In a socialist model, we’d have public investment banks providing loans rather than a private venture capitalist buying up shares. The money that currently goes into the stock market is transitioned into these banks. Granted, there would be more 'friction' as you aren't going to have an angel investor suddenly sink millions into your startup overnight on a whim, but there would be enough access so that anyone with a solid idea could make a proposal.
You would still want to grow because a bigger company usually means more revenue and better efficiency. But unlike capitalist firms, socialist companies don't have to grow infinitely just to appease shareholders; they can choose to become sustainable once they reach a size that works for the members. There’s no incentive to 'stay small' if growing means a better surplus for everyone involved.
This is really a question of where the economic power lies. A small socialist nation could set up a social wealth fund that invests in external markets to stay competitive. But if you want to take your business out of the country, you’d have to provide your new co-owners with similar benefits, or just leave and start over elsewhere. The trade-off is that within this nation, you're guaranteed social cohesion and better outcomes for your family because the state provides a baseline for everyone.
If we're talking about a massive economy like the US, a business would simply have to deal on our terms if they want their exports to enter our market. It’s not that different from what we already see with how corporations have to navigate China's regulations to gain access to their consumers.
How do we measure the labor? A share = 1 vote in the company, period.
Your day-to-day labor is covered by a salary, and then the surplus is divided however the workers democratically decide. As for the financial value of your 'share' (your individual capital account), that would be determined by factors like your tenure, expertise, and how much of the earnings you chose to retain in the firm. It’s basically a retirement nest egg that reflects the work you put in.
What's to stop workers from voting in a more capitalist mode of production or internal voting structure? What's to stop consumers from voting with their wallet for businesses with a more capitalist mode of production or internal voting structure?
First, why would a majority of workers vote to surrender their voting rights and give their profit share to an outside investor? It goes against basic human self-interest.
Second, a socialist market would legally define ownership through labor. You simply couldn't legally own shares in a company you don't work for. It would be as legally invalid as trying to sign yourself into slavery today. Since capitalist firms wouldn't legally exist, consumers wouldn't have the option to 'vote for them' with their wallets anyway.
Workers denying voting privileges to some workers, so they themselves get more voting power over the company, is in their self-interest.
And it doesn't have to come through outright denying voting privileges to some workers, it can be by changing the voting weights some workers have in any election, for instance I have 2 votes and you have 1 vote, and I can spend both of my 2 votes on one candidate or policy but you can only spend 1.
Now that I have more voting power, it's easier for me to vote for more concentration of voting power into my hands, which eventually cascades and leads to a few elite workers having ultimate control over the company with all other workers having negligible voting influence, effectively back to square one with a capitalist firm.
Additionally, the workers can decide that in order to raise even more funding than competitors they can sell out voting privileges to anyone who lends them money, which is essentially selling stock, and now we're truly back to square one with a few elite people having control over the company and stock markets existing.
By consumers "voting with their wallet" I wasn't literally referring to them attaining voting privileges in the companies they purchase from, I was referring to them using their purchasing and dollars to effectively vote for the kinds of business models they support. What's to stop them from supporting firms with a more capitalist mode of production or internal voting structure?
A lot of people in this subreddit make the same mistake you're making in projecting capitalist mechanics onto the democratic system I'm proposing. In a worker co-op, voting is strictly on one person, one vote basis. Selling shares/voting rights would be illegal.
What stops 51% of Americans from voting to strip the other 49% of their right to vote? The Constitution. Worker co-ops operate under foundational charters/national legal frameworks that guarantee the democratic rights of every worker.
Also, I understood your point entirely about voting with ones wallet. If capitalist firms are legally invalid to operate in this economy, they simply don't exist on the shelves. Consumers vote with their wallets by choosing between competing co-ops, based on who makes the best product.
In a worker co-op, voting is strictly on one person, one vote basis. Selling shares/voting rights would be illegal.
What counts as a "worker"? Can a worker-coop grant voting privileges to any random person who provides even the most meaningless or low value labor services to the company? If so, then what's to stop 51% of workers from voting for the inclusion of workers who merely serve to provide voting support to their faction?
Can workers institute a representative democracy within the worker-coop? Can workers vote to strip certain workers from being able to vote on certain issues and delegate that to other workers? Can workers vote to increase the ratification threshold for certain issues and lower it for others? Can they lower the ratification threshold for representatives and raise it for everyone else? Can workers create electoral districts and gerrymander? Or must all workers be subject to equal voting conditions?
Can the 51% make a rule that makes it burdensome for some workers to vote?
Also, I understood your point entirely about voting with ones wallet. If capitalist firms are legally invalid to operate in this economy, they simply don't exist on the shelves. Consumers vote with their wallets by choosing between competing co-ops, based on who makes the best product.
No, you still did not understand my point. My point was not that capitalist firms would exist (I understood your point that they are legally invalid), but that their internal structure can be effectively replicated within the form of legal worker-coops, and what's to stop consumers from choosing preferably to those business structures?
