I the last post I used two extremely strange terms. These were "distance-from-ownership" and "meaningful-ownership." I specifically avoided using the term "employee ownership." The response to the post talked about Enron and the perils of employee ownership. This new post really is the response to a response. I made it a new post because I wanted to highlight the care I put in selecting those terms.
By distance of ownership, I am referring both the physical and social distance there is between the workers in a company and the owners. For example, a worker in a small business who has physical access to the owner of the company has a short distance from the owner than a person in a large firm. I understand that Costco is a great place to work. They have 132,000 employees. These people are extremely distant from ownership.
Another negative trend is that firms are being gobbled up by hedge funds. A firm may be small, but if the firm is owned by a hedge fund in the Cayman Islands, then the people are distant from ownership.
There are 10 million public school teachers. The schools are owned by the state. These people are essentially an infinite distance from ownership.
The term "meaningful ownership" refers to the extent to which your ownership of an equity has influence. An employee might own stock, but unless the employee is able to affect corporate decisions through the ownership of stock, then it really isn't meaningful.
Enron was a company with 22,000 employees. It had a capitalization of $64B. Owning stock did not give the workers any additional meaning in the company.
According to the Senate Hearing on Enron the employee ownership really was a scam. Enron would match 401K contributions if it was sunk in Enron stock. The employees would not be allowed to sell the stock until they were 57. Essentially, Enron was using the employees as a tool for buying company stock to artificially inflate the company's valuation.
I am not the sharpest tool in the shed. However, I would say that being prevented from selling something is a pretty good sign that you don't own it.
In the stock market, an individual investor does not have meaningful influence on the decisions of the company. Their only really power is in the ability to sell it.
The ideal of employee ownership is paradoxical as the ability to sell something is one of the most fundamental principles behind ownership.
The Leftist goal of workers ownership of production is also paradoxical (everything on the far left is a paradox). To the extent that a person works, they are a worker to the extent that they own, they are an owner.
NOTE, in my post on Change for the American Worker, I used the term "portion of production," instead of "company." I was not saying that workers should own stock in their company, but that workers should own a greater percentage of all stock.
I would love to see a more equitable distribution of ownership in our society. An equitable distribution of ownership can never happen in the convoluted thinking of the Marxist Dialectic which is driven by paradoxes like the demand that the worker owns the means of production. Leftist thinking always leads to a state where the government owns everything, and the people at large are infinitely distant from ownership, and really have no meaningful impact on ownership.