The biggest problem in my opinion is, when companies stop to be companies and instead turn into glorified money trees whose only purpose is to shake all value from, value generated by the people who have to work there.
Once a company sells its soul to investors, it becomes nothing more than a human in the Matrix: a thing to harvest, to be kept alive until nothing of value remains, then thrown aside and disposed.
Source: I speak from experience, worked at one investor-driven enterprise and one that is listed on exchanges
It’s why I think worker-owned coops should be more common. Research shows that they’re a more resilient business model than hierarchical businesses. I think it’s because they can largely avoid the principle-agent problem, wherein executives and investors act on behalf of the company, but their personal incentives do not necessarily align with the company’s. For example, a CEO has a vested interest in pumping up profitability in the short term, even if it’s by slashing R&D funding and alienating customers long-term, so they can get nice numbers to pad their resumé. Likewise, investors just want their investment back.
With a coop, overall control of the company’s decisions is guided more by the long-term health of the company, as that’s what is best for the workers. It aligns incentives, avoiding the perverse incentives that cause hierarchical businesses to make unsustainable, short-term business decisions.
The biggest problem in my opinion is, when companies stop to be companies and instead turn into glorified money trees whose only purpose is to shake all value from, value generated by the people who have to work there.
Once a company sells its soul to investors, it becomes nothing more than a human in the Matrix: a thing to harvest, to be kept alive until nothing of value remains, then thrown aside and disposed.
Source: I speak from experience, worked at one investor-driven enterprise and one that is listed on exchanges
It’s why I think worker-owned coops should be more common. Research shows that they’re a more resilient business model than hierarchical businesses. I think it’s because they can largely avoid the principle-agent problem, wherein executives and investors act on behalf of the company, but their personal incentives do not necessarily align with the company’s. For example, a CEO has a vested interest in pumping up profitability in the short term, even if it’s by slashing R&D funding and alienating customers long-term, so they can get nice numbers to pad their resumé. Likewise, investors just want their investment back.
With a coop, overall control of the company’s decisions is guided more by the long-term health of the company, as that’s what is best for the workers. It aligns incentives, avoiding the perverse incentives that cause hierarchical businesses to make unsustainable, short-term business decisions.