Capitalism: A Love Story - discuss it

[Josh]

Originally Posted by Numberz

First of all, its pretty obvious you guys are American. Socialism is nothing to be afraid of. I could take this argument into the healthcare debate and how far behind the States is in terms of social progress with their lack of universal health care, but that is besides the point.

Unfair. Stop labeling us. This has nothing to do with the debate and is, utterly incorrect as well. Tay for instance, is Scottish.

I for one am American and am not afraid of Socialism. I actually think it's a really good idea, in moderation. What you're talking about is above and beyond socialism though to flat out communism.

Business management needs to be learned, yes...but I'm not proposing that the democracy handles all of the management.

Ok, but that is what Michael Moore is proposing.

So what parts would you propose "democracy" handles?

What I am proposing is that there is still a boss, there is still someone in charge of accouting and finance and whatnot...but that these people do their jobs in the same way that someone on the assembly line does. They get paid the same and have the same benefits.

Here's how you get to be the boss, there are several ways, but these two methods are in my opinion where GOOD bosses come from:

1. You go to school for a long time, and spend a lot of money, time, and effort to get extra education.
2. You work extremely hard at your job to work your way up through the ranks. Often this means long hours, neglecting your personal life, and making a lot of sacrifices.

Those two methods are where GOOD bosses come from.

Now I ask you... say I'm someone who could be a really good boss. Why should I make the effort to do either one of those things if I will be paid exactly the same as the slacker idiot who walked in off the street and got stuck doing whatever on the assembly line? None. So I won't do that. I won't go through the effort necessary to become the boss.... and so you won't get anyone who is qualified to become the boss. Where will you get new bosses from since no one wants to go through all of that work?

The democracy kicks in for the big picture. For example, set aside a certain percentage of your profit for wages. This stays the same regardless of how many employees you have.

That's reasonable and fair, but it has nothing to do with democracy. It's just treating your employees properly. If you have a good way to get more companies to do this, I'm all ears.

Secondly, everyone gets a say in hiring new employees. Sometimes more work comes in and everyone has to work harder, but gets paid more. Everyone could decide to get paid a little less in order to hire another employee and make everyone's jobs a little easier. The employees would learn and understand expansion, and that accepting pay cuts in the short run may produce long term expansion and therefore increased wages.

Decent idea, but it's a very limited form of decision making and really this is a role unions can and have filled in the past already.

Should they be making decisions on how to set up amortization on a new machine they purchased? No, that wouldn't be their job, that's why you hire an accountant (or outsource).

Exactly, but where will you get an accountant? If you're paying the accountant the same amount as the janitor, then no one will go through the effort necessary to become an accountant and there will be none to hire.

But this is done in the same way that upper management sometimes isn't qualified to make factory floor decisions.

That's right. That's why if you're a good upper manager you hire a factory foreman, perfeably from the ranks to make those decisions. You pick this person based on who is the most knowledgable about how things work. Just because a guy works on the assembly line doesn't mean he always knows what's best for the factory floor as a whole. Stupid people make stupid decisions. This is LESS of an issue in government since you have a larger pool of people voting and in theory things even out to minimize the influence of the stupid (though I submit that this hasn't really worked either... just look at the assholes we've elected).

There is still a separation of labour, even in decision making, but the overall direction that the company heads in is controlled by everyone equally. Once the direction is chosen, the management decides the best way the execute. It would also be assumed that people would listen to some of the opinions of the more educated management.

Again, I don't see how the employees overall are qualified to make these kinds of big decisions. Maybe some small decisions, like your example about whether to hire more employees but most don't understand the things they need to understand in order to make those decisions.

Too... think for a minute of the guy who owns the company. Let's assume it's a sole proprietership... a cleaning company which a guy started in his basement and now has 100 employees. He spent years working nights, weekends, and making all kinds of sacrifices to build his company. And now he's just supposed to turn it over to the minimum wage janitor to run it into the ground? Even with some sort of profit sharing he has FAR MORE of his life invested in this company than the janitor he hired last Tuesday. It's utterly unfair to him.

As for the motivation with schooling when you can get paid the same...ya, that's a bit of an issue, but is it not still a problem today in our society. With unions, I could have finished high school, gotten a job on an assembly line with great benefits and $70 and hour...but you know what? Assembly line jobs suck. I'd much rather work in an office with a job that doesn't require heavy breathing. I'm also of the opinion that post-secondary education needs to be subsidized a lot more by the government, perhaps to level where it is provided in the same way that health care is (at least like the health care we have in Canada here). Education is the most important thing to the future of a nation. I love learning, and so do lots of people. The motivation is not always money, a lot of people just want to work in the field they love, and in order to do that you need training. I don't know a lot of people that want to spend 40 years on a factory floor. I think society is troubled when our biggest motivation is money.[/QUOTE]

[Numberz]

The assumption would be that this is not a sole proprietership, and that this is an idea where everyone owns the company. I'll admit that start-up is one of the areas that stumps me the most in this idea.

