You start by talking about democratic governance, but then switch to firm ownership. Employee ownership is easy to measure, but does it actually result in information flows? Some people insist that there is a big difference.
To see the difference between merely giving stock and letting workers shape their destiny, look at the airline industry. In return for lower wages in 1994, United Airlines pilots and mechanics got more than half the company’s stock. But life inside the cockpit and at loading ramps barely changed. By contrast, Southwest Airlines employees own only about 11% of the company’s stock, but the company works to encourage and implement workers’ suggestions, in part through town hall-style forums with top management. While there are other important differences between the carriers, workplace culture is a big reason United posted record losses last year while Southwest made a healthy profit–as it has for 29 years.
Southwest had good governance. Did this have any connection to distributed equity? How?
Anyhow, from a theoretical perspective, owning 1/1000 of the firm while having 1/1000 of the responsibility is pretty big free rider problem. If you can make your small part of the firm more efficient, it won’t show up in your equity. But just being an employee is theoretically a big incentive to keep the firm surviving. The 1/1000 of the equity seems negligible compared to that.
You had a lot of sources in this post. Half of them are only about ownership, because that’s easy to measure. Do you believe them? If not, why cite them? If so, then why not talk about mere ownership?
But the other half are even less believable because control isn’t measureable. Good governance is good. But how can you even classify governance as democratic? Are the Southwest town halls democratic? Or are they classified as democratic because the writer like the company?
Your previous post mentioned a lot of pitfalls, but I don’t think the United example fell into any of them. And I don’t think they are important. Most employee stock is voting shares, but there are so few votes it hardly matters. What is important the large number of small decisions.
You start by talking about democratic governance, but then switch to firm ownership. Employee ownership is easy to measure, but does it actually result in information flows? Some people insist that there is a big difference.
Southwest had good governance. Did this have any connection to distributed equity? How?
Anyhow, from a theoretical perspective, owning 1/1000 of the firm while having 1/1000 of the responsibility is pretty big free rider problem. If you can make your small part of the firm more efficient, it won’t show up in your equity. But just being an employee is theoretically a big incentive to keep the firm surviving. The 1/1000 of the equity seems negligible compared to that.
No, ownership is not the same, I explicitly said so in a previous post: https://www.lesswrong.com/posts/7bqzFLqEoz44y6C6o/why-giving-workers-stocks-isn-t-enough-and-what-co-ops-get
You had a lot of sources in this post. Half of them are only about ownership, because that’s easy to measure. Do you believe them? If not, why cite them? If so, then why not talk about mere ownership?
But the other half are even less believable because control isn’t measureable. Good governance is good. But how can you even classify governance as democratic? Are the Southwest town halls democratic? Or are they classified as democratic because the writer like the company?
Your previous post mentioned a lot of pitfalls, but I don’t think the United example fell into any of them. And I don’t think they are important. Most employee stock is voting shares, but there are so few votes it hardly matters. What is important the large number of small decisions.