SOCIAL_INS: Re: OWNERSHIP: Exploitation by banks and investors

[Mbindnerdc@aol.com]

Actually, the mechanism for increasing employee-ownership is not 
confiscation, but sales.  Under BE, firms will have an incentive to create 
ESOPs, provided there is an economic incentive to do so.  Under what I 
advocate (using the privatization of social insurance), there will be a 
similar incentive to contribute to an ESOP rather than to the FICA fund or a 
diversified stock fund.

As to the inviolability of profit to the shareholders, I do not agree with 
Kelso, Adler and Kurland.  I believe it is possible to develop a cost model 
that correctly attributes the cost of production to labor and capital - and 
that profit can be distributed that way.  Should this happen by law?  No.  It 
should only happen by action by a vote of the shareholders - (although our 
Australian professor disagrees with this form of governance) and that such 
action will only occur when employees and their representatives control a 
large number of shares.  Dr. Trumbull would bring in a wide range of 
democratic structures to counteract boards.  I would leave the Board intact, 
but would bring democracy to the shop floor, with managers being elected by 
those they supervise after an open auction to set management salary - now 
that's democracy.  Note that a division VP would be elected by all division 
employees, not the division managers.  If firms that do this make more money, 
more firms will do this.  If they don't, the idea will die.

Mike