4 ms·

If the hierarchical structure is inferior to a worker-owned structure, why aren't the most successful companies worker-owned? Same to your second point: It is

If the hierarchical structure is inferior to a worker-owned structure, why aren't the most successful companies worker-owned? Same to your second point: It is obviously a market advantage if you get the same quality of CEO for less money. So why are the CEO's salaries so high? If the supply of cheaper but equally good managers is there, why does the usual supply-and-demand price finding system of the market not work? Is something stopping it? That being said, I really don't like the cult around Jobs. However, the cult was clearly an advantage for Apple, and it made him a rare manager. And thus, expensive.

eesmith 9y ago
You are defining success as "large market cap" or "large number of product sales", yes? There are other definitions, like satisfaction of the employees, or corporate social responsibility. These are harder to evaluate, and empathy and humane interactions costs money - that's why company boards want robots. Suppose it takes something like Microsoft's policy of "embrace, extend, and extinguish", or the FUD policy associated with IBM, or the LBO-and-loot-the-pension-plan of KKR, for a company to become huge. These are rather cutthroat approaches, and not examples of what I would consider to be good corporate social responsibility. If a worker-owned structure is less likely to be socially irresponsible, because so many people are involved in the decision making instead of the dominating personalities that tend to be at the top of a hierarchical structure, then that would explain why the most successful companies are not worker-owned. I have no idea if this is true, but based on the lectures I've heard by pro-worker-cooperative people, it's not unreasonable. As to the second point, Richard D. Wolff's most recent "Economic Update", at https://youtu.be/KrPHl1s9MNw?t=864 https://youtu.be/KrPHl1s9MNw?t=864 , comments about the recent rejection by doctors in Quebec of a pay raise their union negotiated. Quoting from the translation of the rejection letter, given at http://home.nzcity.co.nz/news/article.aspx?id=265449 http://home.nzcity.co.nz/news/article.aspx?id=265449 : > "Contrary to the Prime Minister's statements, we believe that there is a way to redistribute the resources of the Quebec health system to promote the health of the population and meet the needs of patients without pushing workers to the end." Wolff comments (at t=1002) "the capitalist model: you pay the people at the top a great deal and part of that money is to keep down everybody else. Because you know something, it's been learned by capitalists that if you pay the top a lot you can avoid paying the mass of your workers what they ought to be paid. It's cheaper to pay those at the top a lot more than it is to give everybody a fair shake. So you're top-heavy, with overpaid folks at the top. And you know something? This happens everywhere. .... Remember, Apple was one of the many large tech companies involved in an anti-trust lawsuit that charged they colluded to avoid poaching each others' employees. Such a collusion would have the effect of depressing everyone's wages, and therefore increase corporate profit. Just like that model predicts.
- davrosthedalek 9y ago
  I define success as "the company is still around many years later". All the alternative ways to construct a company are nice, but they are worth nothing if the company will not exist for long. The market is, in some very real sense, an evolutionary system. There is clearly a fitness function, and only the fittest companies survive. You can not freely pick your fitness function, it's implicitly defined by the boundary conditions of the market. Anti-trust laws are important facets of these boundary conditions, especially because they keep the market from falling into degenerated states. In the end, the different local markets, shaped by the laws of each country, are competing on a world scale. I am not saying that worker-owned companies wouldn't be nicer, but they are clearly less effective/less fit in the current market system. Otherwise we would have more of them. It is not clear to me that this is just because a "strong leader" system is cheaper and more easily extorts the workers. I am not convinced that steering by committee, especially if most of the committee members are maybe less educated than the average CEO, works very well from a long term strategy perspective.
  - eesmith 9y ago
    In that case, most of the longest-lived companies are privately held. The current market system is built by capitalists, for capitalists, and include the goal of squeezing everything they can out of the workers. Of course a worker-owned cooperative will be a less effective fit. The current system should not be the final arbiter of what success means. You mentioned anti-trust laws. What of worker right laws, and laws related to unionization? (In the last, I include laws like the Taft-Hartley Act which limit what unions can do.) I don't understand your last sentence. Most large companies are already run by committee, no? There's an ongoing negotiation between the C-level officers and the board of directors. It isn't that the CEO sets policy by dictate. Perhaps https://en.wikipedia.org/wiki/CEO#Celebrities https://en.wikipedia.org/wiki/CEO#Celebrities is relevant? > Business publicists since the days of Edward Bernays and his client John D. Rockefeller and even more successfully the corporate publicists for Henry Ford, promoted the concept of the "celebrity CEO". Business journalists have often adopted this approach, which assumes that the corporate achievements, especially in the arena of manufacturing, were produced by unique talented individuals, especially the "heroic CEO". ... Journalism thereby exaggerates the importance of the CEO and tends to neglect the harder-to-describe broader corporate factors. There is little attention to the intricately organized technical bureaucracy that actually does the work. Hubris sets in when the CEO internalizes the celebrity and becomes excessively self-confident in making complex decisions. Indeed, there may be an emphasis on the sort of decisions that attract the celebrity journalists.

