Many have procedures for changing the leadership, but I know of no successful organizations that are socialist in behavior or decision-making.
Ownership is not the same as leadership. For example, you could own 1/N shares of the company you work at, try using them at the shareholder meeting to influence the future of the company, maybe even try to replace the CEO… but when then shareholder meeting is over, you become just another cog in the machine for the rest of the year, except that you also get 1/N of a part of profit at the end of the year as a bonus.
If I remember it correctly, Mondragon Corporation has regular elections, where employees elect a supervisory board, which appoints the CEO, who basically directs the company in the classical top-down way. The supervisory board can replace the CEO at any moment. The employees can elect a new supervisory board at specified time intervals. (Not sure I remember it exactly.) Leaving is not a problem; they even pay you your fraction of the company value. This ironically makes joining a potential problem, because you need to buy your share of the company, but the company can lend you the money that you later pay back via income deductions.
On long enough timeframes, ownership determines leadership. If you own 1/N of a company, for a very large N, you don’t have much control, but the group of you which own a large amount does have a whole lot of influence over management and decision-making. You’re absolutely right, though, the OP should have specified both entry and exit mechanisms, and relative quantities of ownership to qualify as “socialist”.
One could argue that every public company is socialist—ownership is open to anyone who can spend a few hours wages on shares of stock. I suspect that wouldn’t make the cut for this post. What DOES identify a socialist ownership or management of a corporation or other changing- and voluntary-membership organization?
Of key importance: how are allocation decisions made (i.e. should this year’s profit be distributed to past contributors/owners, workers (recent workers in retroactive bonus, current workers in higher pay or instantaneous bonus, or future workers in higher pay bands and more hiring), or reinvested in equipment upgrades)?
It is typical to buy the stock of a company for the dividends or the growth of value of the stocks. In order to activate the “socialist mode” of such open stock arrangement somebody outside the company would buy stock in order to influence work conditions to be more humane just for the sake of promoting sensible working conditions. In some company forms this is forbidden. Making idealist decisions that hurt the bottom line that are not even trying to indirectly increase profits runs afoul of the structure of a money making machine. For-profits run into trouble if they have genuine non-profit activities. Law likens that to fraud of majority shareholders towards the minority shareholders rather than arbitrary usage of property.
One could offcourse dissolve a company and start a non-profit with the same assest. But it highlights that you can’t creep into non-profit bit by bit but a for-profit remains a for-profit as long as it stands. Conceptually, you need to spend those funds as a consumer for ideological effects.
I notice I’m confused. Converting an existing corporation to socialist mode would mean buying out ALL the stock (presumably by or at least for the employees), wouldn’t it? As you point out, a mixed-ownership model, where some shareholders think they are owed profits, and some shareholder-workers think they are owed non-profit-benefits is going to anger some or both groups.
No way for the corporation as a unit to partly convert, but presumably workers could buy/spin-off/create SMALLER units out of the corporation. Or, as so often seems to be the assumption in these conversations, since capital has no value or claim to revenue, just walk away from it and start their own.
I also notice that I’ve been mind-killed—I want to steelman and understand the appeal and gears-level workings of this organizational principle, but I’m failing. I apologize, and am bowing out of this conversation. Feel free to rebut anything I’ve written, I’ll read but not respond.
If you get the corporation to dissolve then you could use the share that your shares entitle you to take control of only that part of the whole thing. If some parts are more human-involved then the non-human involved parts might not be desirable in the new organization. Ie have 60% of the stock, force dissolution outcome, keep/buy all the employement relations with your share and try to negotiate for the 40% to run away with the money and steel. If ideological stock remains a minority voice then the profit side can just choose to keep intact. If it is especailly clean it might just result in a “split” (rather than a fusion) of 40% of the operations keeping to the for-profit order and could even keep operations in tact. In super peaceful conditions the 60% could even keep customer relations to the 40% where a total break is not possible.
Corporations typically get distrubed if random parts of them need to be reset so the price to buy out random parts is probably a bit more what it would “objectively” be. Degree of ideological fervor might make it okay for the new establishers to take losses. Keeping your parts dependent means this kind of distruption happens less often. If everybody works to subsistence all the time then this threshold can never be met. And it is typical for the part to be benefitting the whole. There the old order is not ambivalent but a bit against part removal (lost profits are lost profits after all). And like you can’t operate 0.1 of a powerplant there is a coordination problem for enough people to detach at the same time to form a sensible new unit before anybody can leave. Competition proofs often require no barriers to entry, reorganization tends to not be a free action so spontanoues fission is not seen.
