[beaconstudios]

It's a classic "great man of history" narrative, painting a Randian picture of the world being pushed forward by the overwhelming efforts of a few people. The reality is that nobody works hard enough to earn a billion dollars - that amount of money can only be made by short-changing the people who do the work.

[avalys]

Do you think founders should retain ownership of the companies they create?

Fred Smith’s wealth comes from the notional value of his ownership of a small fraction of an enormously successful and societally useful business. It’s not as if he has a bank account with billions of dollars in profits paid as salary in it, which you seem to believe.

On what basis do you think he should have been compelled to sell his stake in the company he created?

Yes, you’re correct that he didn’t earn a billion dollars. He created a company that investors value at $60B, and his remaining 6% share of it is worth $4B. That $60B was not taken from anyone. It was created - out of thin air - by organizing workers in a way that the world needed.

[beaconstudios]

> Do you think founders should retain ownership of the companies they create?

No. The idea that a company is something you "own" rather than a group of people doing some kind of economic activity is a social construct, and one designed to disenfranchise the people doing the ongoing work. A company is a collection of assets and people - to own assets makes sense, to own other people's labour in an ongoing capacity does not.

> On what basis do you think he should have been compelled to sell his stake in the company he created?

I don't think he should - I think we should change the system that allows people to be worth billions off the backs of others. I don't want redistribution, I want reform.

[AnimalMuppet]

So, FedEx owns a bunch of airplanes. Billions and billions of dollars worth of airplanes. Who bought them? The owners bought them. So you have three options:

1. The owners get some property rights ("ownership") for the money they put up to buy the airplanes and related other tools. Or,

2. When an employee is hired by FedEx, they have to come up with... something of the order of $60 billion / 100,000 employees, to pay your share of the enterprise you are becoming part of. Or,

3. We as a society don't have any capital-intensive companies. Who's going to buy the tools, if the one putting up the money doesn't get ownership? (And don't say "government". Government running private enterprise almost always winds up with too much mismanagement and graft.)

[beaconstudios]

These are valid concerns to raise, but can be addressed. In actuality, the investors (which can also be the owners but not necessarily) provide the company with capital to purchase these planes. That, or the company uses its own profits to do so. Either way, the money is the property of the company, not the owners.

In the former (investor) case the payment can be structured as a loan, and/or investors can become stakeholders as part of a multi-stakeholder cooperative, with their own cut of the earnings. In the latter case it's no issue because the company is buying things with its own resources.

[metadat]

While undeniably true, this view of reality may not be popular in this forum (unfortunately).

[adampk]

If a founder starts a company, a company that builds a very helpful product and service, hires employees and pays them creating jobs and ways for them to work on interesting problems, I am not trying to defend the other side of your point, I just honestly don't see where the "exploitation" comes into play?

[beaconstudios]

To take a minimal case for an example - if I hire two people, pay them $20,000 each to produce widgets and then sell those widgets for $100,000 a year respectively, and keep the remaining $60,000, would you consider that exploitation considering that I contribute nothing to the continued economic activity? This is the form of exploitation I was referring to.

For a contrasting example, I prefer cooperatives where the people involved in the business control it democratically (which can still include directors and managers).

[tomcam]

Do you consider it exploitation when someone voluntarily takes the $20,000 job? Is it exploitation when the person who risked the money to start the business loses it all and goes bankrupt?

How is providing the two jobs not contributing to the economy?

How do you clear $60,000 on widgets? What about the costs of supplies, insurance, compliance to government regulations, city/state/county/federal taxes, import duties,R&D, documentation, advertising, and so on?

[beaconstudios]

Exploitation isn't when somebody is forced to do something, it's when one person profits off the work of another. So in my example, the job is exploitative, yes. Having a business fail is not exploitation.

I didn't make an argument about whether it was contributing to the economy or not, but that doesn't matter - slavery contributed to the economy too, but it's also morally wrong.

It's a stripped down hypothetical on purpose, to get to the heart of the question. Non-labour material concerns are left as an exercise for the reader.

[erik_seaberg]

I am borrowing the shareholders’ big investment to amplify the value of my own work. I’m not taking any risk and I’m not paying them, instead they are paying me more than I could earn without them.

> one person profits off the work of another

Trade needs to benefit both parties.

