Richard D Wolff: Democratize the Corporations

[mu_enrico]

Marxist professor, Richard D Wolff lays down a plan for companies in a socialist economy. Here are some of the points he made about  "Democratize the corporations:"

- One worker, one vote
The decision about what to produce, when to produce, etc., is a collective decision instead of the top management decision. This means skilled workers have the same vote as the janitors.

- Workers-owners
The workers are also the owners of the company; therefore, they get to choose what to do with the profits.

- Not profit maximization
Worry about machines replace your job because it will lower costs? It's not a problem with this democratic corporation since the goal is to keep the workers happy.

Do you guys like this concept? I smell at least a part of the spirit is present in the DAO or DeFi. Feel free to comment

Source:
- https://www.youtube.com/watch?v=9OzV6jtc9OQ
- https://www.youtube.com/watch?v=ynbgMKclWWc

[1715166475]

1715166475

[1715166475]

1715166475

[1715166475]

1715166475

[1715166475]

1715166475

[Ucy]

I think the votes of skilled, experienced or the best workers/customers in fields they are familiar with should be stronger. But we should be able to determine who is qualified or is best by rating them on how well they do their jobs, how satisfied people (especially customers) are about their works, how well/fast they do their jobs without compromising on good standards or without breaking any of the good rules... or without breaking too much rules.



Assuming a business want to vote on what new foods to start selling to their customers, how will they prevent voters from voting for bad/unhealthy foods? And how do they determine what food is actually bad/unhealthy, or what makes food bad/unhealthy? I think they will need to get the opinion of qualified people in that area, get the opinion of consumers on what food makes them healthy, full of energy, thinks clearly, happy etc. The consumers will need to explain how they really feel in particular period of time after consuming such foods. And people who are qualified/skilled/experienced in good food or nutrition should be available to verify/research/experiment on the claims to determine if the food do what people claim they do, with little to no side effects/problems to the consumers health.
So, such qualified people must have gotten lots of positive feedback or good reputations from users who have tried their  recommendations and have quickly become healthy/better on relatively cheap costs or for free. Their recommendations should be peer reviewed by other qualified people.

I think this and more can work pretty well with decentralized consensus driven businesses or companies. Can easily be corrupted in centralized system.

Everyone (worker and customer) should be rewarded according to how well they do their jobs. Just get everyone to agree on safe/good boundaries that should not be crossed, then reward them based on how well they do their jobs without crossing the boundaries

[HeRetiK]

This sounds a bit like the organizational structure of food cooperatives:
https://en.wikipedia.org/wiki/Food_cooperative

However food cooperatives are a special case in that the owners / members are also the customers, so I'm not sure how well this concept can be applied to other businesses.

- One worker, one vote
The decision about what to produce, when to produce, etc., is a collective decision instead of the top management decision. This means skilled workers have the same vote as the janitors.

This sounds good in theory, but in practice the question will be where to draw the line on what to vote on. How much to produce? How to market the product? How the ads should look like? Running a business involves a lot of decision making and usually you delegate the concrete implementation of strategies to stratified levels of specialized management units for a reason.

- Workers-owners
The workers are also the owners of the company; therefore, they get to choose what to do with the profits.

I guess to some extend you see this with start-ups where founders and sometimes key members of the team get shares or options. The challenge that fully democratized corporations would face in this regard is incentivizing founders to actually start one. Why bother starting a corporation where you only own a fraction of the profits if you could start one where you can take as much as you want?

- Not profit maximization
Worry about machines replace your job because it will lower costs? It's not a problem with this democratic corporation since the goal is to keep the workers happy.

Profit doesn't need to be the primary focus but refraining from the usage of machines that could make a job easier doesn't sound practical. I don't think there's a farmer in the world that has complained about new equipment cutting his work time in half.

[yhiaali3]

Marxist professor, Richard D Wolff lays down a plan for companies in a socialist economy. Here are some of the points he made about  "Democratize the corporations:"

- One worker, one vote
The decision about what to produce, when to produce, etc., is a collective decision instead of the top management decision. This means skilled workers have the same vote as the janitors.

