2mo ago

What if we got rid of stocks?

Ive often seen individuals on the left talking about how billionares shouldnt exist etc., but when probed on how that could be accomplished the answer is usually just taxes or guillotines. I dont think either is great.

What if instead, corporations were made to be unable to be sold or owned. Initially theyre made to default to popular election for their board, and after that they can set up a charter or adopt a standard one, ratified by majority vote of their employees.

Bank collapse would probably follow, how could that be remedied? Maybe match the banks invalidated stocks with bonds?

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Even if we ignored the immediate collapse of the world economy, if you were starting from scratch how would you get anyone to take risks and put money/time into creating a business?
Even if people did decide to do it, no banks would be able to lend to you (what banks? They need a massive amount of money to start) as they would have absolutely nothing as collateral.
- How would you get anyone to take risks and start a business
  People create things all the time without a profit motive. Assuming they have a good safety net behind them that allows them to start up there ideas people will create. Case in point the app were on right now, it's developed open source with no profit motive, no stocks, no company. It's built by a bunch of hardline communist who believe in an open social network.
  What banks
  There are credit unions that function as co-ops with no stock ownership
  they would have absolutely nothing as collateral
  Co-ops can have collateral just like any other business, property of a store or factory, stock ( in the product sense ) etc. Yeah we wouldn't have silicon valley with vcs betting millions on unproven tech, but do we really need that?
  Also this is all assuming there's no state involvement or planning. The state has a great credit line that it can use to backstop loans for small cooperative enterprises or just create the enterprises itself, eg. City run grocery stores like zohrans been pitching.
  
  That's fair.
  Didn't think about coops, I assume that if they went completely underwater their creditors would still own them though.
  Could all still work, but could be clunky, would probably all get worked out in time.
  
  if they went underwater
  Bankruptcy would work the same as it does with a stock company. Since Bankruptcy is just liquidating all a companies assets then forming a queue of people with claims to that money, with secured debt holders at the front of the line and stock holders at the back, you'd just remove the stock holders at the back, maybe replace them with the employees to give them a sort of "severance"
  
  But why would people take loans out to start businesses if there’s no way to pay the loan back? Where is any profit from the business going?
  Without ownership of a company there’s no reason for anyone to start a company and take on all the risk.
  
  why would anyone take out loans to start a business if there's no way to pay the loan back?
  The co-op would pay the loan back and treat it like any other cost of doing business, like buying components / ingredients or paying rent.
  where is any profit from the business going
  It would go to the employees. There would be no profit in the typical sense of revenue - costs - payroll, any excess after costs just goes to payroll
  without ownership of the company there's no reason for anyone to start a company and take on all the risk.
  People start companies / organizations all the time where there main motivation isn't profit. Your average restauranter is not doing it for the money, if they are they're delusional. They do it because they like cooking / food or want to create a space for people to gather. Sure some people are motivated by making a profit and we'd miss out on there businesses, that's the cost of a more equitable society. Marx himself praised the dynamism and creativity of capitalism but didn't think it was worth it for the working class who could get far more of the pie if they weren't giving a cut to the owners. This is becoming more true as that dynamism and creativity is going towards AI garbage and crypto and financial schemes
  As for the risk, most of the financial risk of owning a business is shed when you create an LLC. The other risk of making no income while the business is getting off the ground can be mitigated by a social safety net that allows people to pursue these enterprises without worrying how they're gonna eat or pay rent.
  
  So every business is a co-op, but only one person takes out the loan to start the business? So only 1 person is on the hook if it fails, but everyone benefits if it succeeds?
  It would go to the employees. There would be no profit in the typical sense of revenue - costs - payroll, any excess after costs just goes to payroll
  But this is the same as all of the employees having stock in the business. It means if the business turns into the next amazon, all these employees will be - get this - billionaires! Isn't that precisely what OP is saying they don't want?
  Your average restauranter is not doing it for the money, if they are they’re delusional.
  They absolutely are, because they want the restaurant to provide for them. They don't open a restaurant with the dream of working another full time job as well as running the restaurant so they can pay their bills.
  The reason people start businesses is so they can be their own boss and be financially independent. It is always about money, unless they already don't need the money.
  Marx himself praised the dynamism and creativity of capitalism but didn’t think it was worth it for the working class who could get far more of the pie if they weren’t giving a cut to the owners.
  Cool, now show me the communist countries where everyone is equally wealthy and there is no poor underclass and no super rich upper class rulers.
  As for the risk, most of the financial risk of owning a business is shed when you create an LLC.
  It absolutely is not lol.
  by a social safety net that allows people to pursue these enterprises without worrying how they’re gonna eat or pay rent.
  Ok so now you're talking about a UBI, correct? That's fine, I think a UBI absolutely needs to be trialled and explored - but that's got nothing to do with the absurd notion of getting rid of stocks. Even with a UBI, loans from failed business startups would bankrupt you and make you lose everything.
  
