I’ve always been impressed by how quick adaptive corporations can be.
I’ve always been impressed by how powerful and strong the government can be.
So I was wondering if there was a way to come up with some kind of organization that had the best of both organizations.
I was thinking of a corporation where any legal adult could buy one, and ONLY one, share in the company. If enough people bought their one share, it will be a kind of pocket democracy. But I can’t think of any way of enforcing the one-person, one-share limit.
In Britain we have the building societies, which are customer-owned financial institutions; we have the John Lewis Partnership, which runs the John Lewis department store chain and the Waitrose supermarket chain, which is owned by the workers; and, there’s the Co-operative, which runs a supermarket chain and a bank and a travel agent and the nation’s largest funeral parlour.
See also Mondragon in Spain. AFAIK, like the Co-op and John Lewis/Waitrose in the UK, these all operate forms of representative democratic participation in management rather than the direct democracy implied by “one person, one share”. Plus, there is an argument that, if it’s a commercial enterprise, power should rest with those who have invested most and therefore have most at risk: but that then it becomes an argument about the rules on company financing, limited liability and all the rest of it.
“One person, one share” would be more appropriate for a limited group of small numbers with a single specific objective: say, a resident-owned freehold property company, like the one where I live. And then, there’s the risk of “oligarchic capture” where eveything ends up managed by a self-appointing group (who may or not be capable/benevolent, or just obsessive busybodies, like the horror stories I read about HOAs in the US), because no-one else can be bothered to get involved in the detail.
We had a membership register. There was no law forcing us to sell multiple memberships to a single voter, and no law requiring us to recognize transfer of membership.
The short answer is “no”, because corporations and government serve two very different functions and operate in very different ways.
Corporations are adaptive because their nature allows them to change what they do and who they serve (their customers) to whatever extent they like, so long as they obey the law and generate more revenue than expenses.
Governments are powerful, but less adaptive, because the have to serve all their constituents. They are also function to make and enforce laws and provide services, not turn a profit.
Yes, the OP is describing a Co-op (or a credit union, for financial matters).
In my province, Co-ops are corporations (that is, they have corporate status, can own property in their own name, run businesses, and so on), but a member has one and only one share. Can’t have more than one, and shares can’t be traded or bought, unlike corporate shares on a stock market.
Not a one share limit, but Green Bays Packers Inc. doesn’t allow anyone to own more than 200,000 shares of the company (which represents a little under five percent of the total shares).
This is a broad generalization. Mostly true, but not necessarily so. Governments don’t have to be democratic or constituent-serving; heck, ours barely provide enough services just to keep the populace from revolting, while enriching our elites at our expense. And the average American has no real influence in federal politics anyhow. There’s no magical rule that says a government has to be democratic/fair/effective/not-for-profit/powerful, and indeed many aren’t.
Meanwhile, corporations of different charters and/or missions can be democratic to some degree, such as B corps (both the legal entity and/or the third-party certificate), cooperatives, and non-profit corporations (which are still “corporations” under the law). Depending on locality, they have different legal obligations to the state or public, but within those restraints they can – though are not obligated to – provide for workplace democracy to some degree. Most non-profits are run with traditional corporate hierarchies, but there are some that voluntarily govern as worker self-directed non-profits. Some member-owned cooperatives (think food co-op or the outdoor store REI) will allow 1-person-1-vote of their member-owners, regardless of how much of the enterprise they own (i.e. a person can buy multiple shares, and different classes of shares, but in theory that only affects their financial returns and not their democratic power). Anyway, the specifics will vary between localities and from org to org.
As a rule, I think it’s generally safe to say that no corporate charter (at least in the USA) requires workplace democracy – hence the need for unions – but I don’t think they forbid it either, beyond needing some designated individuals to serve in required legal/financial roles, and a board structure depending on their charter. But those boards and individuals are free to share power with others, or perhaps may be obligated to if their bylaws are written as such (not sure about that).
This isn’t so much a government vs corporations thing, but a standard feature of capitalism, at least as it exists as a response to inherited nobility, as in France or young America. These systems were intended to protect property and person both, through varying balances of power. They were designed from the get-go not to elevate human rights at all costs, but to balance them against the need to protect private property as well, usually with the balance favoring capital over people.
Ironically, many small to mid-sized corporations are arguably already more democratic than government (at least ours), responding quickly to negative publicity, boycotts, etc. When was the last time the US government gave a damn about your protest, or allowed you to withhold your capital from taxation because you disagreed with its policies? You may be able to vote, but the average American has far less influence over government than over all but the biggest corporations.