A pure hunter-gatherer could try to detach from society by only gathering food for themself. Having job specialization is more efficient per unit of work. But having a specialization and hunter-gatherer capability is wasteful. So we find people that have the specializiation but have lost or never developed the hunter-gatherer capability (and there is a outcompeting version of this argument). Then you are at the mercy of what other people have chosen as their specialization on what your wealth is and don’t have the moving room to be optimizing it. At will and all but if you only can function in the niche but can’t form your niches, it isn’t super relevant. Being free to go starve with your sucking hunter skills doesn’t prove that obligatory group activities would dismantle if they were too bad. If there is enough slack to have 10 minutes a day to learn over a year to be non-starving hunter then niche construction can be exercised by having a significantly worse standard of living. But in a sense this is inventing the wheel again just to avoid being commanded by others. Rather you want to find other people that are also fed up with their niches (which can potentially be very different) and then jump straight to a big group oblicatory activity with more comfortable niches. The deeper your specialization the more you are dependent on a bigger outside social order to be static and can expect it to respond slower to your changing needs. The bigger the changing units the bigger the chaos to move from one order to the next. This even if there was nobody orchestrating it. You could have people deliberately orchestrating it. But there is the danger that people with little room to move are easy to organize and some could organize the relations to the benefit of the organizer or society as a whole instead of the ones being organized. If the organizer is doing a bad job or is doing a too self-serving a job the cogs can only squeal. Like being symphatetic for slaves easily turns to hoping that none was a slave, people should not be myopic about the their role in society and helping the cogs involves making sure that they can do more than “just their job”. And it seems if an agents freedom is predicated on another agent not having freedom the result is going to be constant straife. If your money is predicated on me not having money this is an arrangment that can not withstand prosperity.
One could argue that every public company is socialist—ownership is open to anyone who can spend a few hours wages on shares of stock. I suspect that wouldn’t make the cut for this post. What DOES identify a socialist ownership or management of a corporation or other changing- and voluntary-membership organization?
I think an important part is that the interests of all employees are (hypothetically) aligned. So even if you only own 1/1000 of the company, the remaining 999 shareholders also vote for the things you want. As opposed to your example when someone buys 1/1000 of the company, but has no impact on the outcomes, because the remaining 999/1000 votes are incompatible.
Wow. I have to admit I hadn’t heard that dimension before, and I’m not sure I get it. Humans are generally not aligned, especially on the level of who gets what jobs and how much they get paid. Does that mean it’s impossible in the real world? Or do I completely miss your point?
Workers at a business are generally more aligned with each other than they are with the shareholders of the business. For example, if the company is debating a policy that has a 51% chance of doubling profit and a 49% chance of bankrupting the company, I would expect most shareholders to be in favor (since it’s positive EV for them). But for worker-owners, that’s a 49% chance of losing their job and a 51% chance of increasing salary but not doubling (since it’s profit that is doubling, not revenue, and their salaries are part of the expenses), so I would expect them to be against the policy.
The same goes for things like policies around worker treatment—if a proposed policy would increase profit by 10% but make workers have a much more unpleasant environment, shareholders would probably vote in favor while worker-owners would vote against.
Obviously there are some shareholders who would go against their profit motive for improving the lives of stakeholders (see ESG funds), and workers who would choose a chance for more money over better working conditions or a lower chance of lowing their job. But I would generally expect the two groups to disagree with each other but be aligned internally.
I always like it when I can upvote and disagree :)
I think you have to be in VERY far mode, and still squint a bit, to think of that as “alignment” to the degree that distinguishes socialist from conventional organizations. Sure, employees as a group will prefer higher median wages over more profits (though maybe not if they’re actual owners to a great degree), but I have yet to see a large organization where workers care all that much about other workers (distant ones, with different roles, who compete for prestige and compensation even while cooperating for delivery).
Conventional org owners/leaders care a lot about worker retention and productivity, which is often summarized as “satisfaction”. I have seen no evidence in my <mumble> years at companies big and small, including both tech and non-tech workers that office workers care more about warehouse workers than senior management does. There is probably slightly more for warehouse workers caring about workers in other warehouses, but even then, there’s cut-throat hatred for closing “my” warehouse rather than someone else’s.
Without the qualifier “different roles” I had in mind that you can privately not like peeing into to a bottle to be pretty well correlated with your coworker also not liking it without you considering each other.