You're also overestimating the effect of education when it comes to big picture decision making. I'm have done repeated studies on what makes a successful entrepreneur, and education always comes up as having little to no correlation to success. Surprising, yes, but that's the way it is in every culture I've looked at. You don't need to spend hours with your face in a textbook to be a good businessman. The hard hours that are put in, that usually comes with start-up....and that's also because that individual thinks he will receive all the benefit of the companies success, but mainly because the risk for the venture is on his/her shoulder. A shared ownership would mean more initial capital and more people working harder.

...and unions are complete garbage. They were successful early in the 20th century in getting better wages and working conditions, but now it is just another organized group, fighting for their own interests, filled with corruption, and creating inefficiencies.

You make some good points, I just happen to either disagree of look at it from a different perspective. The idea is to help change society, and that people would learn and act differently if they were involved in the business in a different way. You really do have to educate your employees in this system. Maybe not formally, but in the way that you have to force them to get involved and take an interest in the business, and to understand different factors in decision making. It's a grey-area of what the 'democracy' handles and what management handles alone, perhaps that is something each company/franchise decides for themselves.

I have a class next year dedicated to me building a business. I might continue to think about this system and then run with it. I have to figure out all the financing and delegation, so I'll have to do it properly. If I'm still posting on these boards, maybe I'll present my ideas. Til then, ya it's still a rough idea and not perfected.

[crappertay]

Originally Posted by Numberz

First of all, its pretty obvious you guys are American.

Um... Wrong before you're even out the gate. Josh covered the rest.

Except in about 5 posts you still haven't answered the fundamental question of why someone would want to work their ass off for anything to be payed the same as the burger flipper.

**** it, I'll be the burger flipper and get my kicks from my hobbies in all the spare time I have because I have no real responsibility but am getting paid the same as the guy who carries the can.

And I speak as... the boss of a unit.

[Numberz]

Well, maybe it doesn't work so well with burger joints....but then again, managers of burger joints don't usually have a lot of post-secondary training and training (at least in my experience)..it probably also doesn't work well with any company that has part-time employees....and in the end, outsourcing is a big loophole of it.

Presumably this works best with factories and small businesses....but your question is still valid, why be the boss when you can be the lower level guy. Less responsibility, less stress.

I did attempt to answer this question. A lot of people are driven internally to succeed and while being a part-time burger flipper may provide a lot of free time, a lot of low level factory jobs aren't as good for that. I think of machinists and welders when I think of this because that's where my work experience has been the last few years. Those guys work a lot of hours, at a mind-numbing job. I don't know how they go through life with that job. Money is an incentive, but I am hoping for a society that cares about more than just money. Instead of getting paid more, how about getting a job that has more diversity and is more rewarding. If you love working with nature and science, you are going to work hard to get a degree so that you can work in that field. Same with if you want to be an artist. There are a lot of people who want to be artists, but artists don't get paid a lot, a lot of them are poor. Say I like managing other people and being in charge, presumably I'll get the training required or climb the corporate ladder.

When all we do is work for money, we becomes slaves to the economy. All we do is work, work, work...sometimes, we have to take a step back and learn how to enjoy life. When we care so much about money, it's harder to do that.

You say you'd just take a low level job, take your paychecks and get some hobbies. I'm sure there are a lot of people who would agree with you...and guess what, there would be a lot of lower level jobs available for you and those people to do that. However, that's not everyone. I could never go through life like that. I'm not studying business management because I want to be a CEO of a big company. I just want to own my own business and be good at what I do....earn a comfortable pay check and go about my life, and yet have my work be a big part of my life that I enjoy doing, almost like a hobby.

Also, I can't remember if I've said this yet, but in a franchise where the decision making is delegated, then there should be a little less stress on the upper level management. One of the more stressful times for managers is during start-up, because they have to do a lot by themselves since they wouldn't have the funding to hire enough people to delegate all the work to....with this system, more people buy in initially and therefore that funding will be higher, there will be more people to do that work, and it would be less stressful...but as I said, the start up of this idea is pretty fuzzy and I can't even start to know all the details.

All said and done, I don't want to get off to a bad start here on this board. I apologize if I offended anyone with the 'American' quote, or made myself look like an idiot....it's a hot topic for me.

[Volante]

Well, maybe it doesn't work so well with burger joints....but then again, managers of burger joints don't usually have a lot of post-secondary training and training

You've never worked at In-N-Out that I see. There, the managers ARE managers, and good ones too (well, odds are you'll get a good one. There are bad eggs.)

Plus, they work their ass off and make serious bank.

