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I want to share Bob Cringely’s (yes, that Bob Cringely) article on this topic. It explains everything very concisely in very simple terms. https://www.cringely

I want to share Bob Cringely’s (yes, that Bob Cringely) article on this topic. It explains everything very concisely in very simple terms. https://www.cringely.com/2018/02/26/win-lose-wall-street-screwed-middle-class/ https://www.cringely.com/2018/02/26/win-lose-wall-street-scr...

isaacimagine 4y ago
This is a great read. What could someone starting a company today do to address the problems brought up in this article?
- yes_i_can 4y ago
  Given this is about shareholder value and the supposed evils that come from maximizing shareholder value, if you believe everything you read here, then you could just never take the company public. From there, you're not beholden to shareholders to maximize their value by paying employees poorly, etc. You can pay them whatever you want, although you are still beholden to math and accounting to pay wages that keep your company profitable, at least.
- kqr 4y ago
  Start a co-op. Make your employees and customers owners.
kqr 4y ago
> Their theory, in a nutshell, was that there was an inherent conflict in business between owners (shareholders) and managers, and that this conflict had to be resolved in favor of the owners, who after all owned the business; and the best way to do that was to find a way to align those interests by linking managerial compensation to owner success. And all along the real solution is so obvious: make the employees and customers owners. The co-op ownership model aligns all interests in ways that actually make sense.
- 3qz 4y ago
  Being an employee and an owner doesn’t align incentives since I have no meaningful influence over the stock price. I don’t care at all about the success of the projects I work on as long as I keep getting paid
  - kqr 4y ago
    The world does not, contrary to popular opinion, revolve around stock prices. Ownership is about having equal influence in strategic decisions. "I don't care about the success as long as I get paid" is typically something you hear from people who have never tried a truly democratic workplace before. It's a transformative experience.
    - 3qz 4y ago
      Does it matter? Jobs worth caring about are extremely rare so I don’t actually care about what the company does. I would vote to sell the company and cash out if I worked somewhere democratic.
      - antifa 4y ago
        > Jobs worth caring about are extremely rare Yes, co-ops are rare.
        3qz 4y ago
        There is no ownership structure in the world that could ever make me care about boring software
        downsidesabound 4y ago
        Maybe if it’s yours, it’s not boring. Like kids :P
  - djokkataja 4y ago
    Even if all you care about is whether you keep getting paid, being one of the owners of a business (even if it's one of many) suggests to me that you would have much more influence about whether you keep getting paid than you would in any business where you are not an owner.
IdiocyInAction 4y ago
Well, not everyone agrees with the conclusions made by the article. For example, here it is argued that the graph used by the article is suspect: https://economicsfromthetopdown.com/2020/01/17/debunking-the-productivity-pay-gap/ https://economicsfromthetopdown.com/2020/01/17/debunking-the... > This wasn’t a matter of productivity, either: workers were more productive every year, we just stopped being rewarded for it. In particular, this point is being disputed. Besides, I object to the use of the word "worker" here; some workers are surely more productive, but I can think of many classes of work that are fundamentally the same as they have been in the 70s; indeed, this kind of thing has been talked about under the heading of "cost disease" already: https://en.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.wikipedia.org/wiki/Baumol%27s_cost_disease Note that the article still points out inequality as a problem.

isaacimagine 4y ago

This is a great read. What could someone starting a company today do to address the problems brought up in this article?

yes_i_can 4y ago
Given this is about shareholder value and the supposed evils that come from maximizing shareholder value, if you believe everything you read here, then you could just never take the company public. From there, you're not beholden to shareholders to maximize their value by paying employees poorly, etc. You can pay them whatever you want, although you are still beholden to math and accounting to pay wages that keep your company profitable, at least.
kqr 4y ago
Start a co-op. Make your employees and customers owners.

kqr 4y ago

> Their theory, in a nutshell, was that there was an inherent conflict in business between owners (shareholders) and managers, and that this conflict had to be resolved in favor of the owners, who after all owned the business; and the best way to do that was to find a way to align those interests by linking managerial compensation to owner success. And all along the real solution is so obvious: make the employees and customers owners. The co-op ownership model aligns all interests in ways that actually make sense.

3qz 4y ago
Being an employee and an owner doesn’t align incentives since I have no meaningful influence over the stock price. I don’t care at all about the success of the projects I work on as long as I keep getting paid
- kqr 4y ago
  The world does not, contrary to popular opinion, revolve around stock prices. Ownership is about having equal influence in strategic decisions. "I don't care about the success as long as I get paid" is typically something you hear from people who have never tried a truly democratic workplace before. It's a transformative experience.
  - 3qz 4y ago
    Does it matter? Jobs worth caring about are extremely rare so I don’t actually care about what the company does. I would vote to sell the company and cash out if I worked somewhere democratic.
    - antifa 4y ago
      > Jobs worth caring about are extremely rare Yes, co-ops are rare.
      - 3qz 4y ago
        There is no ownership structure in the world that could ever make me care about boring software
        downsidesabound 4y ago
        Maybe if it’s yours, it’s not boring. Like kids :P
- djokkataja 4y ago
  Even if all you care about is whether you keep getting paid, being one of the owners of a business (even if it's one of many) suggests to me that you would have much more influence about whether you keep getting paid than you would in any business where you are not an owner.

IdiocyInAction 4y ago

Well, not everyone agrees with the conclusions made by the article. For example, here it is argued that the graph used by the article is suspect: https://economicsfromthetopdown.com/2020/01/17/debunking-the-productivity-pay-gap/ https://economicsfromthetopdown.com/2020/01/17/debunking-the... > This wasn’t a matter of productivity, either: workers were more productive every year, we just stopped being rewarded for it. In particular, this point is being disputed. Besides, I object to the use of the word "worker" here; some workers are surely more productive, but I can think of many classes of work that are fundamentally the same as they have been in the 70s; indeed, this kind of thing has been talked about under the heading of "cost disease" already: https://en.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.wikipedia.org/wiki/Baumol%27s_cost_disease Note that the article still points out inequality as a problem.