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Companies Shouldn’t Be Accountable Only to Shareholders

323 points by mji 8y ago

lixtra 8y ago
Sounds a bit like the German works council system [1] that gives workers some representation in management. [1] https://en.m.wikipedia.org/wiki/Works_council https://en.m.wikipedia.org/wiki/Works_council
- knuththetruth 8y ago
  Which was made explicitly illegal by US labor law in the face of rising union power to prevent workers from having this kind of say.
  - pjc50 8y ago
    Wow - under what legislation?
    - knuththetruth 8y ago
      Taft-Hartley
- smileysteve 8y ago
  While it might be considered communist / socialist; I'd be interested in a tax policy that encouraged companies to ~X% worker owned.
  - fabianhjr 8y ago
    That could be encouraged trough mutualization programs.
Cthulhu_ 8y ago
non paywall version: http://archive.is/bGmKh http://archive.is/bGmKh
dahdum 8y ago
Considering how this would decimate the market and cause large amounts of frivolous lawsuits, I can't imagine this passes even pared down. She's announcing this merely to pad her resume before running in 2020. It doesn't have to be feasible, just needs to sound good.
- toomuchtodo 8y ago
  The US equities market value is already highly inflated. It will be coming down regardless over the next decade.
  - chollida1 8y ago
    > The US equities market value is already highly inflated. It will be coming down regardless over the next decade. I'll take the other side of that bet if you are saying that the market will be worth less in 10 years time than it is now. If on the other hand you are saying the market will go down sometime in the next 10 years then, we'll that's not really a statement worth making:) That's like saying I predict that it will be colder than it is today sometime in the next 10 years.
    - toomuchtodo 8y ago
      Based on current P/E ratios, the higher chances of an inverted yield curve, companies going private or not going public, and market analysis from folks like Vanguard about future returns being muted, my opinion is that most equities returns have been pulled forward, risk-adjusted returns will be comparable to bonds, and that there will both be a market pullback in the foreseeable future with total market value moving roughly sideways from today's highs for quite a while.
      - tanderson92 8y ago
        As a point of fact, the yield curve is not inverted (nor has it been for some time). Furthermore, forward PE ratios show returns far in excess of current government bond yields.
makotech222 8y ago
Hah, its almost like the people who do the labor should be the ones who decide what to do with the surplus they produce, instead of people who inherit tons of wealth and choose to buy up ownership of businesses. Elizabeth Warren has stated before that she is a capitalist. Which means that ownership of companies is held entirely by monied interests, never by workers.
Y_Y 8y ago
This is a fantastic idea, and I can't see how anyone (other than the people who stand to lose directly) could oppose it. All the same I know that they will. Consumers are anything but rational, and that is by design. The ultra-rich know well the value of hearts and minds, and that it's quite possible to spend money convincing (at least some) people of whatever you'd like them to believe. Maybe it's just because I'm a pinko-European, but in the unlikely event of this succeeding, I think it could really be the start of the pendulum swinging in the right direction in global economics.
- Cthulhu_ 8y ago
  > [...] I can't see how anyone (other than the people who stand to lose directly) could oppose it. And there you have it; the shareholders and CEO would stand to lose directly, they have a huge amount of money (and they're both national and international players; a foreign investor would give less of a shit about US workers), they're in politics (directly or paying for it), etc. I hope this gets traction, but I'm cynical, and I'm confident the US is already an oligarchy in the pockets of those that made 7 trillion out of their 250 billion investment.
- klenwell 8y ago
  Article was flagged out first time I brought it up. It's back now. But you get the point.
  - rectang 8y ago
    I hope we can have a civil HN discussion about this bill. I generally like Warren-style capitalism but am not sure yet what to think of this. When an article (or comment) gets flagged, HN accounts with sufficient karma may have the opportunity to "vouch". I used that once for this article already. This doesn't guarantee that the article will stay for long since there's an HN algo which tends to shuffle off pages with a lot of downvoting and flagging. (Which I think is a really nice feature, by the way. Thanks to the moderators for their good sense and hard work.) ETA: And that also means that if you want to keep this discussion alive for a while, relentlessly downvoting posts which don't agree with your bent, even when civil and well-argued, is counterproductive. There are some great comments arguing against Warren right now that I hope will be rescued from the greys.
onetimemanytime 8y ago
>>In the four decades after World War II, shareholders on net contributed more than $250 billion to U.S. companies. But since 1985 they have extracted almost $7 trillion. That’s trillions of dollars in profits that might otherwise have been reinvested in the workers who helped produce them. Nonsense. So tax them more on dividends, if that's needed. Why add more lawsuits from anyone on why AT&T bought x company when "it's not good for the common good"....whatever that is.
chollida1 8y ago
In this case the author matters a bit. It's Elizabeth Warren, the congress woman who is putting forth a bill to "reign in" wall street. I'm a fan of her and I like the parts of the bill that I've seen. I think we do need more regulation on wall street. > That shift has had a tremendous effect on the economy. In the early 1980s, large American companies sent less than half their earnings to shareholders, spending the rest on their employees and other priorities. But between 2007 and 2016, large American companies dedicated 93% of their earnings to shareholders. Because the wealthiest 10% of U.S. households own 84% of American-held shares, the obsession with maximizing shareholder returns effectively means America’s biggest companies have dedicated themselves to making the rich even richer. One of the best things I learned from becoming an engineer was the concept of feedback loops and how you need to constantly monitor and dampen them when they start to get out of control. The above certainly illustrates how the wealth gap started to increase over the past 30 years. I'm not sure what the correct ratio of how to payout mopey to employees vs owners but you could start by looking at what ratio public hedge funds or investment banks payout(like Virtu or GS). > In the four decades after World War II, shareholders on net contributed more than $250 billion to U.S. companies. But since 1985 they have extracted almost $7 trillion This is just intentionally obfuscating. What percentage of the dividends paid out where reinvested automatically. What percentage of the cash paid out in stock buy backs went right back into the market, you cant' tell because in the first line she used net contributions, but int he second she only mentions the money flowing out but not the net. It actually could be net positive but that wouldn't fit her narrative. > My bill also would give workers a stronger voice in corporate decision-making at large companies. Employees would elect at least 40% of directors. I really like this idea. I assume the directors would be qualified people and not just a random employee. To be honest the largest issue I see int he markets now is the dictator model where a single founder controls the voting. We've only seen this model in tech work during the bull tech market of 2004-present. 2008 was down but tech still did much better than most other asset classes. What happens when tech has another 2001 and people want Mark Zuckerberg fired or they want Google to focus on their bread and butter instead of the moon shots that cost them money, or Snap to, well do anything to earn the valuation that they and promises that they fooled everyone with.
- castlecrasher2 8y ago
castlecrasher2 8y ago
>American corporations exist only because the American people grant them charters. I get what she's saying here but it's not exactly the cause. A counter-argument to this premise could take this line and re-write it as "American corporations exist only because shareholders/VC firms invested capital in them." And while I don't disagree that CEO pay is nutso today I'm not convinced that employee-elected directors is the way to go. My initial reaction is I don't want to work under populist execs vying for employee votes; I think we get enough political speak from them as it is.
- wtvanhest 8y ago
  I don't think it would be bad to have an elected board member. It would provide input into decisions that have the potential to negatively impact employees.
  - castlecrasher2 8y ago
    I don't disagree with you, I just think the obvious connection between these elected directors' compensation and how well-liked they are would mean less-qualified, less-effective leaders on average.
- wffurr 8y ago
  >> populist execs vying for employee votes The alternative to democracy is feudalism, which is basically what we have now. You might hold your nose and say "politics" or "populism" but this is how you as an employee can exercise power in the workplace. I certainly prefer "populist execs vying for employee votes" to "brown nosing employees vying for exec favor".
  - Brushfire 8y ago
    Surely you aren't serious. Feudalism required working for the landowners near where you lived. In our society you can change jobs, start your own business, move, do freelance work, or not work at all if you so choose. I agree there are problems with the current system, but to equate it to feudalism is insanity.
creaghpatr 8y ago
No chance this will pass and the potential economic downstream effects could be pretty extreme, but I think there are some interesting nuggets in there that would make for good corporate stewardship ideas. But the premise that companies are only accountable to shareholders is false (or in this case, editorialized)- companies are accountable to the government, and more recently you have companies like FB and SNAP that are only truly accountable to voting shareholders and can choose to not maximize profit for whatever reason. Lastly, if employees are electing 40% of the directors, I would expect that to politicize the hiring process unnecessarily, and likely lead to far more unionization.
EliRivers 8y ago
This idea that companies should be all about shareholder value is so recent, but it seems to have infected minds so thoroughly that people even assume there are laws enforcing it. To quote the US Supreme Court: "Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not."
- castlecrasher2 8y ago
  >people even assume there are laws enforcing it Aren't there? I was under the impression that shareholders can and do file lawsuits against directors and executive leadership. A cursory Google search suggests that this is true.
  - EliRivers 8y ago
    I was under the impression that shareholders can and do file lawsuits against directors and executive leadership. A cursory Google search suggests that this is true. I'm certainly not suggesting that shareholders can't file lawsuits. Anyone can file lawsuits. Do you mean lawsuits specifically because companies didn't seek to maximise shareholder value? A cursory google search also suggests it's not true. https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co... https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=2311&context=facpub https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?arti... US Supreme Court opinion: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.” and so on. Now, it's true that laws reflect society, and if enough people believe something to be correct for long enough, the law will change. It's certainly true that in recent years we've heard more people, more loudly proclaim, that shareholder value is the whole point and should be the law. We've certainly seen legals cases exploring this. Nonetheless, companies have a number of obligations and responsibilities, and those they hold to their shareholders are but some among many.