I am no libertarian; the basic principle of “one person one vote” only really seems to work in small, homogenous, egalitarian communities (communes, small nonprofits, housing and food-coops), and begins to break down even at the level of Occupy, much less any sizable government or corporation. Past that, economies of scale – political and logistical efficiencies – favor hierarchical organizations, and then the question isn’t any longer “how do you balance individual constituents against each other” but how you balance power between provinces, nations, transnationals, and individual wealth: all of which can be a boon or detriment to their societies. I’ve found power mapping to be a really interesting tool; different entities have different amounts of capital, marketing prowess, public support, military support, religious support, etc. Power is never really about just votes or money or any one thing, but all of those things in interplay, and the same is true even if you have a perfectly idealistic hippie democratic co-op, with high risks of the most charismatic taking it over and turning it into a sex cult with ballots. We’re just primates, after all.
I am a member of an electric co-op. Many of these “rural” co-ops were set up in the 30s to provide power to areas not served by the big power companies. As our area is now quite developed, to call it a rural co-op is a misnomer. It has 100k+ members-customers. All have one vote.
It is also a non-profit so its rates are great. But it is small by power company standards so we get more glitches than people not too far from us that are on The Huge Company’s grid.
I have family that belong to a farmer’s co-op. It serves quite a large area, helping to finance and provide supplies to a lot of farms. A lot of money goes thru them each year. (They also run a gas station and cafe. Truly full service.) At least two of my family have served on the board. I have a couple co-op hats when I want to look rustic.
This also goes back to the 30s at least.
You can run a long term, stable business using this model. But the members have to be fairly stable and set in place. If a house is sold, the new owner replaces the old owner as a member in the electric co-op if they want power. Ditto if a farm is sold wrt the farmer’s co-op but there the membership is more optional. (Some farmers have become contractors to big agri-businesses who handle all the financing and supplies.)
Beyond that, what makes corporations so responsive and to a great extent, makes governments less so, is the profit motive. Companies have obligations to their shareholders to make money- so they try and optimize their functions to achieve that. Meanwhile, governments are not in it to make money- they’re in it to provide services, whether or not there’s a profit in it or not.
Ownership doesn’t really have much to do with it- companies aren’t more/less responsive based on who owns it or how much, and governments are powerful by virtue of political legitimacy and the legitimate monopoly of force- i.e. the government CAN compel individuals and corporations to do stuff, by virtue of having a legal system, and in the ultimate end, soldiers and cops to go jail people, crack skulls and shoot people who don’t comply.
In the United States, most outdoor enthusiasts are familiar with Recreational Equipment, Inc. (or as it is colloquially referred to, “REI”) which has been a consumers’ co-operative since inception. If you purchased a $20 REI membership, you effectively own one share in the co-op, giving you not only your annual dividend (10% of your previous years’ purchases) but also rights to vote on board members. In the outdoor retailer industry, REI is quite successful (although their pivot toward more enthusiast-oriented gear and apparel has kind of alienated hardcore climbers and expeditioneers) and is consistently ranked in Forbes “Top 100 Companies to Work for in the United States”, so clearly the model is working.
I’m a member of a consumer grocery co-op, and of an agricultural co-operative farmers’ market; and I’ve been a member of an agricultural sales co-op. One membership, one vote, in all cases. There are ways for members to invest additional funds, but the additional investment, while it may bring additional financial returns, doesn’t get the investor additional votes.
These things are actually pretty common in the USA. They come in all sorts of sizes.
My sincere thanks for your enthusiastic and quite detailed replies. It seems like corporate ‘democracy’ is a little easier in theory than fact. If I may, could equal shares of stock be ‘preoffered’ to every citizen? They are considered to be abstaining from voting until they actually logged in and did so.
I would disagree with that. Co-operative commercial enterprises are generally quite successful, in no small part because there is no incentive to make a quick, amplified return for large shareholders at the expense of future profitability, e.g. pump & dump schemes or cutting employee benefits or the employees themselves to temporarily increase net profit at the expense of future viability (thank you Al Dunlop, you fucking corporate sociopath). It is a great way to develop capital without being dependent upon venture capital or the vagaries of exchange market speculation because everyone who holds a share has a long term vested interest in the success of the enterprise. It isn’t a model for capital-intensive industries with a widely distributed benefit like defense spending, because you’d need millions of people to invest thousands of dollars into something like Boeing to receive an indirect benefit, but for enterprises like grocery co-ops, utility co-ops, and so forth it is actually a really good working model in which the shareholders have a vested interest in seeing that expenses are kept low while producing quality goods or services.
