While we're talking anecdotes I've seen a few companies that went the employee-owned route fold because the owners were completely inflexible about the changing business environment. You have a hard time laying off an owner, even if the task they did for the company is no longer useful. And how do you appropriately compensate a new employee. when the existing employees don't want to dilute their equity? You wind up with a two-tiered hierarchy that can be pretty toxic.
I'm not saying you shouldn't do it, just that it won't fix a bad relationship or build trust where there is none.
It's all about aligning the incentive with the behaviors you want. These were mostly active tech guys who wanted to be in the mix. Also smaller companies, so they were pretty close to where the big money was and there was resentment before they got a chance to participate. I'm not saying it's the only solution, but it was a pretty obvious one, and there was a ton of resistance by people who ultimately benefitted greatly from it. A couple of them continued to resent that I pushed it through even when they knew they made money because of it. That is a sick system, and people who were just jerks in a position of power.
I have several ideas that the c-suite hates (I don't have sick time in my teams, people take the time they need on the honor system). Directors are usually convinced that workers are somehow motivated differently than they are. Mostly it comes down to treating people well, and setting expectations.
On the topic, my experience has been that the system we have creates an all or nothing, winner take all attitude. It pervades every part of the business. People often see it through a zero sum lens, but that's rarely the best approach. Maybe my experience is uniquely bad, but if you look across the behaviors of most companies it doesn't seem that uncommon.
