A Real Ownership Society by Tom Cobb

From the Publisher

A "how-to" guide for creating better corporations.

Many believe that the bankruptcy of United Airlines gave us the final verdict on worker ownership. In reality, this failure has given us the answer for how to make modern capitalism work. By restructuring our corporations as a formal partnership between holders of investment capital and human capital (workers) whose investments are equally exposed to business risk, the friction of distrust between the two can be eliminated. More importantly, we can eliminate our inefficient and dysfunctional reliance on the agents who now run our corporations. By eliminating the need for inattentive corporate boards, overpaid executives, professional money managers, and bureaucratic union leaders, workers and investors can both put more money in their pockets.

A Real Ownership Society provides the steps to take in order to transform corporate capitalism into a system that works for all investors, workers, consumers and citizen without the interventions of government.

• Read an Excerpt

Read an Excerpt

President Bush has made his notion of an "Ownership Society" the cornerstone of his economic policies. In advocating for the privatization of Social Security, Bush has extolled the virtues of ownership... While this campaign likes to emphasize the sense of responsibility instilled by ownership, this emphasis depends upon an utterly shallow understanding of the modern definition of ownership, especially as it relates to the corporation. This understanding pretends the ownership stake one has in their home is much the same as the stake they might have in a corporation as a shareholder. In reality, there is little about the two that is the same. Homeowners are wholly and solely responsible for the use or misuse of their home. Homeowners typically expect to hold their homes for the long-term, and recognize that some difficulty and effort is required to sell them. Lastly, aside from market forces beyond their control, homeowners will have the greatest impact on any increase or decline in the value of their property.

Very nearly the opposite is true for each of these conditions when it comes to corporate ownership. A corporate shareholder is legally absolved of responsibility for the actions of the corporation. On average, shareholders hold specific shares in a company for less than a year, and can sell their shares anytime, in minutes. In fact, shareholders of the type the President is trying to appeal to typically own their shares via ownership in a mutual fund, and thus have little or no idea what particular shares they own at any given moment. As for the influence a shareholder might have on the value of their shares, it is virtually nil.

Once this limited understanding of corporate ownership is discarded, it becomes apparent the virtues attributed to an Ownership Society appear more as vices. Corporate irresponsibility is encouraged instead of personal responsibility; market speculation is promoted over true long-term investment; and personal control is hailed where none exists. Despite the deceptions imbedded in the Administration’s promotion campaign, the President has done the nation an unintended favor. With his call for an Ownership Society, his stated belief in the virtues of personal ownership is fully on record. With this goal no longer in dispute, any genuine reform plan should concentrate on restoring the virtues of personal ownership to the corporate form of ownership. The intent of this book is to propose a path for accomplishing this end, the creation of a true Ownership Society.