Employees as stakeholders

The biggest problem I see with Bookchin’s vision of utopian regional production is cheap transport mechanisms for raw and finished goods. His dream of regional, community centered, holistic production cannot exist in a world where goods can be so cheaply transferred. The other thing he overlooks is the impact of economies of scale on centralization of production. The economics of scale argument is that per-widget costs decrease as number of widgets manufactured increases. Coupling economics of scale with low costs for transporting raw and finished goods inevitably leads to a centralization of production. Smaller manufacturers get squeezed out by larger players who can produce the same widget for less.

So maybe we’ll never have the small community minded production that Bookchin proposes. Imagine a firm where instead of salaries every employee received a stake in the firm’s output. Not stock like we now conceive of it, but a stake that only current employees would get. Employees get their stake when they join the company and they relinquish it when they leave. An employee cannot sell or otherwise transfer their stake. Different levels of employee would have more or less stake. It would not per se be egalitarian, or distributed equally. A CEO might have ten times more stake than a janitor, but they would all receive their monthly salary based on how much stake they had. Employees would get paid based on the performance of the firm X months previously. Where X is probably between 3-6 months depending on how tight the accounting needs to be. The firm would generate no profit; its entire proceeds would instead be paid to its employees. The CEO could still get rich, as he might have 50 times more stake than the janitor. The important thing is that everyone’s compensation is tied to the firm’s performance. They all have a stake in it.

A constitution could be written to constrain, among other things, the multiplier between the smallest stakeholder and the largest stakeholder. Maybe the CEO could never have more than 30 times stake than the janitor? Employees would regularly provide confidential feedback on their immediate superiors, their subordinates, and their peers. Using this information, and most likely a complex governing process, stake could be reapportioned at a given interval.

Could this work? It’s something of a compromise between Bookchin’s need for the workers to own the production, and the realities of global production I outlined in the first paragraph.