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Nationalization of control vs nationalization of ownership

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Teppo Särkkä

Mostly from reading stuff by Richard Wolff I got the idea that it can be easier to just have all or at least the natural resource/necessity -producing corporations changed in such way that the shareholders make all workers of the company into board members, removing any other board members. Board can alternatively consist of representatives from among the workers, decided by workers voting, in case there are thousands of workers in one corporation. Otherwise it will be the biggest board ever (it may not be a bad thing).

This means that the workers decide about pretty much everything (through board participation as it is normally done) regarding that company, including decisions about how much dividend the shareholders get, appointing all executives, how to use the profits of the company, how much wages each employee gets and so on. Workers will, in general, have more consideration for the locality they are working in, and this will have positive social effects, hard to say how widespread effects but surely quite significant ones. The incentive for shareholders to do such transition into worker-control is that the government would decrease the tax rate of that company by for example 50% for the duration that the control is passed on to workers. If the shareholders want control back, making themselves board members again, the tax incentive would be cancelled.

Of course there are many issues with the idea, but this seems to be a simple, seemingly small change that would have profound positive overall effect in a society. Typical variety of shareholders in any large corporation are often "absentee" in every sense of the word, regarding the interests of the workers and society, so it is better they do not have control. Shareholders always have the right to sell their shares if they want to, so they would not lose their "wealth" in that sense, because of this power transition. The value of the company could even increase in some cases, because of the change.

This would solve the issue about how to compensate the shareholders of a natural resource/other corporations for the nationalization. There still remains the issue about making all employees well-informed so they can decide responsibly about how the company relates to society, including perhaps using some of the company profits to support local schools and parks etc. as an example.

Also, will a government provide such tax incentive, is the question. Corporations evade their taxes anyway, so it would not decrease government tax income much. Maybe would even increase tax incomes over time.

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33740097213efb2a717d218229e2ad0e?s=45&d=identicon
Teppo Särkkä

One thing to add is that if the ownership nationalization is a longer term goal, this control shift could be a step in-between.

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Leila Zamora Moreno

Hey Teppo,

Yes - that is another way to go about it. This is a topic which comes up again and again, that in the end - it doesn't matter 'who owns' or 'who controls' a company (public, private or mix); but that the most importont factor of success and viability is HOW the company operates. A 'market failure' or 'government failure' then doesn't represent the viability/effectiveness of a particular domain - where a single failure in operation is taken as a generalisation of how the whole operates; rather than looking at the incident within its specific context, identifying where what went wrong and how it can be corrected.

I very much like the idea of having any shareholder hold an obligation of responsibility towards the company. This could also be something that can be drawn into the financial market where many play with speculation for the sake of profit, where there is no responsibility involved in terms of the consequence of whatever speculative behaviour produces. Where one is 'just in it for the money' while washing one's hands of any responsibility or wrong-doing when things go down.

So basically what I am seeing is that there needs to be a definitve agreement in place that there is no such thing as 'just money'. That one cannot participate or engage in any economic or financial activities whilst renouncing the responsibility that comes with such actions. Whenever money moves, it has particular outflows, it affects people's lives: which the 2008 financial crash clearly demonstrated. In the end, I'd say that liability needs to be entrenched in any and all financial and economic activities.

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