    - castlecrasher2 8y ago
phkahler 8y ago
>> By 1997 the Business Roundtable declared that the “principal objective of a business enterprise is to generate economic returns to its owners.” I've never agreed with that. As a private company you can be in business for whatever reason you want. Maintaining financial viability seems to be necessary, but beyond that "profit" or return for anyone is not obviously an objective. Granted, you'll probably have trouble raising money if there's nothing in it for investors but does that mean they have to become the one and only priority? I often think a CEO needs to state what they're doing and the investors should decide if they think the plans and objectives of the company (and those running it) are a good investment. Investors can take it or leave it - for what it is. That seems to be what Google did to some extent. I also say that if the only goal of a company is to create returns, then every company that isn't in a higher profit industry should probably liquidate and use the money to start a hedge fund, or invest in a company that is more profitable. In other words, if your company makes small margins making some widgets, your investors would get better returns if you sell everything and invest in apple. This is a joke of course, but it makes my point. It's up to the company to define what it's objectives are, and it's up the investors to decide what they want to invest in based on those stated objectives of the companies.
- tribesman 8y ago
  > Historically, board appointed the CEO and most board members are shareholder. Having incentive aligned with the board earned you loyality of the board members and more compensation if you could trick the market into believing your fairytale and still juice out the max return.
- deelowe 8y ago
  But the CEO doesn't own the company, the investors do, so why would the CEO be the one to state the goals leaving investors to "take it or leave it"?
  - neom 8y ago
    Because if you don't like my plan you can go find a new CEO. And finding a new CEO is harder than it looks, especially in big business. CEOs should have a lot of leverage with their board, if they don't, they're cooked anyway. I have said to the external shareholders many times that their opinion of putting the business first and my opinion of putting the business first may differ because, unlike the investors, i'm responsible for the internal shareholders as well, and need to balance their views and opinions.
ailideex 8y ago
They are not - they are also accountable to jurisdiction in which they operate. So problem solved.
Brushfire 8y ago
This will just lead to more private companies that average Joe doesn't get to benefit from. Creating rules for private companies would take a refactor of our entire legal system.
lhopki01 8y ago
This has some ideas that are similar to what happens in Germany. https://en.wikipedia.org/wiki/Codetermination_in_Germany https://en.wikipedia.org/wiki/Codetermination_in_Germany Worker representation at the board level is good for companies as well because it can encourage pay restraint when the company really can't afford a pay rise. A board of very rich people telling you the company can't afford a pay rise for you is very different from some of your fellow workers saying the company can't afford a pay rise. The German law goes a lot further than this law does though since it applies to all companies with over 500 employees. Considering Germany is an economic powerhouse this law probably isn't harming the economy.
- maxxxxx 8y ago
  A Betriebsrat is certainly a very good tool to keep some balance in the power structures of a company. And German companies have done very well with this structure.
- jakoblorz 8y ago
  "On the assumption that the primary goal of employers is to maximise profits in the interests of shareholders, codetermination can reorient the company's goals in the interests of workers. A better balance may be struck so that the company interests are not so one sided. For unions, codetermination is part of democratising the economy. It is also a way for workers to better the terms and conditions of their contracts in an orderly and regulated way." [1] This is a 100% match to the remarks made in the article. [1]https://en.wikipedia.org/wiki/Codetermination_in_Germany#Interests_of_workers https://en.wikipedia.org/wiki/Codetermination_in_Germany#Int...
- afterburner 8y ago
  As good a place as any to remind people German workers have 30 vacation days on average (in addition to 10 public holidays). Somehow the work gets done!
  - pimeys 8y ago
    And it's quite common to work 40 hours a week, sometimes even less. And get things done...
kauffj 8y ago
Since this article specifically cites Milton Friedman, it seems apropos to consider his son David's point that if workers were interested in owning their firms it would be fairly trivial to do. Excerpt from "The Machinery of Freedom", by David Friedman: > The socialists who advocate such institutions do object to our present society and would probably object even more to the completely capitalist society that I would like to see develop. They claim that the ownership of the means of production by capitalists instead of by workers is inherently unjust. > I think they are wrong. Even if they are right, there is no need for them to fight me or anyone else; there is a much easier way to achieve their objective. If a society in which firms are owned by their workers is far more attractive than one in which they are owned by stockholders, let the workers buy the firms. If the workers cannot be convinced to spend their money, it is unlikely that they will be willing to spend their blood. > How much would it cost workers to purchase their firms? The total value of the shares of all stocks listed on the New York Stock Exchange in 1965 was $537 billion. The total wages and salaries of all private employees that year was $288.5 billion. State and federal income taxes totalled $75.2 billion. If the workers had chosen to live at the consumption standard of hippies, saving half their after-tax incomes, they could have gotten a majority share in every firm in two and a half years and bought the capitalists out, lock, stock, and barrel, in five. That is a substantial cost, but surely it is cheaper than organizing a revolution. Also less of a gamble. And, unlike a revolution, it does not have to be done all at once. The employees of one firm can buy it this decade, then use their profits to help fellow workers buy theirs later. > When you buy stock, you pay not only for the capital assets of the firm—buildings, machines, inventory, and the like —but also for its experience, reputation, and organization. If workers really can run firms better, these are unnecessary; all they need are the physical assets. Those assets—the net working capital of all corporations in the United States in 1965—totalled $171.7 billion. The workers could buy that much and go into business for themselves with 14 months' worth of savings. > I do not expect any of this to happen. If workers wanted to be capitalists badly enough to pay that sort of price, many would have done so already.
- hammock 8y ago
  If workers overnight started saving half their after-tax income, effectively cutting consumption in half, what would happen to the stock price of these companies though? It would fall - so buying out the companies might take less than five years' savings - that is, if the workers don't get fired as a cost-cutting measure first!
whack 8y ago
Here's a non-paywall version: https://www.vox.com/2018/8/15/17683022/elizabeth-warren-accountable-capitalism-corporations https://www.vox.com/2018/8/15/17683022/elizabeth-warren-acco... And one key clause from the bill: > "More concretely, citizen corporations would be required to allow their workers to elect 40 percent of the membership of their board of directors." This is a bold proposal, and it's worth considering what consequences it's going to have. Companies are already wary of going public these days, with many unicorns staying private longer, and some public companies even going private again. This bill would sharply accelerate the trend for one very simple reason: A privately held corporation would now be much more valuable than a public corporation. A corporation run by leaders who are 100% focused on optimizing (long-term) shareholder profits, will generate more (long-term) profits than a board that's 40% worker-elected. By definition then, as soon as a private company goes public, they can expect an immediate valuation hit. As more and more companies go/stay private, to avoid the above hit, the accessibility of public markets becomes weakened. Right now, any average Joe from Main Street can invest his savings into Google stock, and participate somewhat in corporate success. Not so if companies decide to remain private instead. I think the intent behind the bill is in the right place. Mega-corps are strangling our democracy (see the recent article about Intuit lobbying against tax-filing-reform), and their successes are being enjoyed primarily by the 1%. But I think we need a different solution to this problem. Higher taxes on the 1%, a stronger social safety net, campaign-finance reform, and better enforcement of anti-trust laws, would be my preferred approach for tackling the current problems.
- ummonk 8y ago
  I don't think the bill checks whether a company is private or not. Merely whether it has $1 billion in revenues or not. So it doesn't directly affect whether a company will want to go public.
- kharms 8y ago
  >A corporation run by leaders who are 100% focused on optimizing (long-term) shareholder profits, will generate more (long-term) profits than a board that's 40% worker-elected. The same is true with a board that's focused on short-term shareholder value. I would argue that worker representation would lean towards the long-term vs. shareholders.
kwhitefoot 8y ago
The title should contain "US". Companies in many (most?) other countries are already accountably to a wider constituency.
econ4all 8y ago
The costs of healthcare and housing are far and away the largest dampers on the economy and the cause of inequality. Shareholder accountability might be something worth looking at but it also seems like a distraction for politicians who are incapable of tackling the real issues. Dear leftist politicians: please don't attack successful companies and sectors and stop stoking the populist fervor of your hippy base and proto-socialist newcomers and tackle the real issues of healthcare and housing costs which have proven market based solutions.
- prolikewh0a 8y ago
  As Union membership rises, inequality declines. Worker representation is exactly what's needed. Don't ever say worker representation isn't a "real issue" because it sure is. The 'successful company' is likely successful in your viewpoint because the profits never went to the WORKERS who did ALL OF THE WORK. https://www.epi.org/news/union-membership-declines-inequality-rises/ https://www.epi.org/news/union-membership-declines-inequalit...
  - econ4all 8y ago
    The more money is spent on healthcare and housing the less people have for everything else thus exasperating inequality. Labor unions hamper corporate options and flexibility and hopefully soon they will all be replaced by machines maybe that would finally make it clear to marxists how much of a commodity labor really is.
    - prolikewh0a 8y ago
      >The more money is spent on healthcare and housing the less people have for everything else thus exasperating inequality. Sure, I'm not going to disagree there. >Labor unions hamper corporate options and flexibility So? They no longer will have the option to screw over their workers with low wages and high cost benefits and I think that's an absolute win for the lower 80-90% of the country.
      - 8y ago
mfer 8y ago