And then when I apply the same about office workers thinking about warehouse workers peeing in bottles it seems they would not be ambivalent but slightly against.
While it is quite easy to see a manager wanting a policy that has 10% number increase and no numeric effect on any other number to be default in favour.
In reverse this can be seen that a worker is unnaturally insulated about the meangingfulness of their task. Moving boxes day in day out probably feels very samey, while a manager can see that now we are serving this nationality people and now that. Or indeed that with no increase customers per worker might be 10 and with 10% increase we have 11 customers per worker. And offcourse customers have a difficult time telling whether their packages were done pee-bottle-free.
While workers are not especially knowledgeable they are uniquely situated for certain kinds of information. So even if they are not especially homogenous the dimensions on which they base opinions on are probably the same. Also if you know you are powerless it is easy to not care. If you are an office worker and know you do or could have a say, “pee bottles in my company” activates accountability differently. If you are not so situated you will probably frame is as “their company”, “company I work at”, “Big dude that breaths into my neck is equally asshole to those guys too”.
If workers own the company, they might agree on more vacation, no unpaid overtime, better working conditions, etc. These would be the shared preferences.
If someone else owns the company, they will typically want a CEO who squeezes out of the company as much profit as possible. Everything else is purely instrumental. Yeah, it might happen that giving people more vacation is good for attracting talent that generates more profit, in which case the company might also decide to provide more vacation. Or maybe the CEO decides that vacation is irrelevant, or should only be given to people working at certain selected positions. Basically, from the perspective of a worker it is mostly random, but more often bad news.
If you are one of 1000 workers, and you own 1/1000 of the company… but other workers did not buy shares, so 999/1000 of the company is owned by someone who doesn’t work there, do not expect the company to be any nicer to you than is strictly necessary.
EDIT: After reading your other comment...
I think that people are more likely to empathize with people in a similar role than with people in a different role. As an “individual contributor” myself, I find it natural to empathize with people who have to do overtime and hate it. But who knows, maybe in a parallel world where I am a manager, I empathize with managers who get frustrated with the lazy bastards who prioritize their family and hobbies over getting their boss a well-deserved bonus.
But even if I had zero empathy towards people in a similar role, arguing for the benefits of everyone is a Schelling point. I can get more support for “more vacation for everyone” than for “more vacation for Viliam”.
Ownership is not the same as leadership. For example, you could own 1/N shares of the company you work at, try using them at the shareholder meeting to influence the future of the company, maybe even try to replace the CEO… but when then shareholder meeting is over, you become just another cog in the machine for the rest of the year, except that you also get 1/N of a part of profit at the end of the year as a bonus.
If I remember it correctly, Mondragon Corporation has regular elections, where employees elect a supervisory board, which appoints the CEO, who basically directs the company in the classical top-down way. The supervisory board can replace the CEO at any moment. The employees can elect a new supervisory board at specified time intervals. (Not sure I remember it exactly.) Leaving is not a problem; they even pay you your fraction of the company value. This ironically makes joining a potential problem, because you need to buy your share of the company, but the company can lend you the money that you later pay back via income deductions.
Cool, TIL. https://en.wikipedia.org/wiki/Mondragon_Corporation looks pretty cool.
On long enough timeframes, ownership determines leadership. If you own 1/N of a company, for a very large N, you don’t have much control, but the group of you which own a large amount does have a whole lot of influence over management and decision-making. You’re absolutely right, though, the OP should have specified both entry and exit mechanisms, and relative quantities of ownership to qualify as “socialist”.
One could argue that every public company is socialist—ownership is open to anyone who can spend a few hours wages on shares of stock. I suspect that wouldn’t make the cut for this post. What DOES identify a socialist ownership or management of a corporation or other changing- and voluntary-membership organization?
Of key importance: how are allocation decisions made (i.e. should this year’s profit be distributed to past contributors/owners, workers (recent workers in retroactive bonus, current workers in higher pay or instantaneous bonus, or future workers in higher pay bands and more hiring), or reinvested in equipment upgrades)?
It is typical to buy the stock of a company for the dividends or the growth of value of the stocks. In order to activate the “socialist mode” of such open stock arrangement somebody outside the company would buy stock in order to influence work conditions to be more humane just for the sake of promoting sensible working conditions. In some company forms this is forbidden. Making idealist decisions that hurt the bottom line that are not even trying to indirectly increase profits runs afoul of the structure of a money making machine. For-profits run into trouble if they have genuine non-profit activities. Law likens that to fraud of majority shareholders towards the minority shareholders rather than arbitrary usage of property.
