Employee-Shareholders

Self-governance is one of the key principles of classical republican thought. In line with our commitment to classical republicanism we are in favour of self-employment, whether it is through sole proprietorship, partnerships or cooperatives. Ideally being an employee should be a temporary phase between school and self-employment.

In addition to the legal forms mentioned above, self-employment could be established through employee stock ownership plans or ESOPs. Roughly speaking this means that employees of a joint stock company, will receive stock of the company where they work. Like all other stock owners, if any, they will be paid dividends and will get voting rights in the general meeting of shareholders.

The type of employee stock ownership plan we propose, has the following features:

  1. Employees will be offered the option to have a part of their salary to be paid in shares of their employer;
  2. The voting rights of the employees are exercised by the council of employees.

The plan has several benefits. The employees have a strong incentive to pursue the interests of the company, because their dividends and the overall value of their stocks depends on the company’s performance. Further employees will be able to accumulate a certain amount wealth in the form of stocks over time.

Next question is how companies could be seduced to enable an ESOP? We have the following suggestions:

  1. Companies with an ESOP will be able to obtain interest-free loans. The more employee owned shares, the greater the interest-free loan the company will get;
  2. Companies with an ESOP will receive preferential treatment of the government to companies without. Think about getting orders from the government.

Employee stock ownership plans are also promoted by some economists as a tool to reduce inequality of wealth.

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4 thoughts on “Employee-Shareholders”

  1. Great concept. After years of frustration working as an employee, I did some research into the traditional employer-employee relationship most of us take for granted. In America, the laws which codified this relationship ramped-up after the U.S. Civil War. Previously, workers who provided labor were generally independent contractors, indentured servants, involuntary servants (i.e. peonage), or slaves.

    Subsequently, when the latter three worker classifications were made illegal or otherwise eliminated, businesses wanted to reassert their control over labor. Legislative and judicial actions then formed the basis for the current employer(authority)-employee(subordinate) relationship. In the Progressive Era that followed, minimum labor standards, worker protections, and collective bargaining strengthened the position of employees (which are now again under siege in the U.S.).

    I’d like to know more about the history of labor relations in the U.K. and Europe.

    Personally, I find this relationship to be innately authoritarian. I would prefer all workers to be designated as independent contractors with labor standards set democratically by the state. Employer-provided benefits such as health care and pensions should be nationalized programs. If contractual workers were adequately protected through government, there would be no need for labor unions, and the exploitation of employees would cease.

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