6 ms·

Democracy is not an efficient way of running a business. Look at the multi-trillion dollar deficit as an example. Workers are incentivized to choose themselves

by Aunche 6y ago

Democracy is not an efficient way of running a business. Look at the multi-trillion dollar deficit as an example. Workers are incentivized to choose themselves over the health of the company or the customer. Also, people overwhelmingly would rather exchange their stake in the company for the equivalent value in cash. It's only when the company's valuation skyrockets when they retroactively declare this to be unfair.

WalterBright 6y ago
I often hear people complain about others making money in the stock market, so I suggest they invest in stocks, too. They respond saying it's too risky.
- Apocryphon 6y ago
  I thought index funds have become the mainstream investment vehicle of the last ten years.
  - WalterBright 6y ago
    Index funds do not monotonically increase, either.
- devalgo 6y ago
  >They respond saying it's too risky Well it literally is. If they are talking about Wall St. bankers they have no way to replicate the results of those people. Wall Street can make poorly thought out multi-trillion dollar bets on housing bonds and when they go bust they get bailed out and still get their Christmas Bonuses. There is no similar mechanism to protect a non-institutional investor from similar levels of risk.
  - WalterBright 6y ago
    There are plenty of stocks besides mortgage derivatives, and plenty of ordinary people making money off of stocks. If you want to sit on the sidelines because it's too risky for you, that's fine. But don't then complain that others make money on stocks. You, and anyone else, can buy FAANG stocks, index funds, or whatever.
    - AQuantized 6y ago
      The problem is you need capital to begin with, and the median American barely has enough on hand to cover an emergency, nevermind build significant investments. Many of us might be fortunate to have well paid jobs, and the ability and capital to invest, but it's understandable how someone could view the ability of those with capital to generate further capital without any labour to be unfair.
      - WalterBright 6y ago
        The median American buys new cars, so they could by a used car and invest the difference. I've known many people who didn't have any cash on hand, yet lived high on the hog with expensive clothes, new cars, and nice houses. They didn't have any cash on hand because they spent it as fast as possible.
Apocryphon 6y ago
As we've seen in recent cases, corporate management has become incentivized to choose the interests of the investors over the health of the company or the customer or their workers, making short-term decisions that look good in quarterly reports.
- deleted 6y ago
  [deleted]
clarry 6y ago
> Workers are incentivized to choose themselves over the health of the company or the customer. And maybe that is how it should be? Maybe life shouldn't be about the most efficient way to run a business.
- Avicebron 6y ago
  This. Why should life be run the way business's are run, we have been co-opted by the business model and all it's sociopathic tendencies.
- Aunche 6y ago
  If Earth was government by one big country, you'd have solid point, but most Americans would prefer that the next trillion dollar companies not all be based in India and China. Also, what's best for the workers isn't necessarily what is best for society. Globalization is anti-worker, but it helps the consumer with cheaper prices, the company with extra profits, and developing countries afford what developed countries take for granted like antibiotics.
  - Apocryphon 6y ago
    The parent comment is making a universal statement, and so it would hypothetically apply to companies everywhere, including in India and China. Perhaps then there would be a world without trillion dollar companies, or maybe the workers can figure out a way. The Mondragon Corporation is a tens-of-billions-dollar workers cooperative [0], for instance. This line of discussion is also making the assumption that what's best of workers and what's best for companies are necessarily in conflict, which is rather silly given that if a company goes under, the workers themselves are in trouble. There is at least one example I can point to where a workers union forced management to recognize the need to be more economically competitive. [1] Also, it makes the assumption that management and/or shareholders necessarily know best for a company's future, and there is no shortage of evidence to the contrary, some even recent. [2] [0] https://en.wikipedia.org/wiki/Mondragon_Corporation https://en.wikipedia.org/wiki/Mondragon_Corporation [1] https://news.ycombinator.com/item?id=13986889 https://news.ycombinator.com/item?id=13986889 [2] https://news.ycombinator.com/item?id=23380445 https://news.ycombinator.com/item?id=23380445 https://news.ycombinator.com/item?id=21887425 https://news.ycombinator.com/item?id=21887425
devalgo 6y ago
>Democracy is not an efficient way of running a business Have any data to back that up? Comparing a democratically run corporation to the US government is a non sequitur. Outside VC there is no business model that will allow you to run at a loss for decades. So it's a scenario that's not even possible hypothetically. Somewhat anecdotal but there is a Worker Co-op in Spain, Mondragon, that's been a very competitive corporation for over 50 years. It can clearly work long term and it leads to better outcomes for employees and the communities they work in.
- Aunche 6y ago
  Part of this is that VCs as you describe. It doesn't matter if a democratic social media company is more sustainable than Facebook when Facebook receives a half a billion dollars in VC funding to patch up its problems. Anecdotally, I hear that Ford's biggest problem right now is the union's resistance in adopting the Toyota production system. If I were a factory worker, I wouldn't want to change the way I do things just so the shareholders get richer. That's a perfectly reasonable attitude to have, but it does place Ford at a disadvantage to car makers without unions like Tesla and Toyota.
  - 6510 6y ago
    For that business it might not be a good formula but public education seems to be the biggest thing missing. I've talked with employees who could very very easily run the show themselves if they simply got organized and made a [much smaller] bid on the contract their employer was bidding on. They also know their managers share in the huge profits, drink coffee all day and never show their face(!) If the people doing the work ask for anything there will be a huge deliberate delay or it won't be done as a reminder not to ask for things. Do it again and you will get punished. They are on a first name basis with employees working far away because of the sheer amount of improvisation. If you need widgets you will have to get them from someone. The employees all know they could run the business but they cant picture themselves doing it. Their arguments are "It's to complicated" but struggle and fail to explain how. It might still not be a good idea but that they draw a blank is the ultimate hurdle for now.
  - 6y ago

by Aunche 6y ago

WalterBright 6y ago

I often hear people complain about others making money in the stock market, so I suggest they invest in stocks, too. They respond saying it's too risky.

