This is why I asked what you do for a living. The thing is that some people are better at certain jobs than others. Why is the tire maker a tire maker and why is a manager a manager? The answer is the division of labor.
It is a good thing that some people specialize in making decisions and some people specialize in making tires. It is more efficient that way.
I’m a salesperson. I make money by spending my time in front of customers. My boss is a manager. He makes his money by directing me. If I was directing others it would be a waste of my sales skills. If he was working with customers it would be a waste of his managerial skills. My company is set up the way it is because it works the best.
Because the opinions of workers are worthless in these unskilled labor industries. But, I know many independent petroleum companies that currently operate how you’re describing. D&M Consulting is owned by the employees, and to advance within the company you have to purchase so much ownership. It winds up being a relatively flat company, with lots of interaction between the president and technical employees.
Another company, Hilcorp energy out of Houston is structured differently. Basically the owner of hilcorp acts like a bank and loans money to different asset teams within the company for their products. The profits from the projects are split between the asset team and central owner, but the asset team remains autonomous. Each asset team is made up of about 10 technical personnel, who can become asset team managers if they show initiative and drive. You can have as much responsibility as you want.
The point is, that the model you’re talking about already is implemented and does work, but only when employees are highly motivated and skilled. What is the point in letting the mindless high school dropouts who change jobs every 2 months who work at wal marts and best buys etc etc running the company? There needs to be a lot of dedication and passion for worker owned companies to be competitive. When was the last time Mcdonalds interviewed someone who said: “I’m really driven to succeed and I value my work and contributions to the company. I want tolive up to all my potential and never stop improving my skills”
So, what you’re describing is possible, actually makes you a free-marketer (just with a different business model), and is already working wonders in the energy biz. Many of us on this forum agree with you that current corporate structures are probably severely outdated and need to be replaced with something less feudal…
It happens all the time. It’s called ‘corporate’. The ordinary Mcdonalds employee is an indigent barbarian who probably only has work because the state artificially distorts employment distribution.
Chris thanks for responding. You argue that governments cannot plan but cannot explain mechanically why.
You state its bad simply because we may endup with another corrupt government. While yours is a valid concern it’s not why governments cannot effeciently operate in the market place however.
The reason can stem from the economic fact that they have no economic calculation. Something you should look up. A firm that practices coercion to distribute it’s goods has no valid feedback from the consumer base from which to make proper decisions. A private firm not practicing coercion can simply read consumer demand and feedback to determine what to do.
Also I am still confused as to how you arbitrarily separate managers from workers. How is it that managers do not work? Do they not add value to a company? Do you consider them to be a form of administrative bloat? What about proletariat bloat from heavy unionization?
Thats fine we are speaking hypothetically so no problem. Speak plainly and let us know how you think it will operate in an idealistic way.
Lets say there are 1000 employee’s voting on our 3 primary topics. Salerie, Production, and expansion. Do you think all 1000 employee’s are going to have the business information they need to make an accurate vote for the business to survive? Do you think the majority of the firm will have:
Do you beleive that the majority of the 1000 will vote no on a pay raise in a time when it is needed?
Do you believe that the majority of the 1000 will have enough insight and production knowledge from which to make a safe business decision for their vote?
2a) What if the vote is for approval to purchase 4 new automated factories which will reduce labor need by 25%. This will reduce production costs and allow the business’s product to be sold cheaper than competition therebye spurring a huge demand and increasing profits. Do you think the 1000 will vote to allow the new machinery even though it may eliminate their job?
B)Furthermore if jobs meed to be cut, who does the cutting. How can you cut someone’s job if they are an owner in your model? Does firing involve voting? How does this elimination process work?
Do you think the majority of the 1000 will have done enough research in market exploration, survey results, customer feedbacks, and other various business metrics to cast a smart vote in the business expansion vote?
To understand why I think your model would fail to be an efficient business you need to read about public choice theory. While your business is still technical private and not a public one, having an entire company vote on matters will render the same result as widescale democracy but at an isolated scale. You need to read on rational ignorance and other issues that public choice theorists have brought up. Point being, voting is not an efficient way to run a government and will not be any better for a business. You may be confused by this as most american’s are raised thinking that democracy is some kind of holy grail. Voting though will return the lowest common denominator of knowledge.
If your business goes the route of voting into appointed spokesman how can you be sure that those spokesman know anything about running a business at all? How do you keep your business from not folding into a huge political arena. Company politics are bad enough as is.