While I can't find it now, there have been articles detailing how shareholder value is down now compared to periods prior to the rise in executive pay. Naming (marketing) and focus are really two different things. Are many companies accountable to shareholders? The large ones anyway. How many shareholders are engaged? The money distribution has been very much to executives. From Fortune[1]: > According to a new report on CEO pay from the Economic Policy Institute, > chief executives at those 350 companies made $15.6 million on average in > 2016—271 times what the typical worker earns. Though CEO compensation has > fallen slightly in the past few years, it has increased by more than 930% > since 1978. Theory is different from practice. [1] http://fortune.com/2017/07/20/ceo-pay-ratio-2016/ http://fortune.com/2017/07/20/ceo-pay-ratio-2016/
- deleted 8y ago
  [deleted]
spork12 8y ago
This is really more an issue for public companies than private companies. Public companies tend to make decisions that favor short term gains for shareholders in the upcoming quarter. It's a give and take, they initially get a lot more money to play around with going public, but then become handcuffed to chasing profits for their shareholders. Really though it should be up to companies to align themselves to whatever vision they have. Politicians should just stay out of it.
dnomad 8y ago
It will absolutely never happen in the US but similar ideas are floating around France where there is real support and likelihood of something happening before 2025. The Accountable Capitalism Act is too complicated. The remedy here is quite simple: * Tax share buy-backs into non-existence. All the available evidence indicates that corporate buy-backs help nobody but the corporate officers who authorize them. * Make corporate dividends into pass through transfers. In fact, consider giving corporations that pass on X% of their profits a tax break. * Severely lower taxes on options and share-in-kind salaries. This is probably the most important thing: you want to encourage corporations to pay their workers in equity. * Ridiculous executive compensation is a problem in theory but it doesn't really matter, frankly, how a corporation divides its income payments. The only way to generate meaningful wages and wage growth for specific workers is to strengthen those worker's negotiating power. That means stronger unions. There's a lot the government can do to support unions but a good start would be making union dues tax free. In fact the government should probably collect and distribute all union fees. It becomes a standard withholding. Codetermination where unions get board seats is also good and has worked wonders in Germany. * A Job Guarantee is perhaps the most effective solution but is somewhat radical. But there are incremental steps that could be taken in this direction. Tax breaks on worker training et al are the first step. There was a time, believe it or not, when corporations invested heavily in their workers. Today training is regarded as pure overhead and the result are workers that are, frankly, not that useful because they are over-specialized. The government should also provide tax credits (!) for personal expenditures a worker undertakes for their own training. This goes beyond expensive college courses: workers should be encouraged to attend conferences, seminars, workshops, buy books, and donate their skills in the service of charity. (Yes tax credits for open source.) Encouraging worker training and worker re-training through generous tax breaks would go a long way towards the structural unemployment that grips much of Europe. The massive inequality that's drowning the West isn't really a problem of of corporations abusing workers. The problem is the governments who have willingly decided to serve the corporations and abandon the workers (combined of course with the insane desire to not build new housing in their major cities). The result is the most slack labor market ever and wages that have gone nowhere for forty years while corporations hoard giant useless piles of cash.
ucaetano 8y ago
But they aren't. They are accountable to society through laws, regulations and taxation, and to their employees through labor laws.
- maym86 8y ago
  This would be another labour law to increase accountability.
grondilu 8y ago
> Corporate profits are booming, but average wages haven’t budged over the past year. Why would they? Wages reward work. Profits have nothing to do with this.
whytheam 8y ago
Companies should be owned and democratically controlled by the workers.
pdonis 8y ago
The root problem isn't that companies are only accountable to shareholders. The root problem is that the shareholders of the large companies that are causing the income inequality the article refers to are not individuals any more; they're mutual funds and other financial institutions, i.e., other corporations.
chatmasta 8y ago
Thankfully there’s no chance this bill will ever pass with the current Congress, and even if it did, the Supreme Court would likely strike it down on account of state’s rights. It’s a bill trying to solve the wrong problem with the wrong solution. What value does workers electing their directors add for anybody? Firstly, the idea that director appointments should be political is patently absurd — a directorship is a job with well defined requirements and expectations, which the majority of workers are often completely unqualified to judge. Secondly, what right does the federal government have to dictate the internal governance of corporations? (Answer: explicitly none, as per the tenth amendment of the constitution.) This is such an awful, awful idea. One only needs to look at the government itself to see what happens when leaders are elected, not appointed. There’s a reason the private sector has a reputation for success and efficiency and the government does not... the idea of executives being elected by democratic process is so scary it’s almost comical. Disclaimer: I am extremely skeptical of the motives of Elizabeth Warren and hope she doesn’t come anywhere close to the White House
- prolikewh0a 8y ago
  >What value does workers electing their directors add for anybody? It provides workers say in what they do, since the workers do LITERALLY ALL THE WORK. The shareholders do literally no work in a quest for profit at the expense of the people who DO THE WORK. The company/business cannot survive without workers, they are the most important part. Have some solidarity for your fellow people. It's truly sickening that anyone would think workers shouldn't have any say at all and should just be useless cogs in the machine getting all representation gutted year after year so a few people can massively profit at the expense of everyone else.
  - chatmasta 8y ago
    I recognize the problem, but I’m very skeptical that the solution is a democratic process to elect directors. It optimizes for the completely wrong qualities necessary for a directorship, and I could easily see it hurting the workers more than helping them. What I find amusing is that the same people who support this bill are upset that Trump was elected through a democratic process. Many of these supporters would say the democratic process failed the American people. So why would they want to apply the same framework to corporate governance? It seems a bit hypocritical to be honest. The workers are free to start their own company whenever they want, btw.
quotemstr 8y ago
Yes, companies should be accountable to their owners, who in many cases are shareholders. Property ownership is what aligns incentives toward the maintenance and improvement of infrastructure, which in the end benefits us all. There's no sin in profit. When you strip property owners of control over their property and give control to people with no skin in the game, you misalign incentives and contribute to bad decision making and eventual decay arising from the accumulated consequences of bad decion making. If you think companies make bad decisions now, just wait until they're legally obligated to obey people who don't give a damn about the company's survival and who want to hijack the effort for stupid ideological and status signaling games. Utopian projects that amount to taking stuff from property owners and giving it to ideologues never work. They usually end up generating nothing but heaps of bodies.
- pjc50 8y ago
  > no skin in the game The presumption that people who spend 40+ hours a week of their lives there, and are dependent on the company for their income and healthcare have "no skin in the game" is odd.
  - quotemstr 8y ago
    The sort of person advocating employee control, in my very direct experience, comes to take the company's profitability for granted and wants to push the company in unprofitable directions for reasons that are personal, political, and ultimately emotional. I've seen this pattern play out too many times to believe the idea that someone who merely works at a company (and who can move to another) cares nearly as much about success as someone who built the company, or at least whose fortune is riding on it.
    - mfringel 8y ago
      I know people who were exactly not like that. Anecdotes cancel out. Do you have a point, or a strawman?
    - pjc50 8y ago
      Conversely, in a publicly traded company if you don't like the way it's being run you can exit your position with the press of a button.
extralego 8y ago
In other words, Marxism. You will downvote, but this was his central recommendation.
- genericid 8y ago
  I'm sure you have a source for that?
  - dhakker 8y ago
    I can’t tell if you’re serious, but in the case you are: It would be hard to find or read any serious writings of Marx that doesn’t espouse this idea. Das Kapital is essentially nothing but an elaboration of why workers should control the means of production. Most of Marx’s influential work was academic, and Europeans generally understand that his legacy lives in the the laws described here. Dissenters usually highlight the early stuff like Capitalist Manifesto; the equivalent of a student protest flyer. But this is terribly short-sighted and misrepresents his impact on European economics and law. He is the one of the most studied men of the 19th century for a reason. And the only ultimate recommendation Marx made with confidence in his academic work was exactly that workers own the means of production by way of democracy. He was something of a democracy absolutist and basically called out liberal capitalist economies for encouraging democracy in every part of society except for the workplace. There is really not anything more Marxist than giving more control to workers.
    - genericid 8y ago
      I meant that Marx did not advocate codetermination, as in, leaving most control to the capitalists.
      - dhakker 8y ago
        That’s definitely debatable. Marx was far from clueless about the benefits of capitalism. We need to recognize Marx was not against leadership. He was simply for democracy. He was intentionally vague in his prescriptions, and increasingly so in the academic work his legacy is built on. It’s more accurate to say he simply accepted the challenges of democratic means of production instead of denying them, because he thought the latter as immoral and ultimately harmful to society, due to the resulting deterioration of what he called modes of production. He was a proponent of technology, celebrated innovation, and fully acknowledged that capitalism systemically enouraged their existence. He even wrote about the importance of capitalism to art. Marx lived in a time and place of agregious social malpractice in the name of capitalism. His conceptions did not lack nuance, but they did evoke urgency. And rightfully so.
habosa 8y ago
This sounds like a great idea, let's take it a little further and spread some equity around. If you come in every single day and spend the best hours of your life working towards a company's goals, why shouldn't you share at all in the success of the company if it succeeds? Some allotment of shares or options per hour worked would not only help share financial gains but also align interests and spread voting power. It sort of achieves Warren's idea without a new charter. If your employees are the shareholders then you serve your employees.
wyldfire 8y ago