On the first point, I do not think it is right for skilled workers to have the same voices as cleaners, there are some delicate issues in production that cleaners cannot fully grasp because their experience is so little and does not allow them to determine what is best for production or other technical matters.
There is a difference between justice and equality. All people are equal in terms of their rights and duties, but they are different in terms of their qualifications and capabilities and therefore they must be distinguished on this basis.
I agree that there is equality between the skilled worker and the cleaning worker, but not in all things but rather some general matters and the interests and rights of workers. As for production, it must be decided by the most skilled and experienced workers.

[Upgrade00]

- One worker, one vote

It's possible to have an open cooperation and make multilateral decisions based off opinions of others. But there exists a core need for a management team to decide what is voted on. They draw up the best possible options based on their experience and expertise. This would also need to be done across various layers; a cook at a restaurant could no very little about the best means of advertising, but would be able to decide on the recipe for a dish.

- Workers-owners
The workers are also the owners of the company; therefore, they get to choose what to do with the profits.

So technically, one would build an industry from scratch with their capital and every subsequent employee would automatically become a shareholder? This would greatly discourage investments; financial and intellectual.

- Not profit maximization

I can agree with a business which isn't entirely financially motivated but concerned with the livelihood of iits community of workers

Do you guys like this concept?

It has some merit but I can hardly see it implemented except of course with some compromise. The problem seems to stem from the higher class doing one over the bottom. If decision making was split across the various levels within an organization with each bringing a representative(s) looking after their interests and ultimately that of the organization we could have a healthy work environment.

[plvbob0070]

Looking at the bigger picture, it's hard for me to imagine this concept in the corporate world simply because not all employees or workers will think of the benefit of the company as a whole. Usually, employees at the lower-level management would only think of themselves and their own benefits (if they are getting the right salaries and such) since it's not their job to focus on the company's status.

- One worker, one vote
The decision about what to produce, when to produce, etc., is a collective decision instead of the top management decision. This means skilled workers have the same vote as the janitors.

It's a nice idea to give every worker the same opportunity or right to vote for something. But since it's a business where they are competing in hundreds of other businesses in the industry, I think it's more appropriate to give that right to "vote" for those who have knowledge in that field or area.

- Workers-owners
The workers are also the owners of the company; therefore, they get to choose what to do with the profits.

It takes a lot of decision making what to do with the profits and how they will manage the flow of cash in business so just like what I said, it needs knowledge about a certain field. If all workers get a chance to choose what to do with the profit, I don't think companies will have a concrete plan on running the whole business.

- Not profit maximization
Worry about machines replace your job because it will lower costs? It's not a problem with this democratic corporation since the goal is to keep the workers happy.

With technological innovation, businesses really need that in order to operate smoothly. But it does not mean that it will replace employees because most jobs still require manpower and direct labor.


it's not that I'm completely disagreeing with this concept, I just can't picture it out yet. But I really got curious about that one video, I just find it too long to watch it right now. I will try watching it at another time and maybe it can change my perspective.

[NotATether]

No, it's a bad idea, if only because the workers and other auxiliary staff don't have the leadership skills of top management. They did not take management courses, and thus do not know how to lead a corporation in a crisis, e.g. let's say company X is a democratized corporation that suddenly gets a ligitation from company Y for various allegations, will all the workers voting on whether to get a mediator or go to court arrive at the best decision? The decision the workers make is usually guided by groupthink and opinion, which have clear conclusions, but very, very vague and unclear reasoning and motivation behind it, and not by facts.

Or let's take the example of an Executive Vice President of products, if everyone, instead of him and a select other few, were to decide what products will be made next then everyone will be consulting their own opinion for this, ignoring market trends, because most of them don't and aren't supposed to have access to them as per their job role, and if you don't choose a product to make or improve based on market trends then you are gambling in that industry and will almost always fall behind competitors' equivalent products.