[tomcam]

> Exploitation isn't when somebody is forced to do something, it's when one person profits off the work of another.

We live in different world. Thank you for your response.

[adampk]

Again, I am not trying to to defend the counter but am I missing something or is there quit a large logical gap in your hypothetical?

I assume if I am doing the hiring, then I will also be responsible for the additional hiring/firing, selecting the right talent, choosing the right way to compete against existing product/services? Is that not continued activity as I grow my start-up into a category-defining enterprise? How to allocate that profit, into R&D, more people, sales, etc, aka growing a company?

Then after doing that for 10 years that company is now worth billions of dollars and I own it. I don't see where in this chain I have done the exploiting?

[beaconstudios]

So what you're describing is the work of a director - work that should be paid but that I intentionally excluded from my example because a lot of people just think by default that directors should "own" the company because that's the status quo.

I still think that directors should be well compensated commensurate with their capability and role. I just think that they shouldn't be able to exclusively control and take the profits generated by the work of everybody involved. Corporations are autocratic or oligarchic in that way - this leads to the select few that society seems worthy of profit control having more power in our society. This is because the owners can keep workers' wages as low as the market will sustain while inflating their own total compensation to absurd proportions, as we've seen. With a cooperative structure everybody involved has a stake in controlling the company, so executives have to take everybody's needs including the workers, into account, instead of just looking out for themselves and investors.

As for where the exploitation comes in - it probably comes down to different perspectives on the word. To me, it's exploitation if one person is profiting off the labour of another. Of course in a company the shareholders are often also working, but if a company grows to a billion dollars from a million its not because the directors are working 100x harder.

[adampk]

In this hypothetical I thought we were talking about a founder-operator. It seems like your point does not work in this case?

[metadat]

At it's core, capitalism is about maximally exploiting labor.

Some companies treat their employees better (Costco) or worse (Walmart), but at the end of the day it's all a byproduct of the structure and behaviors rewarded in capitalism.

The "winners" exploit the hardest, otherwise potential profits are being left on the table and it opens an opportunity for another company (who is willing to go the extra mile to exploit harder) to enter and offer lower prices. Subsequently, the working middle class and poor people (the largest segments of USA population) have their own harsh realities to deal with, and don't have the luxury of choosing more humane yet expensive alternatives when they are purchasing goods and services.

[e40]

And who here thinks the way Amazon warehouse employees are treated is a good thing? Drivers, too. Peeing in bottles. 14 hr shifts. Buffer companies between Amazon and the customer, so they can easily skirt labor laws, etc.

[parasubvert]

This falsely assumes that labor is the source of all value. It's not.

[metadat]

I'm open to being wrong, but can you elaborate on what sorts of real value can be created through means other than labor? In my experience, not much happens in life unless someone puts in the elbow grease.

[mindvirus]

Obviously poverty is a major issue, and as a society we can and should be doing a lot more to address structural inequality. However, is there a time or place in history when/where would be better to be poor than today in a modern day first-world capitalist country? To be clear, I'm not arguing that we're anywhere near an ideal or perfect state for this, but what are the alternatives that you see?

[beaconstudios]

I know this place skews libertarian/neoliberal, but I try to inject a little spice where I can ;)

[tomcam]

How much money can a person make before they start shortchanging others?

[beaconstudios]

Infinity, if they're not exploiting people, by definition. If WhatsApp was a coop and still sold to Facebook for billions, they wouldn't be exploited.

[tomcam]

Is a co-op as a whole allowed to make a profit? I’m confused. In a previous response you said making a profit is exploitation

[beaconstudios]

Depends on who you ask - I'm fine with it and haven't said otherwise. What is a problem is when one person profits off the work of another (as in, pays them less than their fair share), which is basically all salaried employment.

[tomcam]

If the co-op is sold at a profit, and those profits are distributed to the workers (who obviously all put in the exact same amount of work and time, right?) then they are profiting off the work of others, aren't they?

[beaconstudios]

For starters, not everybody in a coop has to earn the same amount or get the same payouut from a sale. They just all need voting rights. The point of cooperatives is to be owned by all their members, not just the founders.

Second, yes the profit in the marketplace is still exploitative to a degree, but we don't have a viable alternative so there's not much to do about that. I don't believe there's much point critiquing something when there's no alternative.