Apocryphon 6y ago
I thought index funds have become the mainstream investment vehicle of the last ten years.
- WalterBright 6y ago
  Index funds do not monotonically increase, either.
devalgo 6y ago
>They respond saying it's too risky Well it literally is. If they are talking about Wall St. bankers they have no way to replicate the results of those people. Wall Street can make poorly thought out multi-trillion dollar bets on housing bonds and when they go bust they get bailed out and still get their Christmas Bonuses. There is no similar mechanism to protect a non-institutional investor from similar levels of risk.
- WalterBright 6y ago
  There are plenty of stocks besides mortgage derivatives, and plenty of ordinary people making money off of stocks. If you want to sit on the sidelines because it's too risky for you, that's fine. But don't then complain that others make money on stocks. You, and anyone else, can buy FAANG stocks, index funds, or whatever.
  - AQuantized 6y ago
    The problem is you need capital to begin with, and the median American barely has enough on hand to cover an emergency, nevermind build significant investments. Many of us might be fortunate to have well paid jobs, and the ability and capital to invest, but it's understandable how someone could view the ability of those with capital to generate further capital without any labour to be unfair.
    - WalterBright 6y ago
      The median American buys new cars, so they could by a used car and invest the difference. I've known many people who didn't have any cash on hand, yet lived high on the hog with expensive clothes, new cars, and nice houses. They didn't have any cash on hand because they spent it as fast as possible.

Apocryphon 6y ago

As we've seen in recent cases, corporate management has become incentivized to choose the interests of the investors over the health of the company or the customer or their workers, making short-term decisions that look good in quarterly reports.

deleted 6y ago
[deleted]

clarry 6y ago

> Workers are incentivized to choose themselves over the health of the company or the customer. And maybe that is how it should be? Maybe life shouldn't be about the most efficient way to run a business.

Avicebron 6y ago
This. Why should life be run the way business's are run, we have been co-opted by the business model and all it's sociopathic tendencies.
Aunche 6y ago
If Earth was government by one big country, you'd have solid point, but most Americans would prefer that the next trillion dollar companies not all be based in India and China. Also, what's best for the workers isn't necessarily what is best for society. Globalization is anti-worker, but it helps the consumer with cheaper prices, the company with extra profits, and developing countries afford what developed countries take for granted like antibiotics.
- Apocryphon 6y ago
  The parent comment is making a universal statement, and so it would hypothetically apply to companies everywhere, including in India and China. Perhaps then there would be a world without trillion dollar companies, or maybe the workers can figure out a way. The Mondragon Corporation is a tens-of-billions-dollar workers cooperative [0], for instance. This line of discussion is also making the assumption that what's best of workers and what's best for companies are necessarily in conflict, which is rather silly given that if a company goes under, the workers themselves are in trouble. There is at least one example I can point to where a workers union forced management to recognize the need to be more economically competitive. [1] Also, it makes the assumption that management and/or shareholders necessarily know best for a company's future, and there is no shortage of evidence to the contrary, some even recent. [2] [0] https://en.wikipedia.org/wiki/Mondragon_Corporation https://en.wikipedia.org/wiki/Mondragon_Corporation [1] https://news.ycombinator.com/item?id=13986889 https://news.ycombinator.com/item?id=13986889 [2] https://news.ycombinator.com/item?id=23380445 https://news.ycombinator.com/item?id=23380445 https://news.ycombinator.com/item?id=21887425 https://news.ycombinator.com/item?id=21887425

devalgo 6y ago

>Democracy is not an efficient way of running a business Have any data to back that up? Comparing a democratically run corporation to the US government is a non sequitur. Outside VC there is no business model that will allow you to run at a loss for decades. So it's a scenario that's not even possible hypothetically. Somewhat anecdotal but there is a Worker Co-op in Spain, Mondragon, that's been a very competitive corporation for over 50 years. It can clearly work long term and it leads to better outcomes for employees and the communities they work in.

Aunche 6y ago
Part of this is that VCs as you describe. It doesn't matter if a democratic social media company is more sustainable than Facebook when Facebook receives a half a billion dollars in VC funding to patch up its problems. Anecdotally, I hear that Ford's biggest problem right now is the union's resistance in adopting the Toyota production system. If I were a factory worker, I wouldn't want to change the way I do things just so the shareholders get richer. That's a perfectly reasonable attitude to have, but it does place Ford at a disadvantage to car makers without unions like Tesla and Toyota.
- 6510 6y ago
  For that business it might not be a good formula but public education seems to be the biggest thing missing. I've talked with employees who could very very easily run the show themselves if they simply got organized and made a [much smaller] bid on the contract their employer was bidding on. They also know their managers share in the huge profits, drink coffee all day and never show their face(!) If the people doing the work ask for anything there will be a huge deliberate delay or it won't be done as a reminder not to ask for things. Do it again and you will get punished. They are on a first name basis with employees working far away because of the sheer amount of improvisation. If you need widgets you will have to get them from someone. The employees all know they could run the business but they cant picture themselves doing it. Their arguments are "It's to complicated" but struggle and fail to explain how. It might still not be a good idea but that they draw a blank is the ultimate hurdle for now.
- 6y ago