[crappertay]

"at least in my experience" is too subjective to proof anything

[Numberz]

I don't think it's a huge part of the argument anyway. Let's just rack this one up as me liking the idea and thinking that it could be implemented well in the right conditions. You guys seem to disagree....that's fine.

[Volante]

I don't think it's a huge part of the argument anyway. Let's just rack this one up as me liking the idea and thinking that it could be implemented well in the right conditions.

And therein lies the rub. The theory is sound, but the theory also fails to take into consideration human nature. I mean, communism is great, in theory. BUT that's only where it works.

There was an Ask Slashdot question a long time ago (and I can't find the link) about an entrepreneur starting up a new business with his friend and they wanted to split the ownership 50/50.

The fact of the matter is, with a split, it WILL result in a deadlock. No ifs, ands or buts. There were two suggestions that seemed to have equal support: 1) One of the two has to have 51% control. 2) Hire a third party for managerial decisions (I believe the poster said neither of the two had boss experience).

But the general jist was: at some point the buck has to stop on one person: tie votes need to be broken and responsibility has to be taken.

Plus you have to consider logistics. Can you imagine a company the size of IBM or Boeing or Wal-Mart going to a democracy? How do we account for branches? Does a Wal-Mart in California have a say if someone can get hired in Florida?

It's easy to make sweeping generalizations, but when you get down to it, the devil is in the details. If it helps, don't think of us as disliking your proposal, think of it as conditions to help you improve your position.

[Numberz]

Okay,

BTW, for your WalMart example....the general idea would be that this wouldn't work for really large companies. However, that doesn't rule out nationwide or international businesses. The way it would be is that the franchise units would all be under the same brand, have access to the technology and intellectual capital from HQ, and generally be conducting the same business. However, the individual franchises would be otherwise run by the employees at that franchise, with freedom to branch out and be independent. Franchisees have a fair amount of independence to begin with, this just takes it a step forward.

Even then, the idea would still be hard to implement for any company over 50 employees at that one location.

[Volante]

So how do we migrate the democratic sub-50 employee small business to a tiered management style medium business? Won't the employees be upset at their now lack of authority?

[Numberz]

That's a good point. I assume the idea would be that one franchise (lets call it a factory in this case, but it could any kind of business) has the market for a certain area. The factory produces to the level of demand, and they expand their operations as demand increases. Now, lets say demand increases to the point you're referring to, where it becomes too much for just a factory. So, in some regular businesses, this would mean they continue on the path of expansion. A bigger factory, perhaps a separate building for management, etc....to the point where if it remains a democracy, it becomes inefficient with bureaucracy, hard to guage everyone's opinion, or perhaps a lot of workers become sheep.

Well, how about we avoid this problem by adding a new franchise to the market. The same way that a new McDonalds might pop up in a growing residential area. The original factory can cut back to a comfortable level of production, and go about their business. This is really nothing new here, this is just the basics of running franchises. You don't see McDonalds getting bigger and bigger, they stay at a target size. That is their optimal size for efficiency and customer service.

Of course, as I've been mentioning all along, this only works for certain industries. It would certainly be inefficient to build 20 small car factories across a country, when you really only need one big one. It would seem that this system would work for businesses that work with the local economy. Say, a clothing store, a small machine shop, a restaurant, etc.

[Josh]

Originally Posted by Numberz

You're also overestimating the effect of education when it comes to big picture decision making. I'm have done repeated studies on what makes a successful entrepreneur, and education always comes up as having little to no correlation to success. Surprising, yes, but that's the way it is in every culture I've looked at. You don't need to spend hours with your face in a textbook to be a good businessman. The hard hours that are put in, that usually comes with start-up....and that's also because that individual thinks he will receive all the benefit of the companies success, but mainly because the risk for the venture is on his/her shoulder. A shared ownership would mean more initial capital and more people working harder.

I'm not overestimating it, I only listed it as one of the ways. Any way you slice it, becoming a success requires a TON of very hard work. Why put in that work if you get nothing out of it? You still haven't answered that quesiton. And it's not just about the boss. Why should I go through the trouble to become an accountant for instance, when I can achieve the same level of success by simply showing up on a dock and loading boxes? You still haven't answered that question.

You make some good points, I just happen to either disagree of look at it from a different perspective. The idea is to help change society, and that people would learn and act differently if they were involved in the business in a different way.

But history has proven that they don't. USSR anyone?

I'd really like to hear you address the motivation issue. What will motivate me to put in all the extra effort to become an accountant, or a computer programmer, or a network administrator when I will reap the same rewards as someone who puts in no effort at all?

Money is an incentive, but I am hoping for a society that cares about more than just money. Instead of getting paid more, how about getting a job that has more diversity and is more rewarding. If you love working with nature and science, you are going to work hard to get a degree so that you can work in that field. Same with if you want to be an artist.

