‘But what is this property?’
Wednesday, August 22nd, 2007When we buy and sell companies, what are we talking about?
Charles Handy: ‘It seems to me rather obvious that the current system of capitalism is not going to be sustained, and let me explain why. The assumption, in the Anglo-American context — and it’s different in continental Europe, different in Japan, in China — is that the company is a piece of property, owned by the people who buy shares of it. They therefore have the right to sell that property. But what is this property? It increasingly is a collection of people. The tangible, fixed assets of these corporations are worth considerably less than their market value. If you take the pure knowledge organizations — advertising agencies, banks, software companies — the market value may be 20, 30, 40 times the fixed assets. I think the rhetoric of the stock market is concealing from us the fact that what we’re actually talking about is owning other people.
Now when we think about it, this is both strange and in the end unworkable, because organizations, as we know, are whittling down to the core. Outsourcing everything they can. They are going to employ a relatively small proportion of all the people they need. Those core people, therefore, are going to be rather competent. And they are going to resent being owned by other people. They’re going to say, “No, you can’t just sell us over our heads or dictate our strategy. Furthermore, if you don’t like it, we will leave.” So what is the point of saying that you own something when actually that something can walk out the door?’
Can a company be more like a town?
David Ellerman: ‘”A democratic firm is a company “owned” and controlled by all the people working in it—just as a democratic government at the city, state, or national level is controlled by all of its citizens. In each case, those who manage or govern are ultimately responsible not to some absentee or outside parties but to the people being managed or governed. Those who are governed vote to directly or indirectly elect those who govern.
In an economic democracy, there would be private property, free markets, and entrepreneurship—but “employment” would be replaced by democratic membership in the firm where one works.’
Charles Handy: ‘You begin to see it in….the citizen company. The inhabitants, if you like, are citizens. They have rights. They have the right of free speech, to express their preferences. They have the right of residence.’
David Ellerman quotes from: The Democratic Worker-Owned Firm. 1990, London: Unwin Hyman Limited - HarperCollins Academic. (out of print) Revised and published in Chinese as The Democratic Corporation 1997, Xinhua Publishing House, Beijing.
Download the full text from: http://en.wikipedia.org/wiki/David_Ellerman
Charles Handy quotes from: http://www.leadertoleader.org/knowledgecenter/L2L/summer97/handy.html
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