There's a reason Gartner's market reports are expensive to buy, because they have tons of valuable information in them that only business leaders understand. You can't show any employee a whitepaper full of research and expect them to retain most of it, if any of it at all, because that is not their expertise.

Then you have the problem of workers voting some way because another person told them to do that, or they vote out of enmity of a fellow co-worker. So suddenly all business decisions become embroiled in office politics and the corporation will be unable to do their business affairs in a timely manner and this will affect its solvency as without conducting affairs and making cash flow it gets more in debt.

[el kaka22]

People are forgetting that running a country and running a business are different things that matter to different people. Now for example when you are running a country all of the nation is in charge of that because everyone gets affected by it, but when you are running a company only that company will be affected, basically you can bankrupt it all and it would still not matter to too many people unless you are bankrupting a huge 100k+ total worker global company. That is why you wouldn't want democracy in a company, you would want the worst type of fascism if you can, the only reason for that is the fact that only one person (or multiple) will be affected when they profit or when they lose.

If the owner gives the rights of ownership to workers, what is the point of owning a business, that is basically a bunch of people working together and starting a business, which you can totally do.

[mu_enrico]

This sounds a bit like the organizational structure of food cooperatives:

Cooperatives don't have to be in the food industry, it's just the organizational structrure.

I couldn't see a single marxist supporter here? What happened?

[Cnut237]

I couldn't see a single marxist supporter here? What happened?

I hadn't found the thread

- Workers-owners
The workers are also the owners of the company; therefore, they get to choose what to do with the profits.

This is a good idea and is often suggested by the left. Worker representation on remuneration committees would help, too. But there are limits to what we can expect a company to do, if we don't change the framework within which it is operating. Certain changes need to be implemented at government level, such as legislation on executive pay ratios.

- Not profit maximization
Worry about machines replace your job because it will lower costs? It's not a problem with this democratic corporation since the goal is to keep the workers happy.

I'm not sure. This suggests that it is better to work inefficiently. There is a difference between keeping a worker in a job, any job, and keeping a worker in a worthwhile job. If efficiency gains are shared more equally, then there is no need to maintain jobs just for the sake of it. If an office worker's job can be automated out, then should we a) keep the worker doing a job that can be done for $0 by a computer, or b) give the job to the computer, take the money saved and use it to pay the worker to do a job that helps society? Again this is a change that would need government-level support.

[HeRetiK]

I couldn't see a single marxist supporter here? What happened?

Thing is, the suggested approach is more extreme than anything that was ever realized in communism. Arguably this might be why communism failed for the most part (ie. wrong implementation of the aspired ideals), however it goes to show how radical and hard to implement such an approach would be.

[tbterryboy]

Do you guys like this concept? I smell at least a part of the spirit is present in the DAO or DeFi. Feel free to comment

I am sorry that I don’t get how few things are feasible? How can the skilled workers and the janitors have the same votes?
I will only say they should have the same rights in other ways but not in decision making that has to do with running the company.
Those skilled workers have a task they were employed to do in that company, and they have the right to make full decisions when it comes to those tasks; everyone should only have a say in the areas they are skilled at... A janitor can’t make the decisions for a programmer.

[wxa7115]

Do you guys like this concept? I smell at least a part of the spirit is present in the DAO or DeFi. Feel free to comment

Source:
- https://www.youtube.com/watch?v=9OzV6jtc9OQ
- https://www.youtube.com/watch?v=ynbgMKclWWc

What I do not see in any of those points is where the capital is going to come from? In order for a business to function you need at least two things, you need capital and a workforce, it seems this professor is not taking into account that those that put forward the capital are taking a greater risk than the worker that just shows up to work, the owner is risking his life savings and his time while the worker is only risking his time, that is a big difference.

Just as an example, in December of the last year a new restaurant opened near my home, 7 months later that restaurant has closed its doors, while whoever worked there lost their job they have moved on and probably already got a new one, while the owner is probably dealing with the fallout of his decision, every economy based on common sense dictates that whoever risk the most should get most of the rewards otherwise it is not worth to take the risk, and this is why communism keeps failing as deep down it does not make any sense.

