SOCIAL_INS: Re: OWNERSHIP: FICA funds to ESOPs ???

[Mbindnerdc@aol.com]

Norm,

What I advocate is a radical change in power by providing workers the resources 
to purchase and gain control of their companies and to put their elected 
representatives in control of the operation, eventually buying out outside 
share holders.  That, to me, is a radical change in power. In the interim, a 
portion of those resources will go to diversified funds rather than ESOPs, 
although as ESOPs gain more and more money, there will be less and less 
diversification.

Both of our plans provide for employee ownership.  Yours would do so through 
self-liquidating capital credit.  Mine would do so through a progressive 
redistribution of the employer contribution to social security (it is 
progressive because the cap would come off and every worker would get the same 
investment benefit, regardless of income).

On equity grounds, on a purely marxian standard, I actually prefer my system.  
Under capitalism, all factors of production are purchased at the lowest 
possible price and the difference between the cost of the factors and the price 
is the profit - which is either reinvested or distributed to the owners of the 
firm.  The essential problem with capital is that the owners of the firm 
receive the surplus which is generated by the worker (whether that worker 
actually produces the good, designs it, accounts for it, or even manages the 
process).  Additionally, social conditions are such that the cheapest workers 
possible are purchased and these workers, given unequal access to training and 
development resources, are forced to work as slaves in a job that may not be a 
match for their talents.  Both of these conditions are exploitive.

From my understanding, by distributing ownership to each citizen, both an 
alternative income is generated (so that individuals can pursue the lives that 
they want) and the worker receives some share of the profits as an owner of the 
firm.  As I understand your proposals, a worker can invest both his or her 
funds and those of his children in the firm at which he works, a diversified 
account, or a range of other investment opportunities.

From my way of seeing it, this puts the worker in the position of owning the 
product of his own labor, but may also put him (and his children) of owning, 
and he in controlling, the labor of other workers (particularly if he has a 
large family and a wife who does not work).  In effect, even if worker A and 
worker B have the same age and seniority, if worker A is single while worker B 
has a non-working wife and 5 kids, then worker B has seven times the amount of 
control over the firm where they both work (assuming that workers A and B were 
hired after worker B had all of his kids).  Worker A would, in effect, be 
worker B's wage slave, since worker B is receiving more of a return on his 
labor than worker A.  

To me, simply providing for capital credit does not bring about justice.  
Accounts do not all balance out at the end. If alienation of workers from the 
product of their work, or wage slavery, is unjust (and it is), then nothing but 
the eventual ownership of the firm by only its workers must be the ultimate 
goal - as well as the equal periodic distribution of additional ownership 
shares.  This is what I propose.

Now, this arrangement is only a means to an end.  Eventually, when all the 
workers have control, they would ALTER HOW PROFIT AND WAGES ARE DISTRIBUTED so 
that each worker would receive an equal base wage, an additional payout to 
support the members of his or her family, a mortgage on a home capable of 
producing the food required to feed his or her family,  an equal number of 
shares periodically (say one share per month), funding for education to his 
full potential, a share of the profits of the firm from his share ownership 
(which would be reinvested) and a share of the profits of the firm consistent 
with his base wage and the extent that labor contributed to the profitability 
of the firm, and any incentives he has earned for increasing the profitability 
of the firm through invention, commission on sales or individual or group 
productivity.  These incentive payments would come as a combined stock grant 
(if the action resulted in long term profitability, such as a patent or a 10 
year sales agreement) and cash.  Under the arrangement I describe, no one is 
alienated from what they produce, no one is exploited, and everyone is provided 
for.

Under my system, older workers will have more control over the firm, since they 
have more shares as well as the benefits of dividend distribution of those 
shares, but that is just because they built the company.  Even having them 
continue to hold and vote these shares would be just, although upon their 
deaths their heirs should by divested and the remaining shares be transferred 
to an annuity for the surviving spouse.

I wouldn't give the kids anything but the right to be members of a system which 
will provide for their own training and self-sufficiency - a far greater 
inheritance than simple money. 

I will close on that note,

Mike
In a message dated Fri, 20 Sep 2002 12:46:41 AM Eastern Standard Time, "Norman 
G. Kurland" <thirdway@cesj.org> writes:

>Mike,
>
>Let's think in term of power.  As I see it your approach to broadened 
>ownership is from the top-down, designed by an elite for the people.  CESJ's 
>approach is to put the power of money creation and productive credit (and 
>therefore the choice over the use of productive credit) in the hands of 
>individuals.  The overall Capital Homesteading system would force corporate 
>executives to have to come to the people for financing their operations
>and growth and full-dividend payout stock would force executives to be more 
>accountable for their decisions and over such matters as executive 
>compensation, independent audits, governance, transparency over the books, etc.
>
>Norm
>
>Mbindnerdc@aol.com wrote:
>
>> Norm,
>>
>> I would agree regarding ESOPs as they are currently structured, with share 
>grants as a percentage of income giving higher wage employees greater control 
>(and sending the single to lower wage employees that the game is rigged), 
> with boards of directors containing company officers rather than representing 
>a broad base of employee factions (labor, professionals, management), and with 
>the ESOP holding a minority share.
>>
>> I am talking about something different.  I am talking about equal ownership 
>for equal longevity (regardless of wage), factional board representation and 
>eventual majority stock ownership by the ESOP.  If Enron, Global Crossing, 
>etc. had these features the executives would have not been over-compensated 
>and in the extreme price the stock price would not have been a matter of 
>speculation, since ideally the firm would be wholly private.
>>
>> Mike
>>
>> In a message dated Thu, 19 Sep 2002 2:29:42 PM Eastern Standard Time, 
>"Norman G. Kurland" <thirdway@cesj.org> writes:
>>
>> >Mike,
>> >I totally agree with Ron Ludwid, who before he retired was, in my opinion, 
>the guru among ESOP lawyers nationally.
>> >
>> >Norm Kurland
>> >
>
>
>