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October 17, 2008

Comments

Bob B

In principle, I'm a thoroughly dedicated enthusiast for bottom-up control - except that I suspect it would soon end up with the quality of debate exhibited by most local councils or tenant associations.

Granted that the John Lewis Partnership is a success story of a producer co-operative, we still need to ask why there are so few other examples if co-operatives are so good.

tolkein

This is why encouraging meaningful staff share stakes is such a good idea. Staff feel likes it's their business, even if, in reality, their shareholdings are trivial. Worked well for the fund management firm I worked for. And that's why (small) partnerships can work well. I'm not so convinced about large partnershiops such as accountancy or law firms. These are too big for staff to feel part of them and anyway, outside the partners, the workers have no stake.

tom s.

I have a theory that the success of the US is that exploited workers work hard even though they are being royally screwed. Collectively this makes for a productive economy.

Kevin Carson

To turn the argument around, the reason the kind of "investor capitalism" Michael Jensen championed has been such a disaster from the '80s on is that it weakened bottom-up control of corporate management. Of course shareholder control of management is a myth. But it's a pernicious myth, because it serves to legitimize the independence of corporate management from internal stakeholders. They can expropriate the value created by human capital, gut that human capital, and hollow out productive capability to game their short-term bonuses and stock options--and then say "I have no choice; it's all for the stockholders."

David Snell

You may find enlightenment in reading 'Decline and Fall of the Roman Empire'. A succession of CEO's had exactly that need (for the support) of their subordinates.
However, what the subordinates most wanted was to be CEO to gain personal control of the cash flow. They had no scruples about making the CEO look bad in order to drum up support for a (boardroom) coup. Only the really evil CEOs survived for long.
The result of all the infighting for the Empire was inexorable decline. It took a long time (over 1000 years) mainly because the external enemies were relatively very weak. But in the end, the co-op model polished off the Roman Empire.

David Snell

You may find enlightenment in reading 'Decline and Fall of the Roman Empire'. A succession of CEO's had exactly that need (for the support) of their subordinates.
However, what the subordinates most wanted was to be CEO to gain personal control of the cash flow. They had no scruples about making the CEO look bad in order to drum up support for a (boardroom) coup. Only the really evil CEOs survived for long.
The result of all the infighting for the Empire was inexorable decline. It took a long time (over 1000 years) mainly because the external enemies were relatively very weak. But in the end, the co-op model polished off the Roman Empire.

jameshigham

I'm actually thinking seriously about starting up a co-op to fund our several ventures.

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