The Long-term Stock Exchange (LTSE) [1] is an interesting proposal. It gives greater weight to the duration a shareholder has held the shares. IIRC it also had incentives for companies to reduce ludicrous executive compensation. [1] https://ltse.com/ https://ltse.com/ [2] https://www.bloomberg.com/view/articles/2017-10-16/the-long-term-stock-exchange-is-worth-a-shot https://www.bloomberg.com/view/articles/2017-10-16/the-long-... [3] https://qz.com/704657/eric-ries-ltse-long-term-stock-exchange/ https://qz.com/704657/eric-ries-ltse-long-term-stock-exchang...
bumholio 8y ago
If 40% of the board is selected by the employees, I expect an intense political power struggle over compensation and automation, because continued employment and the paycheck are the paramount concerns of the employees, that by far trump any other social responsibility yadda yadda. It's as if all employees have received equity by force from the business owners, and they can cash out dividends every month regardless of marketplace performance. This will tend to form a caste system, where existing employees are strongly favored over potential new hires, with impact in unemployment figures, just like in Europe. It will also reduce the adaptability of the firm - any reorganization that involves layoffs is out of the question. Again, just like Europe, a stronger safety net and worker stability at the price of lower national competitiveness.
- genericid 8y ago
  You must be talking about a different Europe than the one I live in.
  - Joky 8y ago
    I relate fairly well to the Europe I lived in for 30y, YMMV
ummonk 8y ago
It's interesting that we work in an industry where employees are naturally given out a share of the company, but this share is structured so as to give them zero legal power over, e.g., the composition of the board or company decisions in general. It is merely there to give employees a claimed share in the future financial success of the company (I say claimed because some companies have terms such as clawback provisions that make the stock worthless - check out Skype for example). While many startups do informally have heavy involvement of employees in decision-making, others do not. It would be an interesting experiment to have a startup where employees who have vested and exercised shares get to elect their own board representatives.
zaroth 8y ago
We already have a dwindling supply of decent public companies. Regulations like this, and the CA bill mandating gender diversity hires for the Board of Directors, both would put additional downward pressure on the number and quality of public companies. Make it cheaper for companies to grant stock to their rank-and-file employees if you want employees to have more skin in the game. Leave the prescriptive governance out of it.
- mercutio2 8y ago
  Skin in the game is unrelated to a voice in decision making. This would increase worker representation, more employee stock ownership doesn’t do that.
jakoblorz 8y ago
This is basically the discussion between Shareholder Value vs Stakeholder Value https://www.naturalinvestments.com/blog/shareholder-value-vs-stakeholder-value/ https://www.naturalinvestments.com/blog/shareholder-value-vs...
rdlecler1 8y ago
Companies should be accountable to stakeholders.
r_smart 8y ago
Why do people always seem to forget that that 'Shareholders' frequently means pension funds for retired workers? This accounts for a pretty large pie of 'Shareholders' and many of them are struggling with unfunded liabilities, despite companies ruthless pursuit of profits on their behalf, that need to be made up somewhere (higher taxes or reduced payments).
- mfringel 8y ago
  It appears you're conflating two things. 1. "Pension funds", which include stuff like TIAA-CREF, who administer 401(k)-like plans for tax-exempt organizations. Those are definitionally fully funded because the annuities that retirees receive are only based on the money they put in over time. 2. "Pensions" as in the old-school corporate-owned "you work for us for n years and then we give you an annuity for the rest of your life, based on a percentage of ending salary." Those have a lot of problems with funding, for a load of reasons including life expectancy, and because bankruptcy relieves companies of a lot of those obligations. Either way, a shareholder owning a comparatively tiny amount of stock has neither a duty nor the impetus to align their interests with that of the corporation in which they hold stock.
  - r_smart 8y ago
    >It appears you're conflating two things. I probably am :) I'm definitely guilty of playing loose with my words. I was thinking of all of the various pensions. But as far as unfunded liabilities go, I was thinking of public employee pensions, where the amount they get out is not at all what they've paid in, and many (most?) of the various public pension programs are paying into the pensions to cover shortfalls from their investment portfolios. Many of them are looking at large amounts of financial liability in the future they don't currently have a budget for paying as I understand it. >Either way, a shareholder owning a comparatively tiny amount of stock has neither a duty nor the impetus to align their interests with that of the corporation in which they hold stock. I make no argument about what anyone should or shouldn't do. My point is that I think a lot of people picture four or five guys leering at each other around a table when they talk about shareholders, but in reality there are a lot of small fish with a vested interest in companies getting them the best return they can on their investment because they're relying on those returns to pay their expenses during the fixed income period of their life.
maym86 8y ago
Unions and worker ownership can help make a company actually consider the workers rather than just profit. In the US the balance has gone so far in the direction of treating low wage workers as disposable resources that any step to improve worker power is a good thing. Even if this bill passes the system would still favour the owners but there could be a little more consideration of the employees. The profit comes from the labour of people who work for the company. Any profit it makes is the difference between what their true labour is worth and what they are paid. So unless the owners are adding billions in value by themselves they are paying people less than the true value of their work. The extent at which this happens is where some ethical issues lie. If you keep wages low while making large profit there is a point of view that you are ripping off your workers and hopefully an extra voice at the top of the company can help here and emphasize some more consideration of worker needs.
bb2018 8y ago
I am not a fan of Warren or Bernie would do have some practical questions for how this might function for someone who believes this is a good idea. I am skeptical but open-minded. - Does every employee get an equal vote? Is it weighted at all by seniority, hours worked, salary? In a company like Starbucks where most employees are baristas what would stop them from joining forces with a small number of investors and looting the company's assets? -Do employees get a vote if they are contractors? Could a company simply set up hundreds of shell corporations and hire those corporations to prevent employee votes? If not, would you get a vote at every company you contract for? -Is there any concern that this could lead to a slowdown of new hiring? Right now a company may make 1B in income in a year and decide to invest the majority of it to open new locations or expand business. Do we think this would ever happen under this system - or would that money be given as short term profit? Would employees not want expansion which could possible benefit "the corporation" in the long run because it would cut into their bonus that year.
furbyhat 8y ago
Companies are an organization of human beings. So if companies are not accountable to shareholders, employees, suppliers and customers only. Then who are they accountable to? Say I own a small store selling fruit. I'm accountable already to: - those buying my food - my suppliers whom I get it grown from - to the licensing area - to the land owner - to myself - to my employees - to anyone who risked their money and sweat equity (owners) This article set up a strawman since companies are never Just accountable to shareholders as you can see.
methehack 8y ago
While I'm not sure of the mechanics of a lot of what's outlined here, and I'm especially not sure about the board of directors part, I think the idea of the "benefit corporation" could be a real game changer. Currently, as you probably know, the management of a public company has a fiduciary duty to maximize shareholder value. What's funny about this is that, in doing so, management may undermine every other _value_ the shareholders have -- and, in fact, is duty-and-legally-bound to do so if it increases shareholder value as measured in money. A legal framework like this gives management a way to maximize not only shareholder value but shareholder values. Without it, there's no legal/ethical basis do so. Companies sometimes act like they're about shareholder values, and to some degree maybe even meekly are, but, without a legal basis like this, that 's all marketing, in essence. I've always thought it was amazing that we create these institutions (companies) that don't represent any of the values of the people in them. It's as if we've played a trick on our humanity by given it to an institution that itself isn't human nor values anything humans value despite being made up entirely of humans.
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dontbereetard 8y ago
NO SHIT???
dontbereetard 8y ago
Yeah no shit? Its been a general consensus of anyone that isn't a rich CEO that this has been a bad practice. It is environmentally impactful and socially disruptive so that the few that understand the true nature of the system can exploit it at all costs, while maintaining a public image of not.
tim333 8y ago
While Warren's intentions are good it sounds like it could be messy in practice. "The new charter requires corporate directors to consider the interests of all major corporate stakeholders." With the possibility to sue if they don't. I could see no end of legal cases - workers suing for more pay or less layoffs, suppliers suing if they switch suppliers and so on.
neonate 8y ago
http://archive.is/bGmKh http://archive.is/bGmKh
riemannzeta 8y ago
I love the intent. I often have the sense that decisionmaking at big corporations manifests a well-functioning prefrontal cortex and no limbic system -- i.e., somewhere on the socipathy/psycopathy spectrum. It's interesting to note that some of the most successful corporations have already moved in this direction on a voluntary basis. Regardless of whether or how this particular initiative is received by Congress and the Courts, any big corporation that wants to grow long-term will have to move in this direction. In that sense, this is not necessarily a competition-friendly proposal. On the other hand, it's the whippersnappers that are growing fast by cutting corners that are likely to be hurt the worst. Personally, I prefer to live in a world of socially-responsible for-profit goliaths with Schumpeterian competition from startups over a world of free-for-all, dog-eat-dog competition in which bad values drive out the good. Lots of things to like about this proposal.
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bassman9000 8y ago
The problem may get worse, because executives have a strong financial incentive to prioritize shareholder returns Well, yes. They own the company. And they're accountable to US law while doing so. What's the issue? Why this socialist push now? Workers should demand a share of the company, no doubt, and leave if not granted.
makecheck 8y ago
I see a lot of criticism about particular parts of this one bill that seem to skip right past the larger potential value here: worker rights are actually being discussed. Just having that discussion is a step forward and should be encouraged, to improve whatever we can. Furthermore, nothing is ever perfect so don’t lose a chance at some benefit just because not all of this particular bill may be practical.
kapauldo 8y ago
The problem is real. Not sure this is the best solution, but better than nothing.