One could offcourse dissolve a company and start a non-profit with the same assest. But it highlights that you can’t creep into non-profit bit by bit but a for-profit remains a for-profit as long as it stands. Conceptually, you need to spend those funds as a consumer for ideological effects.
I notice I’m confused. Converting an existing corporation to socialist mode would mean buying out ALL the stock (presumably by or at least for the employees), wouldn’t it? As you point out, a mixed-ownership model, where some shareholders think they are owed profits, and some shareholder-workers think they are owed non-profit-benefits is going to anger some or both groups.
No way for the corporation as a unit to partly convert, but presumably workers could buy/spin-off/create SMALLER units out of the corporation. Or, as so often seems to be the assumption in these conversations, since capital has no value or claim to revenue, just walk away from it and start their own.
I also notice that I’ve been mind-killed—I want to steelman and understand the appeal and gears-level workings of this organizational principle, but I’m failing. I apologize, and am bowing out of this conversation. Feel free to rebut anything I’ve written, I’ll read but not respond.
If you get the corporation to dissolve then you could use the share that your shares entitle you to take control of only that part of the whole thing. If some parts are more human-involved then the non-human involved parts might not be desirable in the new organization. Ie have 60% of the stock, force dissolution outcome, keep/buy all the employement relations with your share and try to negotiate for the 40% to run away with the money and steel. If ideological stock remains a minority voice then the profit side can just choose to keep intact. If it is especailly clean it might just result in a “split” (rather than a fusion) of 40% of the operations keeping to the for-profit order and could even keep operations in tact. In super peaceful conditions the 60% could even keep customer relations to the 40% where a total break is not possible.
Corporations typically get distrubed if random parts of them need to be reset so the price to buy out random parts is probably a bit more what it would “objectively” be. Degree of ideological fervor might make it okay for the new establishers to take losses. Keeping your parts dependent means this kind of distruption happens less often. If everybody works to subsistence all the time then this threshold can never be met. And it is typical for the part to be benefitting the whole. There the old order is not ambivalent but a bit against part removal (lost profits are lost profits after all). And like you can’t operate 0.1 of a powerplant there is a coordination problem for enough people to detach at the same time to form a sensible new unit before anybody can leave. Competition proofs often require no barriers to entry, reorganization tends to not be a free action so spontanoues fission is not seen.
A pure hunter-gatherer could try to detach from society by only gathering food for themself. Having job specialization is more efficient per unit of work. But having a specialization and hunter-gatherer capability is wasteful. So we find people that have the specializiation but have lost or never developed the hunter-gatherer capability (and there is a outcompeting version of this argument). Then you are at the mercy of what other people have chosen as their specialization on what your wealth is and don’t have the moving room to be optimizing it. At will and all but if you only can function in the niche but can’t form your niches, it isn’t super relevant. Being free to go starve with your sucking hunter skills doesn’t prove that obligatory group activities would dismantle if they were too bad. If there is enough slack to have 10 minutes a day to learn over a year to be non-starving hunter then niche construction can be exercised by having a significantly worse standard of living. But in a sense this is inventing the wheel again just to avoid being commanded by others. Rather you want to find other people that are also fed up with their niches (which can potentially be very different) and then jump straight to a big group oblicatory activity with more comfortable niches. The deeper your specialization the more you are dependent on a bigger outside social order to be static and can expect it to respond slower to your changing needs. The bigger the changing units the bigger the chaos to move from one order to the next. This even if there was nobody orchestrating it. You could have people deliberately orchestrating it. But there is the danger that people with little room to move are easy to organize and some could organize the relations to the benefit of the organizer or society as a whole instead of the ones being organized. If the organizer is doing a bad job or is doing a too self-serving a job the cogs can only squeal. Like being symphatetic for slaves easily turns to hoping that none was a slave, people should not be myopic about the their role in society and helping the cogs involves making sure that they can do more than “just their job”. And it seems if an agents freedom is predicated on another agent not having freedom the result is going to be constant straife. If your money is predicated on me not having money this is an arrangment that can not withstand prosperity.
I think an important part is that the interests of all employees are (hypothetically) aligned. So even if you only own 1/1000 of the company, the remaining 999 shareholders also vote for the things you want. As opposed to your example when someone buys 1/1000 of the company, but has no impact on the outcomes, because the remaining 999/1000 votes are incompatible.
