Capitalism would have succeeded if employees could
have invested in their workplace. Not just stocks, but
the working fund as well. If employees had been
offered the opportunity to gain from their investment
from the net profits they would have been more
motivated to make the company work profitably.
The faster a company turns over inventory the
greater their profits, potentially. They're not going
to make money if it costs more to operate than their
sales so employees are motivated to maximize efficiency
and profits if they're invested.
As an example lets say a gas station has an account
for buying gas that they sell to the public. They buy
the gas wholesale, mark it up, and hopefully sell it
for a profit after rent, utilities, supplies, labor,
etc. have been paid. Suppose the account from which
they bought the gas, and paid expenses, consisted of a
fund where employees could contribute, like a savings
account. Periodically, once a month or so, the
profits, if they made any, would be put back into the
fund with each employee gaining a percentage of the
newly contributed profits based on the amount they had
contributed to the fund previously. Imagine the
motivation of an employee to make this fund grow if
they'd invested as opposed to just collecting a
paycheck. Loss to their fund value would motivate the
employees even more to make the business work
profitably.
Unfortunately today's business model leaves
employees without an invested interest in their
workplace. It's to the employees best interest if the
customer goes away, buys less inventory, and the
employee will have less work to do. When an employee
just collects a paycheck, profits, in reality, are just
extra work. No matter how well intentioned a person
is, sooner or later they have to give in to the laws of
physics and prefer an easier life if they can get it.
The retribution to business is far more devastating
than we suppose. Employees slough off work, 'drag
their feet', and even drive customers away in order to
reduce their work load. The effects are devastating to
the business and to the overall economy in a
capitalistic system.
Another advantage employees may experience, is if
the fund is successful it may attract outside
investors. A larger investment fund may mean lower
costs on inventory thereby creating a greater
opportunity for employees to create profits.
The equation is more complicated, of course, but not
much. The business owners, maybe with input from
employees, will have to figure out a formula for
disbursements of funds that work for their service
inventory ratio. A gas station owner, for example,
will tell you they don't make a profit on gas but
rather the services they offer.
Part of the reason direct employee investment hasn't
transpired in our economy is that a small business
start-up owner feels obligated to pay employees for
their time while the business is starting to grow to a
point where it can make a profit. He or she can't
guarantee profits at start up, so it would be difficult
to find people who wanted to work and loose money when
the business first opens. Once the business is
profitable, and most (95%) never make it to this point,
the business owner would be making a personal
compromise, a sacrifice, to include employees into the
profit margin they worked so hard for and took the risk
on.
On the flip side, for employee investment again, if
the investment plan could supplement outside
investment, it may offer alternatives to bank loans or
note selling. If the conditions set forth for the
employee investment fund were similar to those of a
bank loan, for example, then in reality, the employees
may be taking an efficient short cut to collecting
interest on their savings account via direct investment
in the business and the business owner could save the
expense of having a loan processed.
Anyway you look at it, the economic fabric of
capitalism would be much stronger if employees invested
directly into their workplace.