[mu_enrico]

What I do not see in any of those points is where the capital is going to come from?

I think capital comes from the "tax," where each worker gives some amount of money. Also, the community can utilize excess capital from a particular member. For example, Mr. X has a big house with big rooms, then the community can use one of his rooms.

I am sorry that I don’t get how few things are feasible? How can the skilled workers and the janitors have the same votes?

Not every decision gets to the voting mechanism because voting is usually the last resort to solve the problem. Now, the key is about collective decision making so we as the community can discuss the problem to reach a consensus agreement. The programmer can persuade/educate the janitor to reach the consensus agreement.

Certain changes need to be implemented at government level, such as legislation on executive pay ratios.
...
Again this is a change that would need government-level support.

The professor argued that this democratic corporation needs to be implemented first. Then the government will follow and not the other way around. That said, problems or obstacles should be solved within the community as a whole. Surely the decision will be for the best interest of the community.

Interested in socialism?

[Cnut237]

Certain changes need to be implemented at government level, such as legislation on executive pay ratios.
...
Again this is a change that would need government-level support.

The professor argued that this democratic corporation needs to be implemented first. Then the government will follow and not the other way around. That said, problems or obstacles should be solved within the community as a whole. Surely the decision will be for the best interest of the community.

He's the expert and has given it a lot more thought than I have... but I've always thought that a vital part of the government's role in current Western societies is to act as a brake on the excesses of capitalism. I'm generalising, but people who run big businesses tend to be interested more in personal remuneration than in the welfare of their lowest-paid employees - which is part of why unions are useful. If you ask companies to make these changes, maybe some will, but a lot won't. There is the possibility that some companies will implement such changes as a PR exercise - Fairtrade is an example here. But I don't think it will become socially unacceptable for companies to exploit workers, because public opinion is driven largely by mass media, which is controlled by self-interested rich people (which is a reason that right-wing parties generally do better than left-wing parties in elections). Whereas if a government implemented a limit on executive pay ratios, or demanded worker representation on boards, then companies would have no choice but to fall into line.

What I am saying is that I wouldn't trust the board of a company to work towards fairness and wellbeing - history demonstrates that they will instead work to line their own pockets. Whether this is because of their innate nature, or because we are indoctrinated into believing that money is the ultimate objective and the ultimate barometer of success is perhaps a question for a different time. Either way, the answer would be for government to create a barrier to their innate nature or to restructure society so that money is not the ultimate aim. I don't think we can rely on this to just happen by itself.

Interested in socialism?

I think a reason that communism failed is that it is so easily corruptible. I think that people who are more talented, who work harder, who are willing to take risks and responsibility, should be rewarded more than others. I am in favour of a degree of inequality because that gives people something to strive for, and a sense of recognition for their achievements. But inequality beyond a certain point becomes undesirable because of the social problems it creates. I think that inherited wealth is a huge problem that creates inbuilt privileges. Wealth as a whole should be taxed. As for Marxism, it is good in principle but will I think become outdated as increasing waves of automation arrive. The power of the proletariat does not exist in a society where there are fewer jobs than there are applicants. Smart contract cryptos such as Ethereum may hasten the demise of workers through automation of white-collar jobs (mortgage broker the oft-cited example). But this is not a bad thing - efficiency makes sense. There is no point to keeping workers in jobs that can be done better by machines - just allow jobs to be automated out, and use the resulting profits to create jobs that benefit society. There is no sense in being a Luddite. Progress through change is desirable.

I suppose, simply, I am in favour of a meritocracy, but with a limit set on how much inequality is permitted.

[figmentofmyass]

Cooperatives don't have to be in the food industry, it's just the organizational structrure.