323 points by mji 8y ago

Sounds a bit like the German works council system [1] that gives workers some representation in management. [1] https://en.m.wikipedia.org/wiki/Works_council https://en.m.wikipedia.org/wiki/Works_council

knuththetruth 8y ago
Which was made explicitly illegal by US labor law in the face of rising union power to prevent workers from having this kind of say.
- pjc50 8y ago
  Wow - under what legislation?
  - knuththetruth 8y ago
    Taft-Hartley
smileysteve 8y ago
While it might be considered communist / socialist; I'd be interested in a tax policy that encouraged companies to ~X% worker owned.
- fabianhjr 8y ago
  That could be encouraged trough mutualization programs.

Cthulhu_ 8y ago

non paywall version: http://archive.is/bGmKh http://archive.is/bGmKh

dahdum 8y ago

Considering how this would decimate the market and cause large amounts of frivolous lawsuits, I can't imagine this passes even pared down. She's announcing this merely to pad her resume before running in 2020. It doesn't have to be feasible, just needs to sound good.

toomuchtodo 8y ago
The US equities market value is already highly inflated. It will be coming down regardless over the next decade.
- chollida1 8y ago
  > The US equities market value is already highly inflated. It will be coming down regardless over the next decade. I'll take the other side of that bet if you are saying that the market will be worth less in 10 years time than it is now. If on the other hand you are saying the market will go down sometime in the next 10 years then, we'll that's not really a statement worth making:) That's like saying I predict that it will be colder than it is today sometime in the next 10 years.
  - toomuchtodo 8y ago
    Based on current P/E ratios, the higher chances of an inverted yield curve, companies going private or not going public, and market analysis from folks like Vanguard about future returns being muted, my opinion is that most equities returns have been pulled forward, risk-adjusted returns will be comparable to bonds, and that there will both be a market pullback in the foreseeable future with total market value moving roughly sideways from today's highs for quite a while.
    - tanderson92 8y ago
      As a point of fact, the yield curve is not inverted (nor has it been for some time). Furthermore, forward PE ratios show returns far in excess of current government bond yields.

makotech222 8y ago

Hah, its almost like the people who do the labor should be the ones who decide what to do with the surplus they produce, instead of people who inherit tons of wealth and choose to buy up ownership of businesses. Elizabeth Warren has stated before that she is a capitalist. Which means that ownership of companies is held entirely by monied interests, never by workers.

Y_Y 8y ago

This is a fantastic idea, and I can't see how anyone (other than the people who stand to lose directly) could oppose it. All the same I know that they will. Consumers are anything but rational, and that is by design. The ultra-rich know well the value of hearts and minds, and that it's quite possible to spend money convincing (at least some) people of whatever you'd like them to believe. Maybe it's just because I'm a pinko-European, but in the unlikely event of this succeeding, I think it could really be the start of the pendulum swinging in the right direction in global economics.

Cthulhu_ 8y ago
> [...] I can't see how anyone (other than the people who stand to lose directly) could oppose it. And there you have it; the shareholders and CEO would stand to lose directly, they have a huge amount of money (and they're both national and international players; a foreign investor would give less of a shit about US workers), they're in politics (directly or paying for it), etc. I hope this gets traction, but I'm cynical, and I'm confident the US is already an oligarchy in the pockets of those that made 7 trillion out of their 250 billion investment.
klenwell 8y ago
Article was flagged out first time I brought it up. It's back now. But you get the point.
- rectang 8y ago
  I hope we can have a civil HN discussion about this bill. I generally like Warren-style capitalism but am not sure yet what to think of this. When an article (or comment) gets flagged, HN accounts with sufficient karma may have the opportunity to "vouch". I used that once for this article already. This doesn't guarantee that the article will stay for long since there's an HN algo which tends to shuffle off pages with a lot of downvoting and flagging. (Which I think is a really nice feature, by the way. Thanks to the moderators for their good sense and hard work.) ETA: And that also means that if you want to keep this discussion alive for a while, relentlessly downvoting posts which don't agree with your bent, even when civil and well-argued, is counterproductive. There are some great comments arguing against Warren right now that I hope will be rescued from the greys.

onetimemanytime 8y ago

>>In the four decades after World War II, shareholders on net contributed more than $250 billion to U.S. companies. But since 1985 they have extracted almost $7 trillion. That’s trillions of dollars in profits that might otherwise have been reinvested in the workers who helped produce them. Nonsense. So tax them more on dividends, if that's needed. Why add more lawsuits from anyone on why AT&T bought x company when "it's not good for the common good"....whatever that is.

chollida1 8y ago

In this case the author matters a bit. It's Elizabeth Warren, the congress woman who is putting forth a bill to "reign in" wall street. I'm a fan of her and I like the parts of the bill that I've seen. I think we do need more regulation on wall street. > That shift has had a tremendous effect on the economy. In the early 1980s, large American companies sent less than half their earnings to shareholders, spending the rest on their employees and other priorities. But between 2007 and 2016, large American companies dedicated 93% of their earnings to shareholders. Because the wealthiest 10% of U.S. households own 84% of American-held shares, the obsession with maximizing shareholder returns effectively means America’s biggest companies have dedicated themselves to making the rich even richer. One of the best things I learned from becoming an engineer was the concept of feedback loops and how you need to constantly monitor and dampen them when they start to get out of control. The above certainly illustrates how the wealth gap started to increase over the past 30 years. I'm not sure what the correct ratio of how to payout mopey to employees vs owners but you could start by looking at what ratio public hedge funds or investment banks payout(like Virtu or GS). > In the four decades after World War II, shareholders on net contributed more than $250 billion to U.S. companies. But since 1985 they have extracted almost $7 trillion This is just intentionally obfuscating. What percentage of the dividends paid out where reinvested automatically. What percentage of the cash paid out in stock buy backs went right back into the market, you cant' tell because in the first line she used net contributions, but int he second she only mentions the money flowing out but not the net. It actually could be net positive but that wouldn't fit her narrative. > My bill also would give workers a stronger voice in corporate decision-making at large companies. Employees would elect at least 40% of directors. I really like this idea. I assume the directors would be qualified people and not just a random employee. To be honest the largest issue I see int he markets now is the dictator model where a single founder controls the voting. We've only seen this model in tech work during the bull tech market of 2004-present. 2008 was down but tech still did much better than most other asset classes. What happens when tech has another 2001 and people want Mark Zuckerberg fired or they want Google to focus on their bread and butter instead of the moon shots that cost them money, or Snap to, well do anything to earn the valuation that they and promises that they fooled everyone with.

castlecrasher2 8y ago

castlecrasher2 8y ago

>American corporations exist only because the American people grant them charters. I get what she's saying here but it's not exactly the cause. A counter-argument to this premise could take this line and re-write it as "American corporations exist only because shareholders/VC firms invested capital in them." And while I don't disagree that CEO pay is nutso today I'm not convinced that employee-elected directors is the way to go. My initial reaction is I don't want to work under populist execs vying for employee votes; I think we get enough political speak from them as it is.

wtvanhest 8y ago
I don't think it would be bad to have an elected board member. It would provide input into decisions that have the potential to negatively impact employees.
- castlecrasher2 8y ago
  I don't disagree with you, I just think the obvious connection between these elected directors' compensation and how well-liked they are would mean less-qualified, less-effective leaders on average.
wffurr 8y ago
>> populist execs vying for employee votes The alternative to democracy is feudalism, which is basically what we have now. You might hold your nose and say "politics" or "populism" but this is how you as an employee can exercise power in the workplace. I certainly prefer "populist execs vying for employee votes" to "brown nosing employees vying for exec favor".
- Brushfire 8y ago
  Surely you aren't serious. Feudalism required working for the landowners near where you lived. In our society you can change jobs, start your own business, move, do freelance work, or not work at all if you so choose. I agree there are problems with the current system, but to equate it to feudalism is insanity.

creaghpatr 8y ago

No chance this will pass and the potential economic downstream effects could be pretty extreme, but I think there are some interesting nuggets in there that would make for good corporate stewardship ideas. But the premise that companies are only accountable to shareholders is false (or in this case, editorialized)- companies are accountable to the government, and more recently you have companies like FB and SNAP that are only truly accountable to voting shareholders and can choose to not maximize profit for whatever reason. Lastly, if employees are electing 40% of the directors, I would expect that to politicize the hiring process unnecessarily, and likely lead to far more unionization.

