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Just a thought I had, but if democracy is good, then why are publicly traded companies ran like oligarchies and private companies ran like dictatorships? Should

by hgs3 3y ago

Just a thought I had, but if democracy is good, then why are publicly traded companies ran like oligarchies and private companies ran like dictatorships? Shouldn't cooperatives be the default? If the argument is cooperatives don't function as well, then isn't that an indictment against democracy? In any case I find it contradictory that democratic countries are essentially hosting non-democratic business entities. I could see an argument that if you bootstrapped your company, then you're entitled to more power, but if you retire or step down, then shouldn't the business convert to a coop? One has to wonder how Google, Microsoft, and Mozilla would fair as cooperatives. It makes for an interesting thought experiment.

bombcar 3y ago
There are some large coops, such as (iirc) SAP. Democracy is more about selecting the leader than about leading, though.
legitster 3y ago
Publicly traded companies are ostensibly democracies. It's just one vote per share instead of per person. > In any case I find it contradictory that democratic countries are essentially hosting non-democratic business entities. As one of my favorite econ books puts it "corporations are chunks of central planning in a soup of free market". Corporations only make economic sense because of the Coase Theorem: the transaction costs of reaching consensus agreement on all topics often costs more than can be gained by doing so.
deleted 3y ago
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bwestergard 3y ago
It's a good idea, particularly for firms that don't need much capital per worker like a small software company or convenience store. I would only add that for companies that are stewarding costly production goods - like a steel mill or chip fab - socially rational decisions are much more likely to be made if there is representation of other stakeholders on the board. For example: the regional government and representatives of workers in sectors that use the firm's output or produce its inputs.
JumpCrisscross 3y ago
Democracy is resilient, autocracy efficient [1]. A democracy encapsulating lots of little autocracies is the best configuration we’ve found, though they do get eclipsed by autocracies in the short run. [1] https://en.m.wikipedia.org/wiki/Theory_of_the_firm https://en.m.wikipedia.org/wiki/Theory_of_the_firm
ianburrell 3y ago
Co-op are vulnerable to the capture by leadership like other types of companies. REI is a co-op of members and has been moving towards being normal private company. One change was only the board can nominate board candidates. To make companies more democratic would require changing the rules. Like opening up board positions. For public companies, maybe get rid of proxy voting and vote online. Online voting would allow for important votes away from shareholder meeting, like selecting a new CEO. Another would be to give employees and even customers votes. Maybe have them elect separate board members.
aklemm 3y ago
It’s not a contradiction. No one is compelled to participate in private business, but we all are subject to government rule, which is necessarily messy, slow, and inefficient as the democratic government must reckon with many voices.

by hgs3 3y ago

bombcar 3y ago

There are some large coops, such as (iirc) SAP. Democracy is more about selecting the leader than about leading, though.

legitster 3y ago

Publicly traded companies are ostensibly democracies. It's just one vote per share instead of per person. > In any case I find it contradictory that democratic countries are essentially hosting non-democratic business entities. As one of my favorite econ books puts it "corporations are chunks of central planning in a soup of free market". Corporations only make economic sense because of the Coase Theorem: the transaction costs of reaching consensus agreement on all topics often costs more than can be gained by doing so.

deleted 3y ago

[deleted]

bwestergard 3y ago

It's a good idea, particularly for firms that don't need much capital per worker like a small software company or convenience store. I would only add that for companies that are stewarding costly production goods - like a steel mill or chip fab - socially rational decisions are much more likely to be made if there is representation of other stakeholders on the board. For example: the regional government and representatives of workers in sectors that use the firm's output or produce its inputs.

JumpCrisscross 3y ago

Democracy is resilient, autocracy efficient [1]. A democracy encapsulating lots of little autocracies is the best configuration we’ve found, though they do get eclipsed by autocracies in the short run. [1] https://en.m.wikipedia.org/wiki/Theory_of_the_firm https://en.m.wikipedia.org/wiki/Theory_of_the_firm

ianburrell 3y ago

Co-op are vulnerable to the capture by leadership like other types of companies. REI is a co-op of members and has been moving towards being normal private company. One change was only the board can nominate board candidates. To make companies more democratic would require changing the rules. Like opening up board positions. For public companies, maybe get rid of proxy voting and vote online. Online voting would allow for important votes away from shareholder meeting, like selecting a new CEO. Another would be to give employees and even customers votes. Maybe have them elect separate board members.

aklemm 3y ago

It’s not a contradiction. No one is compelled to participate in private business, but we all are subject to government rule, which is necessarily messy, slow, and inefficient as the democratic government must reckon with many voices.