Or are you talking about some abstract "purpose of business" in general, rather than the purpose of a particular business? If so, by what mechanism does abstract "purpose of business" influence actual people's actual business decisions?
Of course that's what I'm talking about. The shoe manufacturer makes shoes. It doesn't matter if some dictators at the top are stealing from those at the bottom. The company still makes shoes. When the workforce becomes free and operates democratically it will still make shoes. The purpose of the business will not change.
So your theory is that a shoe company will do the exact same thing because its purpose is to make shoes, even though it's run by different people who have different goals? By what mechanism will that purpose bring about the same decisions? Are you saying the democratic vote of the workers will be to do whatever maximizes shoe production even when that's not what's in the workers' best interests? In the current economy, shareholders don't vote to maximize shoe production even when that's not what's in the shareholders' best interests; if they did, the company would never pay a dividend.
What are these incredible changes that will take place simply because we get rid of all these petty dictators and introduce democratic control?
I already gave you one example: they'll be more resistant to hiring, resulting in much smaller companies on average.
Of course this is a positive. More companies means more innovation. It means more jobs. It means more jobs requiring skills and training. In other words it is good for workers but bad for dictators.
You're missing the point. It's not an issue of whether you like the outcome better; it's not an issue of whether an economy predominantly made up of little garage-sized outfits is a good thing on balance. The point is it's
different. You can't justifiably assume "nothing else will change except power structures". All sorts of things will change. So when you claim a company will pay its workers better because it's paying some capitalist less, taking for granted that the sum of the two won't go down because it has just as much revenue as before,
you need to show your work!
Among the consequences of much smaller companies is that they no longer have
economies of scale. If the means of production had been turned over to worker-owned co-ops ever since 1800, then today there wouldn't be giant factories with assembly lines, just a million little workshops, which means there'd be a thousand little shops turning out horse-drawn buggies and no little shops making cars. When cars are made in little shops, a car is a rich man's toy. And there wouldn't be any rich men. But yes, there'd doubtless be a great deal more innovation in buggy design.
Here's another: they won't be able to attract passive investors with promises of a share of the profits so they'll find it harder to acquire capital equipment, resulting in the economy shifting away from capital-intensive production.
I don't see why there wouldn't be investing. If people could make money with money and no work they will do it. So it would be permissible to invest in companies. What would be illegal would be control of companies by investors.
But that makes all the difference. It would be permissible, sure, but it wouldn't be a rational thing to do for a share of the profits. After the workers use the investment to buy capital and increase the company income, they can set their wages at 80% of income and give the investors the contracted 50% share of the remaining 20%, leaving themselves with 90% of the income. Or they can set their wages at 100% of income and give the investors the contracted 50% share of the remaining 0%, leaving themselves with 100% of the income. This is exactly what happened in Anarchist Spain when the CNT ordered profitable worker-collectives to give a hefty share of their profits to poorer collectives, to the unemployed, to the war effort, and, inevitably, to the CNT. Collective after collective voted to raise their own wages and improve their own working conditions until they no longer showed a profit. Investors aren't idiots. They understand the incentive structures that their arrangements with businesses will cause the businesses to be operating under, and they understand that people respond to incentives. What you propose to outlaw -- the control of companies by investors -- is precisely what gives the investors in a conventional company the assurance that this incentive to torpedo profitability will not kick in.
The consequence is that in an economy dominated by workers' co-ops, investors are going to offer co-ops
loans rather than
purchases of stock. In the event that having the extra capital doesn't make the company prosper as much as the workers hoped it would, that will be all on them --
they'll still have to pay back the loan. Selling stock in your company will no longer be a way to spread
risk. Companies will no longer be able to do anything with more risk than the workers can afford to bear all by themselves. Companies will react to this by being far more cautious and conservative. And it's not just capital investment that's risky. Innovation is risky -- a new technology may have an unforeseen flaw. Hiring a new worker is risky -- he may be a screw-up. Giving him a new skill by offering him training is risky -- he may quit and go to your competitor. Everything you listed as good for workers and bad for dictators, you're giving companies an incentive to do less of.
Again, you seem to equate democracy with greed and stupidity. But of course that is dictatorship. A democratic body will recognize that some skills are more valuable than others.
Excuse me? I'm not equating democracy with greed and stupidity; I'm equating voting workers with normal human beings. People currently mostly do what they think is in their best interests; all I'm assuming is that that will continue. Worker-controlled workplaces will make different decisions from investor-controlled workplaces, not because workers are an iota more or less greedy or stupid than investors, and not because parliaments are an iota more or less greedy or stupid than kings, but because the incentives faced by the decision-makers have changed.
When I say the majority has an incentive to pay the elite few at the top a whole lot less, I'm not talking about CEOs. I'm talking about every worker who gets much higher pay than typical workers: the doctors, lawyers, forensic accountants, engineers, geologists, actuaries, pilots, air-traffic-controllers, what have you -- all the people who aren't employed in sufficient numbers to outvote a majority who see their high salaries as tempting targets.
So when all your engineers walk out the company is dead. So any company stupid enough to not look after everyone will collapse. Just as being a dictator is a fine line. You can't simply take everything for yourself, only as much as possible, with dictatorial power.
Of course; but the location of that fine line will change. You're talking as though equal pay for different work is all or nothing. No, a company stupid enough to not look after everyone will not collapse. It will look after
some of the engineers;
some of the engineers will walk out. The company will adjust; it will do business in a way that still requires engineers but not as many as before. It will still pay engineers more than HR clerks, just not as much more. Meanwhile, lots of engineers will go find or go start up firms where they can't be screwed because the engineers are a voting majority, while lots of companies that lost half their engineers when they cut their pay will find they need to hire the services of outside engineering-only firms, probably at higher prices than ever. Being an engineer will start to look a whole lot more like being a lawyer. The same will happen with all manner of high-skill professions.
The overall point is that all these adjustments companies would have to make to deal with the consequences of prohibiting control by investors are
inefficiencies. They will make individual companies less productive; they will make some workers 100% less productive by increasing unemployment; collectively they will reduce the economy's overall growth rate so in the long run most workers will end up with less purchasing-power. Preferring to work for top-down companies is usually rational because on average they'll pay better.
Why exactly are you singing the praises of dictatorship with such enthusiasm? Would the world be worth less if we got rid of all the dictators?
Why exactly are you having this conversation with me? ...
You're defending the current system, which is a dictatorial system. That is how capitalist companies are organized. All power to make decisions is at the top. And those at the bottom only have the power to take it or leave it, but no power in the company they work for.
Okay, so the answer is you're reciting your catechism in order to convince yourself. The power to take it or leave it is a power, a power in the company, a power to make a decision; so when you say all power is at the top you're contradicting yourself.
Moreover, workers have far more power in a capitalist company than just to take it or leave it. They have the power to unionize and strike if they feel they aren't getting a fair shake. They have the power to sue if the top decision-maker makes illegal decisions or fails to enforce their legal rights against oppressive middle management. You can't sue a dictator; you can't go on strike against a dictator. A dictator doesn't have to provide safe working conditions or pay minimum wage. A dictator can racially discriminate and sexually harass, or let his lieutenants do so; he can have you shot or jailed on a whim; and he can bar you from quitting your job and bar you from quitting his country. So no, the current system is not a dictatorial system. You can go on asserting that it is as many times as you please; but a thousand times nothing is nothing.
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