EliRivers 8y ago

This idea that companies should be all about shareholder value is so recent, but it seems to have infected minds so thoroughly that people even assume there are laws enforcing it. To quote the US Supreme Court: "Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not."

castlecrasher2 8y ago
>people even assume there are laws enforcing it Aren't there? I was under the impression that shareholders can and do file lawsuits against directors and executive leadership. A cursory Google search suggests that this is true.
- EliRivers 8y ago
  I was under the impression that shareholders can and do file lawsuits against directors and executive leadership. A cursory Google search suggests that this is true. I'm certainly not suggesting that shareholders can't file lawsuits. Anyone can file lawsuits. Do you mean lawsuits specifically because companies didn't seek to maximise shareholder value? A cursory google search also suggests it's not true. https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co... https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=2311&context=facpub https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?arti... US Supreme Court opinion: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.” and so on. Now, it's true that laws reflect society, and if enough people believe something to be correct for long enough, the law will change. It's certainly true that in recent years we've heard more people, more loudly proclaim, that shareholder value is the whole point and should be the law. We've certainly seen legals cases exploring this. Nonetheless, companies have a number of obligations and responsibilities, and those they hold to their shareholders are but some among many.
  - castlecrasher2 8y ago

phkahler 8y ago

>> By 1997 the Business Roundtable declared that the “principal objective of a business enterprise is to generate economic returns to its owners.” I've never agreed with that. As a private company you can be in business for whatever reason you want. Maintaining financial viability seems to be necessary, but beyond that "profit" or return for anyone is not obviously an objective. Granted, you'll probably have trouble raising money if there's nothing in it for investors but does that mean they have to become the one and only priority? I often think a CEO needs to state what they're doing and the investors should decide if they think the plans and objectives of the company (and those running it) are a good investment. Investors can take it or leave it - for what it is. That seems to be what Google did to some extent. I also say that if the only goal of a company is to create returns, then every company that isn't in a higher profit industry should probably liquidate and use the money to start a hedge fund, or invest in a company that is more profitable. In other words, if your company makes small margins making some widgets, your investors would get better returns if you sell everything and invest in apple. This is a joke of course, but it makes my point. It's up to the company to define what it's objectives are, and it's up the investors to decide what they want to invest in based on those stated objectives of the companies.

tribesman 8y ago
> Historically, board appointed the CEO and most board members are shareholder. Having incentive aligned with the board earned you loyality of the board members and more compensation if you could trick the market into believing your fairytale and still juice out the max return.
deelowe 8y ago
But the CEO doesn't own the company, the investors do, so why would the CEO be the one to state the goals leaving investors to "take it or leave it"?
- neom 8y ago
  Because if you don't like my plan you can go find a new CEO. And finding a new CEO is harder than it looks, especially in big business. CEOs should have a lot of leverage with their board, if they don't, they're cooked anyway. I have said to the external shareholders many times that their opinion of putting the business first and my opinion of putting the business first may differ because, unlike the investors, i'm responsible for the internal shareholders as well, and need to balance their views and opinions.

ailideex 8y ago

They are not - they are also accountable to jurisdiction in which they operate. So problem solved.

Brushfire 8y ago

This will just lead to more private companies that average Joe doesn't get to benefit from. Creating rules for private companies would take a refactor of our entire legal system.

lhopki01 8y ago

This has some ideas that are similar to what happens in Germany. https://en.wikipedia.org/wiki/Codetermination_in_Germany https://en.wikipedia.org/wiki/Codetermination_in_Germany Worker representation at the board level is good for companies as well because it can encourage pay restraint when the company really can't afford a pay rise. A board of very rich people telling you the company can't afford a pay rise for you is very different from some of your fellow workers saying the company can't afford a pay rise. The German law goes a lot further than this law does though since it applies to all companies with over 500 employees. Considering Germany is an economic powerhouse this law probably isn't harming the economy.

maxxxxx 8y ago
A Betriebsrat is certainly a very good tool to keep some balance in the power structures of a company. And German companies have done very well with this structure.
jakoblorz 8y ago
"On the assumption that the primary goal of employers is to maximise profits in the interests of shareholders, codetermination can reorient the company's goals in the interests of workers. A better balance may be struck so that the company interests are not so one sided. For unions, codetermination is part of democratising the economy. It is also a way for workers to better the terms and conditions of their contracts in an orderly and regulated way." [1] This is a 100% match to the remarks made in the article. [1]https://en.wikipedia.org/wiki/Codetermination_in_Germany#Interests_of_workers https://en.wikipedia.org/wiki/Codetermination_in_Germany#Int...
afterburner 8y ago
As good a place as any to remind people German workers have 30 vacation days on average (in addition to 10 public holidays). Somehow the work gets done!
- pimeys 8y ago
  And it's quite common to work 40 hours a week, sometimes even less. And get things done...

kauffj 8y ago

Since this article specifically cites Milton Friedman, it seems apropos to consider his son David's point that if workers were interested in owning their firms it would be fairly trivial to do. Excerpt from "The Machinery of Freedom", by David Friedman: > The socialists who advocate such institutions do object to our present society and would probably object even more to the completely capitalist society that I would like to see develop. They claim that the ownership of the means of production by capitalists instead of by workers is inherently unjust. > I think they are wrong. Even if they are right, there is no need for them to fight me or anyone else; there is a much easier way to achieve their objective. If a society in which firms are owned by their workers is far more attractive than one in which they are owned by stockholders, let the workers buy the firms. If the workers cannot be convinced to spend their money, it is unlikely that they will be willing to spend their blood. > How much would it cost workers to purchase their firms? The total value of the shares of all stocks listed on the New York Stock Exchange in 1965 was $537 billion. The total wages and salaries of all private employees that year was $288.5 billion. State and federal income taxes totalled $75.2 billion. If the workers had chosen to live at the consumption standard of hippies, saving half their after-tax incomes, they could have gotten a majority share in every firm in two and a half years and bought the capitalists out, lock, stock, and barrel, in five. That is a substantial cost, but surely it is cheaper than organizing a revolution. Also less of a gamble. And, unlike a revolution, it does not have to be done all at once. The employees of one firm can buy it this decade, then use their profits to help fellow workers buy theirs later. > When you buy stock, you pay not only for the capital assets of the firm—buildings, machines, inventory, and the like —but also for its experience, reputation, and organization. If workers really can run firms better, these are unnecessary; all they need are the physical assets. Those assets—the net working capital of all corporations in the United States in 1965—totalled $171.7 billion. The workers could buy that much and go into business for themselves with 14 months' worth of savings. > I do not expect any of this to happen. If workers wanted to be capitalists badly enough to pay that sort of price, many would have done so already.

hammock 8y ago
If workers overnight started saving half their after-tax income, effectively cutting consumption in half, what would happen to the stock price of these companies though? It would fall - so buying out the companies might take less than five years' savings - that is, if the workers don't get fired as a cost-cutting measure first!

whack 8y ago

Here's a non-paywall version: https://www.vox.com/2018/8/15/17683022/elizabeth-warren-accountable-capitalism-corporations https://www.vox.com/2018/8/15/17683022/elizabeth-warren-acco... And one key clause from the bill: > "More concretely, citizen corporations would be required to allow their workers to elect 40 percent of the membership of their board of directors." This is a bold proposal, and it's worth considering what consequences it's going to have. Companies are already wary of going public these days, with many unicorns staying private longer, and some public companies even going private again. This bill would sharply accelerate the trend for one very simple reason: A privately held corporation would now be much more valuable than a public corporation. A corporation run by leaders who are 100% focused on optimizing (long-term) shareholder profits, will generate more (long-term) profits than a board that's 40% worker-elected. By definition then, as soon as a private company goes public, they can expect an immediate valuation hit. As more and more companies go/stay private, to avoid the above hit, the accessibility of public markets becomes weakened. Right now, any average Joe from Main Street can invest his savings into Google stock, and participate somewhat in corporate success. Not so if companies decide to remain private instead. I think the intent behind the bill is in the right place. Mega-corps are strangling our democracy (see the recent article about Intuit lobbying against tax-filing-reform), and their successes are being enjoyed primarily by the 1%. But I think we need a different solution to this problem. Higher taxes on the 1%, a stronger social safety net, campaign-finance reform, and better enforcement of anti-trust laws, would be my preferred approach for tackling the current problems.

ummonk 8y ago
I don't think the bill checks whether a company is private or not. Merely whether it has $1 billion in revenues or not. So it doesn't directly affect whether a company will want to go public.
kharms 8y ago
>A corporation run by leaders who are 100% focused on optimizing (long-term) shareholder profits, will generate more (long-term) profits than a board that's 40% worker-elected. The same is true with a board that's focused on short-term shareholder value. I would argue that worker representation would lean towards the long-term vs. shareholders.

kwhitefoot 8y ago

The title should contain "US". Companies in many (most?) other countries are already accountably to a wider constituency.

econ4all 8y ago

The costs of healthcare and housing are far and away the largest dampers on the economy and the cause of inequality. Shareholder accountability might be something worth looking at but it also seems like a distraction for politicians who are incapable of tackling the real issues. Dear leftist politicians: please don't attack successful companies and sectors and stop stoking the populist fervor of your hippy base and proto-socialist newcomers and tackle the real issues of healthcare and housing costs which have proven market based solutions.

prolikewh0a 8y ago
As Union membership rises, inequality declines. Worker representation is exactly what's needed. Don't ever say worker representation isn't a "real issue" because it sure is. The 'successful company' is likely successful in your viewpoint because the profits never went to the WORKERS who did ALL OF THE WORK. https://www.epi.org/news/union-membership-declines-inequality-rises/ https://www.epi.org/news/union-membership-declines-inequalit...
- econ4all 8y ago
  The more money is spent on healthcare and housing the less people have for everything else thus exasperating inequality. Labor unions hamper corporate options and flexibility and hopefully soon they will all be replaced by machines maybe that would finally make it clear to marxists how much of a commodity labor really is.
  - prolikewh0a 8y ago
    >The more money is spent on healthcare and housing the less people have for everything else thus exasperating inequality. Sure, I'm not going to disagree there. >Labor unions hamper corporate options and flexibility So? They no longer will have the option to screw over their workers with low wages and high cost benefits and I think that's an absolute win for the lower 80-90% of the country.
    - 8y ago

mfer 8y ago

While I can't find it now, there have been articles detailing how shareholder value is down now compared to periods prior to the rise in executive pay. Naming (marketing) and focus are really two different things. Are many companies accountable to shareholders? The large ones anyway. How many shareholders are engaged? The money distribution has been very much to executives. From Fortune[1]: > According to a new report on CEO pay from the Economic Policy Institute, > chief executives at those 350 companies made $15.6 million on average in > 2016—271 times what the typical worker earns. Though CEO compensation has > fallen slightly in the past few years, it has increased by more than 930% > since 1978. Theory is different from practice. [1] http://fortune.com/2017/07/20/ceo-pay-ratio-2016/ http://fortune.com/2017/07/20/ceo-pay-ratio-2016/