You realize that not every highly skilled job is rewarding right? If it's all about finding something you love and that you find rewarding, you'll have a billion, horrible, useless artists. Everybody would love to sit around and paint, but as a society we don't need a billion painters.

But we DO need truck drivers. It's a boring, tedious job and it requires a little extra training and requires being away from your family for a long time but those guys do it because it's a good way to earn a solid living. Or there are even a lot of highly skilled jobs which are a boring pain in the ass but people do them because it's way to make money. I was an engineer. Designed microchips. Highly skilled job. Most of the low level engineers hate it and are board to death, but they do it because it pays well... and we NEED those guys. Take away the pay and no one does that job. It's not rewarding. But we need it. How rewarding is PLUMBING really? But it's a skilled job which we NEED and so it pays well.

Or not just highly skilled... what about high-risk?

For example... crab fisherman. Have you watched Dangerous Catch? Who wants to be a crab fisherman when it's extremely dangerous, you might die... but in your world you'll earn the same as the guy who unloads your ship after you return to the dock from risking your life? It's not "rewarding". Those guys do it because they can make a TON of money, so the reward = risk. You're talking about removing the reward entirely and asking them to still take the risk. Not going to happen, nor should it.

[Numberz]

I suppose the list of businesses that would work with the 'democratic' system is a lot smaller than I originally thought.

At this point, I don't have a good enough answer for you....but that doesn't mean that there isn't a good enough answer out there somewhere.

[Josh]

Originally Posted by Numberz

At this point, I don't have a good enough answer for you....but that doesn't mean that there isn't a good enough answer out there somewhere.

Maybe it does though. People have tried to make this system work for decades, and it never has. They just called it communism. Michael Moore is simply trying to repackage the same, tired, ideas.

I'm not saying I love capitalism, frankly I think it's a pretty shitty system. But it works better than this.

What capitalism needs is more strict regulation, not replacement by communism.

[Numberz]

Well, America does not have true capitalism, nobody does. A perfect capitalist system would be cold-hearted and full of ups and downs.

You also seem really tied to this word...'communism'. I'm not a big fan of communism. It's one method of implementing socialism, and in my opinion, it's not a very good method. I don't think communism achieves a true social progress. It is also very susceptible to corruption. America's current system, is very similar in this way. Corruption runs rampant. In theory, both capitalism and communism should work very well, but corruption ruins everything.

Personally, I think capitalism's biggest strength is also its biggest weakness....competition. Products and services keep getting better because each company wants to better than the rest, but at the same time, a lot of effort is put into being better that is ties everything down with marketing and false differentiation. It would be nice to have a system where everything is organized, and industries improve their products and services in order to serve society. Unfortunately, because the way our society has developed, that's a pipe dream.

See, that's why I want to implement a system like this democratic business. Our society is in trouble. We are built on consumption, motivated by self-interest, and are severly lacking in solid foundations for sustainability. Our society is very prone to collapse at the moment. Nothing exemplifies this more than our financial system and our economy. We have to change society, and it is going to mean pangs for our current way of life.

[Josh]

What you keep calling "democratic business" is communism. That's why I'm using the word. You're just relabeling it.

[Numberz]

Socialism and communism are just extreme forms of democracy. That's something Michael Moore kept hinting at in the movie but never said, but it's true.

It is funny when you think of it. The communist governments that arose in Russia and elsewhere were not very congruent with what communism was supposed to be about. The business sector and some public policies were, but not the set-up of government and politics. Western democratic governments are probably closer to what Communism is, except their business and public policy would suggest otherwise. America and the west praise capitalism, but their systems are becoming more and more regulated as history goes on (America is behind, but they're catching up).

I find that the bigger and more powerful a country is, the more corruption they have and less congruency they have between espouced and enacted values.

That's why I don't like when people use the word communism...it has a lot of connotations with it that are incorrect. Marx himself said he wasn't a Marxist, and disagreed with the system he helped build.

[doppiomalto]

Umph... This is not enough Michael! We want answers to the problems... solutions... not only critics

[Numberz]

Michael Moore doesn't offer solutions....never really has, just points out problems.

[doppiomalto]

Oh true.... he really don't have to... but it would be great trying to find people who is finding solutions to our problems

[Valkary]

The solution is not to have 100% capitalism or 100% communism. What we need to be open to though, is finding a middle ground where the employees atre stakeholders and decision makers, but management is responsible for efficiency while still being held accountable by the employees.

What works well is when the employees vote on who the manager is and THAT guy is repsonsible for the day to day decision making.

Basically make the employees shareholders. It's called Employee owned business.

This means the shareholders (employees) decide who the CEO is, who the Board is etc.

It also will tend to level out the pay disparity of CEO's making 1000x the standard employee salaries.

I think you need a graduated system, but with more feedback loops. Moore may be taking it too far, but the overall point is, our current system is designed to crush labor and reward excess.