+1. consider credit unions vs banks. when shareholders are cut out of the equation, cooperative members split the spoils among themselves. in the case of credit unions, that means lower interest rates for borrowers and higher interest rates for depositors. this model can theoretically be applied to most sectors.

worker-owned businesses is a nice idea, but i still have trouble seeing how we get there from here on a large scale.

mondragon is probably the most interesting example of large scale worker cooperatives. https://en.wikipedia.org/wiki/Mondragon_Corporation

[HeRetiK]

Whereas if a government implemented a limit on executive pay ratios, or demanded worker representation on boards, then companies would have no choice but to fall into line.

Unfortunately companies get really creative when it comes to circumventing regulation.

Introduce a limit to executive pay ratio? "Outsource" cheap labour to an "external contractor".

Introduce a limit to how many people a company can hire without actually employing them? "Downsize" your company and buy cheap labour from multiple "external contractors" that all "follow regulation".

Note that I'm not arguing against regulation, but pointing out how tough it is to get companies to follow them.

[...] or to restructure society so that money is not the ultimate aim.

To me this seems like the only way to get real change, as everything else is merely trying to treat the symptoms rather than the root cause. The introduction of universal basic income seems to be the only way to get there though.

mondragon is probably the most interesting example of large scale worker cooperatives. https://en.wikipedia.org/wiki/Mondragon_Corporation

Very interesting indeed, thanks for the link!

[Cnut237]

Unfortunately companies get really creative when it comes to circumventing regulation.

Yes, agreed. It's a matter of closing loopholes faster than they can exploit them, and is an endless task.

[...] or to restructure society so that money is not the ultimate aim.

To me this seems like the only way to get real change, as everything else is merely trying to treat the symptoms rather than the root cause. The introduction of universal basic income seems to be the only way to get there though.

Thank you! Every time I've mentioned UBI on this forum I've been shot down; this is the first time I've found someone else who thinks it might be worth a go.

[wxa7115]

Certain changes need to be implemented at government level, such as legislation on executive pay ratios.
...
Again this is a change that would need government-level support.

The professor argued that this democratic corporation needs to be implemented first. Then the government will follow and not the other way around. That said, problems or obstacles should be solved within the community as a whole. Surely the decision will be for the best interest of the community.

Interested in socialism?

There has been several attempts at this on the past as well and as you may guess it has not ended well. This is a link to one of those attempts.

https://fee.org/articles/marxism-on-the-menu-why-the-communist-restaurant-failed/

It is precisely because of this that communism gets imposed from the top and then it goes down from there, while capitalism imposes itself from the bottom and then goes up, this is how capitalism ends up corroding any attempt to create a fully communist country as black markets emerge that are simply more effective at pricing things and obtaining revenue, while many think of black markets as the economic activity related to illegal goods, the truth is that under a communism dominated society capitalism itself becomes illegal and it has no place to go except the black markets.

The discussion about communism vs capitalism should have ended long time ago when the US defeated the USSR not through war but thanks to their superior use of their resources, a.k.a. capitalism.

[figmentofmyass]

Unfortunately companies get really creative when it comes to circumventing regulation.

Introduce a limit to executive pay ratio? "Outsource" cheap labour to an "external contractor".

Introduce a limit to how many people a company can hire without actually employing them? "Downsize" your company and buy cheap labour from multiple "external contractors" that all "follow regulation".

Note that I'm not arguing against regulation, but pointing out how tough it is to get companies to follow them.

it's not just businesses. those loopholes are intentionally built into the law. most regulations are structured to hurt small businesses and benefit large corporations under the guise of protecting consumers. that should come as no surprise since it's support from big corporate lobbyists that is getting politicians elected in the first place. quid pro quo....

[...] or to restructure society so that money is not the ultimate aim.

To me this seems like the only way to get real change, as everything else is merely trying to treat the symptoms rather than the root cause. The introduction of universal basic income seems to be the only way to get there though.

doesn't UBI just treat the symptoms too? it doesn't restructure the class system or property ownership. it just doles out a small entitlement---just big enough to keep the population from rioting and revolting.