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spork12 8y ago

This is really more an issue for public companies than private companies. Public companies tend to make decisions that favor short term gains for shareholders in the upcoming quarter. It's a give and take, they initially get a lot more money to play around with going public, but then become handcuffed to chasing profits for their shareholders. Really though it should be up to companies to align themselves to whatever vision they have. Politicians should just stay out of it.

dnomad 8y ago

It will absolutely never happen in the US but similar ideas are floating around France where there is real support and likelihood of something happening before 2025. The Accountable Capitalism Act is too complicated. The remedy here is quite simple: * Tax share buy-backs into non-existence. All the available evidence indicates that corporate buy-backs help nobody but the corporate officers who authorize them. * Make corporate dividends into pass through transfers. In fact, consider giving corporations that pass on X% of their profits a tax break. * Severely lower taxes on options and share-in-kind salaries. This is probably the most important thing: you want to encourage corporations to pay their workers in equity. * Ridiculous executive compensation is a problem in theory but it doesn't really matter, frankly, how a corporation divides its income payments. The only way to generate meaningful wages and wage growth for specific workers is to strengthen those worker's negotiating power. That means stronger unions. There's a lot the government can do to support unions but a good start would be making union dues tax free. In fact the government should probably collect and distribute all union fees. It becomes a standard withholding. Codetermination where unions get board seats is also good and has worked wonders in Germany. * A Job Guarantee is perhaps the most effective solution but is somewhat radical. But there are incremental steps that could be taken in this direction. Tax breaks on worker training et al are the first step. There was a time, believe it or not, when corporations invested heavily in their workers. Today training is regarded as pure overhead and the result are workers that are, frankly, not that useful because they are over-specialized. The government should also provide tax credits (!) for personal expenditures a worker undertakes for their own training. This goes beyond expensive college courses: workers should be encouraged to attend conferences, seminars, workshops, buy books, and donate their skills in the service of charity. (Yes tax credits for open source.) Encouraging worker training and worker re-training through generous tax breaks would go a long way towards the structural unemployment that grips much of Europe. The massive inequality that's drowning the West isn't really a problem of of corporations abusing workers. The problem is the governments who have willingly decided to serve the corporations and abandon the workers (combined of course with the insane desire to not build new housing in their major cities). The result is the most slack labor market ever and wages that have gone nowhere for forty years while corporations hoard giant useless piles of cash.

ucaetano 8y ago

But they aren't. They are accountable to society through laws, regulations and taxation, and to their employees through labor laws.

maym86 8y ago
This would be another labour law to increase accountability.

grondilu 8y ago

> Corporate profits are booming, but average wages haven’t budged over the past year. Why would they? Wages reward work. Profits have nothing to do with this.

whytheam 8y ago

Companies should be owned and democratically controlled by the workers.

pdonis 8y ago

The root problem isn't that companies are only accountable to shareholders. The root problem is that the shareholders of the large companies that are causing the income inequality the article refers to are not individuals any more; they're mutual funds and other financial institutions, i.e., other corporations.

chatmasta 8y ago

Thankfully there’s no chance this bill will ever pass with the current Congress, and even if it did, the Supreme Court would likely strike it down on account of state’s rights. It’s a bill trying to solve the wrong problem with the wrong solution. What value does workers electing their directors add for anybody? Firstly, the idea that director appointments should be political is patently absurd — a directorship is a job with well defined requirements and expectations, which the majority of workers are often completely unqualified to judge. Secondly, what right does the federal government have to dictate the internal governance of corporations? (Answer: explicitly none, as per the tenth amendment of the constitution.) This is such an awful, awful idea. One only needs to look at the government itself to see what happens when leaders are elected, not appointed. There’s a reason the private sector has a reputation for success and efficiency and the government does not... the idea of executives being elected by democratic process is so scary it’s almost comical. Disclaimer: I am extremely skeptical of the motives of Elizabeth Warren and hope she doesn’t come anywhere close to the White House

prolikewh0a 8y ago
>What value does workers electing their directors add for anybody? It provides workers say in what they do, since the workers do LITERALLY ALL THE WORK. The shareholders do literally no work in a quest for profit at the expense of the people who DO THE WORK. The company/business cannot survive without workers, they are the most important part. Have some solidarity for your fellow people. It's truly sickening that anyone would think workers shouldn't have any say at all and should just be useless cogs in the machine getting all representation gutted year after year so a few people can massively profit at the expense of everyone else.
- chatmasta 8y ago
  I recognize the problem, but I’m very skeptical that the solution is a democratic process to elect directors. It optimizes for the completely wrong qualities necessary for a directorship, and I could easily see it hurting the workers more than helping them. What I find amusing is that the same people who support this bill are upset that Trump was elected through a democratic process. Many of these supporters would say the democratic process failed the American people. So why would they want to apply the same framework to corporate governance? It seems a bit hypocritical to be honest. The workers are free to start their own company whenever they want, btw.

quotemstr 8y ago

Yes, companies should be accountable to their owners, who in many cases are shareholders. Property ownership is what aligns incentives toward the maintenance and improvement of infrastructure, which in the end benefits us all. There's no sin in profit. When you strip property owners of control over their property and give control to people with no skin in the game, you misalign incentives and contribute to bad decision making and eventual decay arising from the accumulated consequences of bad decion making. If you think companies make bad decisions now, just wait until they're legally obligated to obey people who don't give a damn about the company's survival and who want to hijack the effort for stupid ideological and status signaling games. Utopian projects that amount to taking stuff from property owners and giving it to ideologues never work. They usually end up generating nothing but heaps of bodies.

pjc50 8y ago
> no skin in the game The presumption that people who spend 40+ hours a week of their lives there, and are dependent on the company for their income and healthcare have "no skin in the game" is odd.
- quotemstr 8y ago
  The sort of person advocating employee control, in my very direct experience, comes to take the company's profitability for granted and wants to push the company in unprofitable directions for reasons that are personal, political, and ultimately emotional. I've seen this pattern play out too many times to believe the idea that someone who merely works at a company (and who can move to another) cares nearly as much about success as someone who built the company, or at least whose fortune is riding on it.
  - mfringel 8y ago
    I know people who were exactly not like that. Anecdotes cancel out. Do you have a point, or a strawman?
  - pjc50 8y ago
    Conversely, in a publicly traded company if you don't like the way it's being run you can exit your position with the press of a button.

extralego 8y ago

In other words, Marxism. You will downvote, but this was his central recommendation.

genericid 8y ago
I'm sure you have a source for that?
- dhakker 8y ago
  I can’t tell if you’re serious, but in the case you are: It would be hard to find or read any serious writings of Marx that doesn’t espouse this idea. Das Kapital is essentially nothing but an elaboration of why workers should control the means of production. Most of Marx’s influential work was academic, and Europeans generally understand that his legacy lives in the the laws described here. Dissenters usually highlight the early stuff like Capitalist Manifesto; the equivalent of a student protest flyer. But this is terribly short-sighted and misrepresents his impact on European economics and law. He is the one of the most studied men of the 19th century for a reason. And the only ultimate recommendation Marx made with confidence in his academic work was exactly that workers own the means of production by way of democracy. He was something of a democracy absolutist and basically called out liberal capitalist economies for encouraging democracy in every part of society except for the workplace. There is really not anything more Marxist than giving more control to workers.
  - genericid 8y ago
    I meant that Marx did not advocate codetermination, as in, leaving most control to the capitalists.
    - dhakker 8y ago
      That’s definitely debatable. Marx was far from clueless about the benefits of capitalism. We need to recognize Marx was not against leadership. He was simply for democracy. He was intentionally vague in his prescriptions, and increasingly so in the academic work his legacy is built on. It’s more accurate to say he simply accepted the challenges of democratic means of production instead of denying them, because he thought the latter as immoral and ultimately harmful to society, due to the resulting deterioration of what he called modes of production. He was a proponent of technology, celebrated innovation, and fully acknowledged that capitalism systemically enouraged their existence. He even wrote about the importance of capitalism to art. Marx lived in a time and place of agregious social malpractice in the name of capitalism. His conceptions did not lack nuance, but they did evoke urgency. And rightfully so.

habosa 8y ago

This sounds like a great idea, let's take it a little further and spread some equity around. If you come in every single day and spend the best hours of your life working towards a company's goals, why shouldn't you share at all in the success of the company if it succeeds? Some allotment of shares or options per hour worked would not only help share financial gains but also align interests and spread voting power. It sort of achieves Warren's idea without a new charter. If your employees are the shareholders then you serve your employees.

