Thursday, September 17, 2009

Worker Owned Businesses - the Wave of the Future

Interesting spotlight on worker-owned businesses in the CNN Small Business section (here).

In theory, the worker-owned business (WOB) should be superior to a non-WOB. For one, the WOB would have a more motivated employee base.

More importantly even than that, the WOB is simply an economically superior entity. Because profits are not being siphoned off to an ownership group, the WOB should also be able to operate at lower margins. For the WOB, the bare minimum cost is employee salaries, but for the non-WOB, the bare minimum is employee salaries plus ownership profits. In tough times, the WOB becomes more competitive because it can lower employee salaries and still operate at full power. A non-WOB has to fire employees, which leads to lower overall output, forcing the understaffed business to operate at a competitive disadvantage.

So, why don't we see more WOBs? Ignorance and capital barriers are the main forces preventing WOBs from proliferating. Ignorance, simply because most people have never heard or thought of such a business arrangement. Capital barriers, because most people who would like the idea of a WOB are too poor to set one up.

Some might say that greed is a barrier to WOBs, but that is not true. It is true that most people who have the money to start a business are dreaming of their own personal enrichment. However, the power of greed can be harnessed to advantage WOBs as well, specifically, the greed of the disemplowered worker.

The WOB cannot be sold to the general public on the basis of overcoming greed or other utopian ideals. Such economic utopianism has failed time and time again. The establishment of the WOB is an act of greed by the workers who establish it, and that fact should be recognized. The purpose of the WOB is to leverage its inherent advantages to wipe other non-WOBs out of the market.

Even the barrier of capital is somewhat of an illusion. A business that requires 20K to capitalize is out of reach for the average worker. But say that business requires 10 employees -- that is really just a capital barrier of 2K per employee, which is not out of reach.

In the end, the establishment of a WOB is mainly prevented by ignorance, ignorance of its possibility and ignorance of how to accomplish it.

It is no accident that business textbooks do not list the WOB as one of the basic business entity forms. That is part of the conspiracy of intentional ignorance that keeps people enslaved. The artificial constraint of possibilities is the ultimate method of thought control, effectively preventing people from even contemplating certain lines of thought.

The victory of WOB is substantially enabled simply by publicizing their possibility. By making intelligent but dispossessed people aware of their possibility, the natural creativity of humankind is unleashed, making their implementation an inevitability.


John R. said...


Did you see Steve Keen on Max Keiser's show? He actually used the word "jubilee". Check it out on utube, the Max Keiser video from Sept. 18th, pt. 3

-John R.

Justin said...

That is spectacular! Thanks for the tip, John, I will check that out.

wraft said...

A good book on capitalism and worker owned business is The Capitalist Manifesto by Mortimer Adler and Louis Kelso.(1959)

Adler relates capitalism to Aristotle's notion of leisure time and concludes that capitalism is the best system because it affords the most opportunities of leisure time to the most people.

By leisure time Adler/Aristotle means those activities such as law, art, politics which are beneficial but are not connected to earning subsistence income. in Adler's view, people should work and save until the age of 35 or 40 and then retire and live off their investments. Kelso was the originator of the ESOP, the Employee Stock Ownership Plan.

In looking at the tax code in 1959, the authors concluded that the code was unfavorable to saving by workers and should be changed.