  only one person takes out the loan
  No, a group of people would form a co-op, just like how people form a company, and the co-op would take out the loan. Entities can take out loans just like people can
  but this is the same as all of the employees having stock in the business
  No, stock is transferable and sellable, and not equal. If every employee got stock then one of them could / would sell it to someone with cash upfront. Now that new person is now getting money from the business without contributing any labor. They can then use that money to buy more stocks and make a passive income off the company. This leads to capital accumulation and a class of people making money off other people's labor just because they have more money, or had more money at the start.
  As for Amazon the average employee would be making a lot more then they are right now but they wouldn't be billionaires. Billionaires never make there billions off working, they make it off capital gains, and since the shares aren't sellable, and thus have no monetary value, there'd be no idea of capital gains for a worker in a co-op.
  For the restaurant example I agree they may want to start a business for economic security, but thats not the same as getting rich. Economic security can be provided by a social safety net.
  I also agree they may want to start one because they lack autonomy, but I'd say that's largely the result of the alienation of working in normal stock owned companies where the owners make the decisions. If you are working in a co-op and get to have a say in all the decisions that alienation is partly ameliorated. If you want a hand in more decisions then you can "run" for a managerial position and get elected, administrative work would still be necessary in a co-op.
  For the communist question most communist countries were more equal then the capitalist countries before the cold war ended. They were poorer, that's partially due to inefficiency, but also due to the fact that most of them developed later then the capitalist countries there often compared to. If you look at one of the last hold puts in Cuba it could be argued that the quality of life for the poorest there is better then the poorest in the u.s. as they have better access to food, housing and healthcare. I'm not going to defend the oppressive political regimes of those countries, but the standard of living wasn't as bad as a lot of people make it out to be.
  Could you explain what financial risk is still there if you make an LLC? My understanding was the whole point of an LLC was to guard someone's personal assets from risk if the company goes under.
  
  Oh so now you need a group of people to decide they want to start a business and take out a loan? So right there we've now eliminated small businesses run by a sole trader, yay? So now you need a bunch of people to all put their livelihoods on the line, and as soon as they hire more employees their share of the co-op is diluted while their loan portion is not. Again - yay?
  So if one of the original starters quits or is fired from their job, what happens? What happens to their part of the loan? Do they get a payout when they leave? If not, again, why would they ever take the risk?
  For the communist question
  So there are no communist countries that exist where everyone is equally wealthy and there is no poor underclass and no super rich upper class rulers? That's what it sounds like to me. Hmmm, I wonder why communism has failed literally every time it has been attempted? But I'm sure this time communism would work, right? The others just didn't do it right, right?
  Could you explain what financial risk is still there if you make an LLC? My understanding was the whole point of an LLC was to guard someone’s personal assets from risk if the company goes under.
  You can't just make an LLC, take out a huge business loan, and then wipe your hands of it if the business the LLC runs goes bankrupt lol.
  
  I don't think your understanding how this works, the loan is on the co-op as an entity, not the individuals. A single person or group of people can form a co-op, just like how they form an LLC. That co-op can then take out a loan just like a company can take out a loan. That loan is the co-ops liability, not any of the members. If any or all of the original members leave that loan will still be on the co-op, the original members will not be responsible.
  I think you have a misunderstanding of limited liability in general, per wikipedia:
  Limited liability is a legal status in which a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a corporation, company, or joint venture. ... A shareholder in a corporation or limited liability company is not personally liable for any of the debts of the company, other than for the amount already invested in the company and for any unpaid amount on the shares in the company, if any—except under special and rare circumstances that permit "piercing the corporate veil."
  So yes you can just make an LLC , take out a huge business loan then leave and wipe your hands of it. The bank knows this and that's why when they give out loans they evaluate whether the company can pay it back, not an individual. The loan will also probably come with stipulations ensuring some sort of corporate governance so you personally can't just drain the company account and walk off with the money. Doing that would be embezzlement.
  As for the communist question, were soviet style communist countries perfectly equal, no, but the situation your describing of a poor underclass and super rich upper class rulers is way more reflective of capitalist countries then communist ones. Yes there were high ranking beuracrats at the top but they weren't living in the lap of luxury, the highest ranking soviet officials lived in the house on the embankment where the largest sized unit was 3,200 square feet and the average unit was 2,000 square feet. Compare that to a millionaires mansion in the u.s. Communist societies were far more equal then capitalist societies and the idea that there's some gang of rich exploiters at the top hoarding all the resources is your projection.
  
  These communist countries must be thriving then, right? Which ones are they again?
  
  aLl ThE rIsK
  The owners are risking their fuck-around money. The workers are risking their shelter.
  
  You think everyone that starts a business are rich already?
  The people taking the risk by starting the company are the ones risking everything, not the employees that they hire lol
  
  "Rich" is a relative term. But nobody starts a business when their basic needs aren't already met, because they literally wouldn't be able to. That inherently makes them richer than the job seekers.
  
  People start businesses all the time when their “basic needs aren’t met” because they need to earn money to be able to meet their basic needs.
- With a proper UBI and social safety net they’d be raking much less of a risk.
- im definitely interested in not collapsing the world financial system, but its a tough problem to find a solution to.
  there are other assets besides stocks banks could own - loans would definitely be a much bigger part of the pie.
  As for starting a business, itd make sense to only hire on people you trust at first. Afterward you have to continue to show your worth not to investors but to employees.
  As an alternative to trust, you could cut your own business a loan, so that if youre ousted as long as it doesnt go tits up you still get a payout.

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