To understand why such a business would fail outright you need to learn and understand the value of the Division of Labor. Not everyone can do everything. Also the working class has now, always have, and will forever have the power in their hands to change the coarse of their own future to a more profitable one. It is by their own voluntary choice that your so called “working” class chooses not to act and improve his/her life by moving to a different industry or field of expertise or company. The so called “Working” class that I think your referring to, such as union members, have always taken a standpoint that they deserve something, even if they did not produce enough to get it. They typically follow the Labor Theory of Value which I don’t think I need to explain it’s fallacies.
Back to the Rollplay
Lets say you’ve been with this company for 6 months now and now have the right to vote. Your competitor is producing widgets 10% cheaper then you are. This is costing your business a great deal as consumers are choosing their similar quality product over yours due to price. According to the business experts if you were to employ the 4 new automated production factories it would reduce your production costs by estimated of 25% thereby allowing you to compete with your competitor. This purchase though will also cause 25% of the labor force to lose their job. How do you think the company will vote?
What business information do you have that has lead you to believe that “Workers Councils” are superior to general division of labor.
Please elaborate on your answer I’d like to know why you think this.
In a healthy market privately owned firms come in and out of existence. Their success isn’t an individual one but empirically observed over a longer period of time as an economy dynamically grows and improves and the quality of life continues to improve.(Not stagnate)
One needs not look at the imperical history of whether or not socialism can or cannot work. One simply needs to use logic to realize that it is impossible of functioning as an economic model. There is no economic calculation in socialism. It can work no more then breaking the laws of physics and flying can work. Austrian Economists use logic to curtail various economic fallacies that have formed over the past 1000 years, socialism being one of them.
To understand why the mechanics of socialism are broken you need to read up on the Economic Calculation problem.
We can also hope that we may fly one day but unless that relationship between Mass and Gravity changes and the laws of physics alter such a hope will never be realized. Most socialists are economically ignorant and the ones that have done their economic homework have had to desperately come up with fallacious defensive arguments to get around the Economic Calculation issue.
It’s not a matter of who or what performs. It’s fundamental understanding of what economics is and is not. A strong economy is one that serves the individuals consumer needs. Human beings are not Ants, we are not an autonomous system. We cannot move the right or left arm of humanity. We are individuals with our own ends seperate from others around us. We are not collective beings and untill our minds become linked by some freakish evolution of nature that is simply the natural laws we have to face with. Man is an individual being with individual ends. He needs his personal needs to be served. When man’s personal needs are served in the market place, and this occurs to all men than you have a strong economy.
The argument that man can be more productive if he sacrififcces himself to be a part of a collective is oxymoronic. If he had to sacrifice himself to do anything than this did not serve him well economically and if this occurs to all men the economic output is a large failure regardless what is produced. A good economy is one where individual needs are met, not collective needs. A collective need is a fantasy or fairy tail. Only individual human action tells us what human needs are.
If we decide to arbitrarily state that we are collective beings as the Ant is, and ignore our natural state of being, we could fabricate an argument that states that collectivism serves man as a whole. But if the individual man has had to sacrifice himself to do this than you have defeated the purpose of the argument. Do you understand where I am getting at? Most of this stuff can be cleared up when you have a larger understanding of Praxeology. The concept that man can be more efficient as a collective entity however is a fairy tail. The fact that we have to vote to agree is proof as much. Man cannot be a collective no matter how hard he tries.
In theory socialism doesn’t work. Technically socialism doesn’t work. It can only be assumed to work when the theorizer is delusional and decides to ignore certain human and economic factors that effect it.
Before you understood math you may have been just as skeptical about the sum of 2+2 equalling 4. After you learned math however though any theory arguing that the sum total of 2 and 2 being 5 was clearly ficiticious to you.
I strongly encourage you to read Mises’s Economic Calculation in the Socialist Commonwealth.
The others here beat me to it. The division of labor is the reason market socialism can’t work (at least as a universal model). You can’t have hospital janitors “voting” on the decisions of surgeons.
You’re correct that we elect our political representatives democratically. How well has that been workin out for ya??
Sounds to me like you are a Syndicalist, or “Worker’s Capitalist.” If you want to find out more about this (or even check if my diagnosis is correct), check these out:
Well, I’m absolutely a capitalist, so I see both moral and utilitarian problems with it. For one thing, who would decide what gets made, and what gives them the authority to do such?
But how do workers acquire these businesses? Do they just formulate them?
Ok you want revolution, but do you think you are justified in such revolution? Will individuals be forced into these councils or is it strictly voluntarily?
The bourgeois don’t just magically disappear if the proletariat gain power though. The dictatorship of the proletariat is a Roman term used to define a state in which certain rights of individuals are put on hold due to a ‘state of emergency.’ Unless you are will to kill all capitalists and bourgeois then they will not just retract into defeatist acceptance.