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November 20, 2019

Comments

pablopatito

In general, would you expect nationalisation to increase or decrease productivity, based on the issues you've outlined with listed companies?

Ben

One of the main problems is the idea that managers do not need to have any knowledge of the business they are managing. This has spread to government where expert knowledge is despised and data is manipulated to suit cutting costs.

Kevin Carson

The productivity gains from the shorter week itself would probably pay for it, never mind any other changes in ownership or incentives.

georgesdelatour

1. “Stock market-listed firms, he said, contain “widespread waste and inefficiency” because an of “absence of effective monitoring” of bosses by shareholders.” - Maybe this is principally a size-related effect. I’d expect corrective feedback mechanisms to operate better in smaller firms than larger ones.

2. “Workers know the ground truth of how the company is performing better than do external shareholders.” - I doubt this is true at all for very large companies with huge global supply chains. The person washing the M&S salad in Africa, or the Foxconn employee in Taiwan, will have a very incomplete understanding of how well M&S or Apple are actually doing.

3. “Many workers have more skin in the game than do fund managers; whereas workers lose their jobs if the firm does badly, fund managers face less severe penalties.” - I understand that argument. But things may not play out that way in practice. In particular I’d expect worker-run companies to be relatively risk-averse. There may be occasions where the only way to save the company is by rapidly transforming the entire product line. This is what Nokia needed to do (and failed to do) after the introduction of the iPhone. Would workers in the Nokia factory have understood this better than, say, outside analysts?

George Carty

Georgedelatour, certainly Nokia's _factory_ workers wouldn't have understood their firm's predicament, but perhaps their _marketing_ staff would have when they saw their own product sales cratering as customers embraced smartphones?

MJW

I'm willing to believe some level of worker ownership will raise productivity, but what happens when more efficient practices mean greater productivity but less need for certain workers? We have this on the railways now, where guards don't want to give up responsibility for closing doors because it weakens job security.

Besides, the key message from Labour is not that it is aiming to be more efficient or more productive, but that it's going to chuck loads more resources at certain things, and it's going to control the situation to make it redistributive even if that means inefficiency. For example the great broadband giveaway offers zero evidence for how civil servants will deliver the challenges more efficiently, or given the leaps forward since deregulation, why things will be better this time round!

LJC

I recommend the book "Tragedy & Challenge" by Tom Brown as a clear explanation why UK productivity is so poor.

https://www.amazon.co.uk/Tragedy-Challenge-Engineerings-Decline-Economy/dp/1788035313

In Germany, the supervisory board contains the worker representatives.

https://www.handelsblatt.com/today/companies/handelsblatt-explains-why-german-corporate-governance-is-so-different/23581290.html

cjcjc

Germany's strength lies in the unquoted sector but still worth observing that German market cap in total is less than the sum of Apple and Microsoft...

Paine

Firm level worker perspectives
On labor saving innovations
are
Greatly constrained
by macro contrived
Job scarcity

End job scarcity

Invert
the Beveridge ratio

By macro demand management

make job selection
a matter of wage earner choice
not corporate hiring screens

georgesdelatour

"make job selection
a matter of wage earner choice
not corporate hiring screens"

Especially jobs like heart surgeon, airline pilot, air traffic controller, structural engineer, fugu chef.

georgesdelatour

@George Carty

I appreciate that the marketing workers might spot the lack of consumer enthusiasm for Nokia products before the manufacturing workers do. But think about the company whose products were destroying Nokia’s market share - the second Steve Jobs era Apple.

Starting with the Bondi Blue iMac G3, Jobs and his team kept coming up with innovative, attractive-looking products which sold well and transformed the business. They were mostly well-marketed. But the marketing department was never allowed to actually drive product design. That was always down to a very small team, including Jonathan Ive, but most of all Jobs himself.

I don’t think those innovations would have happened if every Apple employee had a vote on each new product, because most people are 1) quite conservative and 2) quite risk averse. With the iPhone, most employees would have said 1) we’re not a phone manufacturer, and 2) people like pressing buttons…

KG

Maybe the audience were laughing because Labour has spent most of the last decade saying that real wage income is not high enough, and seems now to be proposing that we take days off in lieu...

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