A playful paragraph from the book by Majorie Kelly, which I’ve lately been re-reading:
We might note that while employees in the community are left to the protection of the invisible hand, wealth is protected by the visible hand of government and corporations. But this is something, it is hoped, that will be overlooked.
To help us begin to see it, we might, for a moment, imagine a different arrangement of institutional power. Picture a free market in which labor rights are enthroned in law, and property rights are left to the invisible hand. This would be a world in which we believe employees are the corporation. They are, after all, the ones running the place. Hence only employees could vote for the board of directors, and the purpose of the corporation would be to maximize income for employees. In theory, stockholders would receive income they negotiated through contracts. In practice the corporation would dictate those contracts with little real negotiation and stockholders could accept the terms or go elsewhere, only to find other corporations offering nearly identical and dismal terms.
In this world, stock would be sold in a manner controlled entirely by the corporation, much as wages are set today. Stockholders would appear alone at the company where they would be taken into a room and made an offer. There would be no reliable way to compare current stock price to pass price, the return one person receives to what others receive, or to compare returns from one corporation to another. Wage and benefit data, on the other hand, would be published daily in “The Main Street Journal”, and the movement of the Dow Jones wage index would of course be tracked nightly on the news. But returns to shareholders would be considered proprietary information and would not be given out.
If stockholders tried to improve their negotiating position by organizing into mutual funds, corporations would threaten to cut off payments altogether. The companies would talk about replacing stockholder money with funds from people overseas were willing to accept lower returns.
And, of course, overseas, stockholders would have seen even less power. Although free trade agreements would provide intricate protections for labor and environmental rights, they would offer capital no protections. “What does capital have to do with trade?” pundits might ask. “Trade is about goods and services and the people who create them, it’s not about capital.”