eesmith 9y ago

You are defining success as "large market cap" or "large number of product sales", yes? There are other definitions, like satisfaction of the employees, or corporate social responsibility. These are harder to evaluate, and empathy and humane interactions costs money - that's why company boards want robots. Suppose it takes something like Microsoft's policy of "embrace, extend, and extinguish", or the FUD policy associated with IBM, or the LBO-and-loot-the-pension-plan of KKR, for a company to become huge. These are rather cutthroat approaches, and not examples of what I would consider to be good corporate social responsibility. If a worker-owned structure is less likely to be socially irresponsible, because so many people are involved in the decision making instead of the dominating personalities that tend to be at the top of a hierarchical structure, then that would explain why the most successful companies are not worker-owned. I have no idea if this is true, but based on the lectures I've heard by pro-worker-cooperative people, it's not unreasonable. As to the second point, Richard D. Wolff's most recent "Economic Update", at https://youtu.be/KrPHl1s9MNw?t=864 https://youtu.be/KrPHl1s9MNw?t=864 , comments about the recent rejection by doctors in Quebec of a pay raise their union negotiated. Quoting from the translation of the rejection letter, given at http://home.nzcity.co.nz/news/article.aspx?id=265449 http://home.nzcity.co.nz/news/article.aspx?id=265449 : > "Contrary to the Prime Minister's statements, we believe that there is a way to redistribute the resources of the Quebec health system to promote the health of the population and meet the needs of patients without pushing workers to the end." Wolff comments (at t=1002) "the capitalist model: you pay the people at the top a great deal and part of that money is to keep down everybody else. Because you know something, it's been learned by capitalists that if you pay the top a lot you can avoid paying the mass of your workers what they ought to be paid. It's cheaper to pay those at the top a lot more than it is to give everybody a fair shake. So you're top-heavy, with overpaid folks at the top. And you know something? This happens everywhere. .... Remember, Apple was one of the many large tech companies involved in an anti-trust lawsuit that charged they colluded to avoid poaching each others' employees. Such a collusion would have the effect of depressing everyone's wages, and therefore increase corporate profit. Just like that model predicts.

davrosthedalek 9y ago
I define success as "the company is still around many years later". All the alternative ways to construct a company are nice, but they are worth nothing if the company will not exist for long. The market is, in some very real sense, an evolutionary system. There is clearly a fitness function, and only the fittest companies survive. You can not freely pick your fitness function, it's implicitly defined by the boundary conditions of the market. Anti-trust laws are important facets of these boundary conditions, especially because they keep the market from falling into degenerated states. In the end, the different local markets, shaped by the laws of each country, are competing on a world scale. I am not saying that worker-owned companies wouldn't be nicer, but they are clearly less effective/less fit in the current market system. Otherwise we would have more of them. It is not clear to me that this is just because a "strong leader" system is cheaper and more easily extorts the workers. I am not convinced that steering by committee, especially if most of the committee members are maybe less educated than the average CEO, works very well from a long term strategy perspective.
- eesmith 9y ago
  In that case, most of the longest-lived companies are privately held. The current market system is built by capitalists, for capitalists, and include the goal of squeezing everything they can out of the workers. Of course a worker-owned cooperative will be a less effective fit. The current system should not be the final arbiter of what success means. You mentioned anti-trust laws. What of worker right laws, and laws related to unionization? (In the last, I include laws like the Taft-Hartley Act which limit what unions can do.) I don't understand your last sentence. Most large companies are already run by committee, no? There's an ongoing negotiation between the C-level officers and the board of directors. It isn't that the CEO sets policy by dictate. Perhaps https://en.wikipedia.org/wiki/CEO#Celebrities https://en.wikipedia.org/wiki/CEO#Celebrities is relevant? > Business publicists since the days of Edward Bernays and his client John D. Rockefeller and even more successfully the corporate publicists for Henry Ford, promoted the concept of the "celebrity CEO". Business journalists have often adopted this approach, which assumes that the corporate achievements, especially in the arena of manufacturing, were produced by unique talented individuals, especially the "heroic CEO". ... Journalism thereby exaggerates the importance of the CEO and tends to neglect the harder-to-describe broader corporate factors. There is little attention to the intricately organized technical bureaucracy that actually does the work. Hubris sets in when the CEO internalizes the celebrity and becomes excessively self-confident in making complex decisions. Indeed, there may be an emphasis on the sort of decisions that attract the celebrity journalists.