Wow. I have to admit I hadn’t heard that dimension before, and I’m not sure I get it. Humans are generally not aligned, especially on the level of who gets what jobs and how much they get paid. Does that mean it’s impossible in the real world? Or do I completely miss your point?
Workers at a business are generally more aligned with each other than they are with the shareholders of the business. For example, if the company is debating a policy that has a 51% chance of doubling profit and a 49% chance of bankrupting the company, I would expect most shareholders to be in favor (since it’s positive EV for them). But for worker-owners, that’s a 49% chance of losing their job and a 51% chance of increasing salary but not doubling (since it’s profit that is doubling, not revenue, and their salaries are part of the expenses), so I would expect them to be against the policy.
The same goes for things like policies around worker treatment—if a proposed policy would increase profit by 10% but make workers have a much more unpleasant environment, shareholders would probably vote in favor while worker-owners would vote against.
Obviously there are some shareholders who would go against their profit motive for improving the lives of stakeholders (see ESG funds), and workers who would choose a chance for more money over better working conditions or a lower chance of lowing their job. But I would generally expect the two groups to disagree with each other but be aligned internally.
I always like it when I can upvote and disagree :)
I think you have to be in VERY far mode, and still squint a bit, to think of that as “alignment” to the degree that distinguishes socialist from conventional organizations. Sure, employees as a group will prefer higher median wages over more profits (though maybe not if they’re actual owners to a great degree), but I have yet to see a large organization where workers care all that much about other workers (distant ones, with different roles, who compete for prestige and compensation even while cooperating for delivery).
Conventional org owners/leaders care a lot about worker retention and productivity, which is often summarized as “satisfaction”. I have seen no evidence in my <mumble> years at companies big and small, including both tech and non-tech workers that office workers care more about warehouse workers than senior management does. There is probably slightly more for warehouse workers caring about workers in other warehouses, but even then, there’s cut-throat hatred for closing “my” warehouse rather than someone else’s.
Without the qualifier “different roles” I had in mind that you can privately not like peeing into to a bottle to be pretty well correlated with your coworker also not liking it without you considering each other.
And then when I apply the same about office workers thinking about warehouse workers peeing in bottles it seems they would not be ambivalent but slightly against.
While it is quite easy to see a manager wanting a policy that has 10% number increase and no numeric effect on any other number to be default in favour.
In reverse this can be seen that a worker is unnaturally insulated about the meangingfulness of their task. Moving boxes day in day out probably feels very samey, while a manager can see that now we are serving this nationality people and now that. Or indeed that with no increase customers per worker might be 10 and with 10% increase we have 11 customers per worker. And offcourse customers have a difficult time telling whether their packages were done pee-bottle-free.
While workers are not especially knowledgeable they are uniquely situated for certain kinds of information. So even if they are not especially homogenous the dimensions on which they base opinions on are probably the same. Also if you know you are powerless it is easy to not care. If you are an office worker and know you do or could have a say, “pee bottles in my company” activates accountability differently. If you are not so situated you will probably frame is as “their company”, “company I work at”, “Big dude that breaths into my neck is equally asshole to those guys too”.
If workers own the company, they might agree on more vacation, no unpaid overtime, better working conditions, etc. These would be the shared preferences.
If someone else owns the company, they will typically want a CEO who squeezes out of the company as much profit as possible. Everything else is purely instrumental. Yeah, it might happen that giving people more vacation is good for attracting talent that generates more profit, in which case the company might also decide to provide more vacation. Or maybe the CEO decides that vacation is irrelevant, or should only be given to people working at certain selected positions. Basically, from the perspective of a worker it is mostly random, but more often bad news.
If you are one of 1000 workers, and you own 1/1000 of the company… but other workers did not buy shares, so 999/1000 of the company is owned by someone who doesn’t work there, do not expect the company to be any nicer to you than is strictly necessary.
EDIT: After reading your other comment...
I think that people are more likely to empathize with people in a similar role than with people in a different role. As an “individual contributor” myself, I find it natural to empathize with people who have to do overtime and hate it. But who knows, maybe in a parallel world where I am a manager, I empathize with managers who get frustrated with the lazy bastards who prioritize their family and hobbies over getting their boss a well-deserved bonus.
But even if I had zero empathy towards people in a similar role, arguing for the benefits of everyone is a Schelling point. I can get more support for “more vacation for everyone” than for “more vacation for Viliam”.