wyldfire 8y ago

The Long-term Stock Exchange (LTSE) [1] is an interesting proposal. It gives greater weight to the duration a shareholder has held the shares. IIRC it also had incentives for companies to reduce ludicrous executive compensation. [1] https://ltse.com/ https://ltse.com/ [2] https://www.bloomberg.com/view/articles/2017-10-16/the-long-term-stock-exchange-is-worth-a-shot https://www.bloomberg.com/view/articles/2017-10-16/the-long-... [3] https://qz.com/704657/eric-ries-ltse-long-term-stock-exchange/ https://qz.com/704657/eric-ries-ltse-long-term-stock-exchang...

bumholio 8y ago

If 40% of the board is selected by the employees, I expect an intense political power struggle over compensation and automation, because continued employment and the paycheck are the paramount concerns of the employees, that by far trump any other social responsibility yadda yadda. It's as if all employees have received equity by force from the business owners, and they can cash out dividends every month regardless of marketplace performance. This will tend to form a caste system, where existing employees are strongly favored over potential new hires, with impact in unemployment figures, just like in Europe. It will also reduce the adaptability of the firm - any reorganization that involves layoffs is out of the question. Again, just like Europe, a stronger safety net and worker stability at the price of lower national competitiveness.

genericid 8y ago
You must be talking about a different Europe than the one I live in.
- Joky 8y ago
  I relate fairly well to the Europe I lived in for 30y, YMMV

ummonk 8y ago

It's interesting that we work in an industry where employees are naturally given out a share of the company, but this share is structured so as to give them zero legal power over, e.g., the composition of the board or company decisions in general. It is merely there to give employees a claimed share in the future financial success of the company (I say claimed because some companies have terms such as clawback provisions that make the stock worthless - check out Skype for example). While many startups do informally have heavy involvement of employees in decision-making, others do not. It would be an interesting experiment to have a startup where employees who have vested and exercised shares get to elect their own board representatives.

zaroth 8y ago

We already have a dwindling supply of decent public companies. Regulations like this, and the CA bill mandating gender diversity hires for the Board of Directors, both would put additional downward pressure on the number and quality of public companies. Make it cheaper for companies to grant stock to their rank-and-file employees if you want employees to have more skin in the game. Leave the prescriptive governance out of it.

mercutio2 8y ago
Skin in the game is unrelated to a voice in decision making. This would increase worker representation, more employee stock ownership doesn’t do that.

jakoblorz 8y ago

This is basically the discussion between Shareholder Value vs Stakeholder Value https://www.naturalinvestments.com/blog/shareholder-value-vs-stakeholder-value/ https://www.naturalinvestments.com/blog/shareholder-value-vs...

rdlecler1 8y ago

Companies should be accountable to stakeholders.

r_smart 8y ago

Why do people always seem to forget that that 'Shareholders' frequently means pension funds for retired workers? This accounts for a pretty large pie of 'Shareholders' and many of them are struggling with unfunded liabilities, despite companies ruthless pursuit of profits on their behalf, that need to be made up somewhere (higher taxes or reduced payments).

mfringel 8y ago
It appears you're conflating two things. 1. "Pension funds", which include stuff like TIAA-CREF, who administer 401(k)-like plans for tax-exempt organizations. Those are definitionally fully funded because the annuities that retirees receive are only based on the money they put in over time. 2. "Pensions" as in the old-school corporate-owned "you work for us for n years and then we give you an annuity for the rest of your life, based on a percentage of ending salary." Those have a lot of problems with funding, for a load of reasons including life expectancy, and because bankruptcy relieves companies of a lot of those obligations. Either way, a shareholder owning a comparatively tiny amount of stock has neither a duty nor the impetus to align their interests with that of the corporation in which they hold stock.
- r_smart 8y ago
  >It appears you're conflating two things. I probably am :) I'm definitely guilty of playing loose with my words. I was thinking of all of the various pensions. But as far as unfunded liabilities go, I was thinking of public employee pensions, where the amount they get out is not at all what they've paid in, and many (most?) of the various public pension programs are paying into the pensions to cover shortfalls from their investment portfolios. Many of them are looking at large amounts of financial liability in the future they don't currently have a budget for paying as I understand it. >Either way, a shareholder owning a comparatively tiny amount of stock has neither a duty nor the impetus to align their interests with that of the corporation in which they hold stock. I make no argument about what anyone should or shouldn't do. My point is that I think a lot of people picture four or five guys leering at each other around a table when they talk about shareholders, but in reality there are a lot of small fish with a vested interest in companies getting them the best return they can on their investment because they're relying on those returns to pay their expenses during the fixed income period of their life.

maym86 8y ago

Unions and worker ownership can help make a company actually consider the workers rather than just profit. In the US the balance has gone so far in the direction of treating low wage workers as disposable resources that any step to improve worker power is a good thing. Even if this bill passes the system would still favour the owners but there could be a little more consideration of the employees. The profit comes from the labour of people who work for the company. Any profit it makes is the difference between what their true labour is worth and what they are paid. So unless the owners are adding billions in value by themselves they are paying people less than the true value of their work. The extent at which this happens is where some ethical issues lie. If you keep wages low while making large profit there is a point of view that you are ripping off your workers and hopefully an extra voice at the top of the company can help here and emphasize some more consideration of worker needs.

bb2018 8y ago

I am not a fan of Warren or Bernie would do have some practical questions for how this might function for someone who believes this is a good idea. I am skeptical but open-minded. - Does every employee get an equal vote? Is it weighted at all by seniority, hours worked, salary? In a company like Starbucks where most employees are baristas what would stop them from joining forces with a small number of investors and looting the company's assets? -Do employees get a vote if they are contractors? Could a company simply set up hundreds of shell corporations and hire those corporations to prevent employee votes? If not, would you get a vote at every company you contract for? -Is there any concern that this could lead to a slowdown of new hiring? Right now a company may make 1B in income in a year and decide to invest the majority of it to open new locations or expand business. Do we think this would ever happen under this system - or would that money be given as short term profit? Would employees not want expansion which could possible benefit "the corporation" in the long run because it would cut into their bonus that year.

furbyhat 8y ago

Companies are an organization of human beings. So if companies are not accountable to shareholders, employees, suppliers and customers only. Then who are they accountable to? Say I own a small store selling fruit. I'm accountable already to: - those buying my food - my suppliers whom I get it grown from - to the licensing area - to the land owner - to myself - to my employees - to anyone who risked their money and sweat equity (owners) This article set up a strawman since companies are never Just accountable to shareholders as you can see.

methehack 8y ago

While I'm not sure of the mechanics of a lot of what's outlined here, and I'm especially not sure about the board of directors part, I think the idea of the "benefit corporation" could be a real game changer. Currently, as you probably know, the management of a public company has a fiduciary duty to maximize shareholder value. What's funny about this is that, in doing so, management may undermine every other _value_ the shareholders have -- and, in fact, is duty-and-legally-bound to do so if it increases shareholder value as measured in money. A legal framework like this gives management a way to maximize not only shareholder value but shareholder values. Without it, there's no legal/ethical basis do so. Companies sometimes act like they're about shareholder values, and to some degree maybe even meekly are, but, without a legal basis like this, that 's all marketing, in essence. I've always thought it was amazing that we create these institutions (companies) that don't represent any of the values of the people in them. It's as if we've played a trick on our humanity by given it to an institution that itself isn't human nor values anything humans value despite being made up entirely of humans.

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dontbereetard 8y ago

NO SHIT???

dontbereetard 8y ago

Yeah no shit? Its been a general consensus of anyone that isn't a rich CEO that this has been a bad practice. It is environmentally impactful and socially disruptive so that the few that understand the true nature of the system can exploit it at all costs, while maintaining a public image of not.

tim333 8y ago

While Warren's intentions are good it sounds like it could be messy in practice. "The new charter requires corporate directors to consider the interests of all major corporate stakeholders." With the possibility to sue if they don't. I could see no end of legal cases - workers suing for more pay or less layoffs, suppliers suing if they switch suppliers and so on.

neonate 8y ago

http://archive.is/bGmKh http://archive.is/bGmKh

riemannzeta 8y ago

I love the intent. I often have the sense that decisionmaking at big corporations manifests a well-functioning prefrontal cortex and no limbic system -- i.e., somewhere on the socipathy/psycopathy spectrum. It's interesting to note that some of the most successful corporations have already moved in this direction on a voluntary basis. Regardless of whether or how this particular initiative is received by Congress and the Courts, any big corporation that wants to grow long-term will have to move in this direction. In that sense, this is not necessarily a competition-friendly proposal. On the other hand, it's the whippersnappers that are growing fast by cutting corners that are likely to be hurt the worst. Personally, I prefer to live in a world of socially-responsible for-profit goliaths with Schumpeterian competition from startups over a world of free-for-all, dog-eat-dog competition in which bad values drive out the good. Lots of things to like about this proposal.

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bassman9000 8y ago

The problem may get worse, because executives have a strong financial incentive to prioritize shareholder returns Well, yes. They own the company. And they're accountable to US law while doing so. What's the issue? Why this socialist push now? Workers should demand a share of the company, no doubt, and leave if not granted.

makecheck 8y ago

I see a lot of criticism about particular parts of this one bill that seem to skip right past the larger potential value here: worker rights are actually being discussed. Just having that discussion is a step forward and should be encouraged, to improve whatever we can. Furthermore, nothing is ever perfect so don’t lose a chance at some benefit just because not all of this particular bill may be practical.

kapauldo 8y ago

The problem is real. Not sure this is the best solution, but better than nothing.