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:
- Employees will be offered the option to have a part of their salary to be paid in shares of their employer;
- 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:
- 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;
- 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.