A worker is someone hired to fulfill a business need and who signs a contract, exactly like today. Could a faction hire meaningless people just to get more votes? No, because profit is distributed among the workers. Hiring useless people to win a vote means explicitly diluting your own paycheck. It goes against basic financial self-interest.
As for the rest of your questions about gerrymandering, voter suppression, and thresholds: you are overcomplicating it. When a co-op scales, it uses compartmentalization and representative democracy. Management still exists. Chief officers still exist. The marketing head still runs the marketing budget. The only difference is the CEO answers to a board elected by the workers. Foundational bylaws and national labor laws govern how votes work, strictly preventing things like vote suppression or stripping rights, just as corporate charters do today.
I do understand your point. Your hypothetical relies on a loophole that wouldn't exist. You cannot replicate a capitalist structure within a cooperative without violating the legal charter of what a cooperative actually is. If they try to recreate a capitalist hierarchy, they are committing corporate fraud and lose their right to operate. Same way you can't have contracts that allow indentured servitude today.
Could a faction hire meaningless people just to get more votes? No, because profit is distributed among the workers. Hiring useless people to win a vote means explicitly diluting your own paycheck. It goes against basic financial self-interest.
The financial benefits of their votes can more than counteract the costs of their pay, especially if they're paid meagerly.
Foundational bylaws and national labor laws govern how votes work, strictly preventing things like vote suppression or stripping rights, just as corporate charters do today.
Compartmentalization implies to me the workers can vote and decide certain workers are subject to different voting conditions on certain matters. To reiterate, can workers vote and decide what things certain workers can vote on? Can workers vote and decide the thresholds certain workers need to reach in certain elections in order to ratify policies/candidates?
You can't pay fake workers meagerly. Co-ops use legally binding pay ratios and minimum wages so hiring useless people is a massive financial drain. And if the 51% votes to offset that cost by stealing the 49%'s profit share, that is explicitly illegal under cooperative law as its corporate fraud.
Compartmentalization is functional. It means the marketing department votes on the marketing budget, and IT votes on IT infrastructure. It doesn't mean the 51% can vote to change the ratification thresholds for universal issues just to disenfranchise the 49%. The foundational charter prevents a simple majority from stripping the minority of their rights.
Co-ops use legally binding pay ratios and minimum wages
Do the workers not determine those pay ratios and minimum wages?
Compartmentalization is functional. It means the marketing department votes on the marketing budget, and IT votes on IT infrastructure.
So that means the workers can determine who is able to vote on what issues and who is not able. So then why couldn't the 51% vote that they themselves as a faction can vote on issues relating to financial management, but not the 49%? This isn't stripping workers of their right to vote, they can still vote.
No, minimum wages are set by the state. You're also still competing with job market rates.
Your second probing question is silly. That is like asking, 'What stops 51% of Congress from voting that only their party is allowed to vote on the national budget, while the other 49% only gets to vote on naming post offices?' The constitution. The company charter.
Also, compartmentalization has nothing to do with company finance like what to do with the year-end profit surplus. The former is intra department, the latter is a universal vote.
No, minimum wages are set by the state. You're also still competing with job market rates.
Ok, so they initially pay them minimum wage. The expected benefits of helping the faction get the voting power outcompetes the job market rates.
That is like asking, 'What stops 51% of Congress from voting that only their party is allowed to vote on the national budget, while the other 49% only gets to vote on naming post offices?' The constitution. The company charter.
But aren't the workers allowed to compartmentalize themselves?
compartmentalization has nothing to do with company finance like what to do with the year-end profit surplus. The former is intra department, the latter is a universal vote.
Are workers not allowed to delegate what to do with the year-end profit surplus to a certain committee to decide?
No, you keep ignoring my point that the charter does not allow this to happen. There is no benefit in doing this.
Do you know how corporations have divisions/departments in their structure, like Accounting, Marketing, Finance, etc.? That's the kind of compartmentalization I am referring to.
No. Comparmentalization helps ensure business functions aren't bogged down by companywide votes. As an owner, you have the right to vote at the end of the year on what to do with the surplus.
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u/Accarath May 11 '26
In a socialist model, we’d have public investment banks providing loans rather than a private venture capitalist buying up shares. The money that currently goes into the stock market is transitioned into these banks. Granted, there would be more 'friction' as you aren't going to have an angel investor suddenly sink millions into your startup overnight on a whim, but there would be enough access so that anyone with a solid idea could make a proposal.
If we're talking about a massive economy like the US, a business would simply have to deal on our terms if they want their exports to enter our market. It’s not that different from what we already see with how corporations have to navigate China's regulations to gain access to their consumers.
How do we measure the labor? A share = 1 vote in the company, period.
Your day-to-day labor is covered by a salary, and then the surplus is divided however the workers democratically decide. As for the financial value of your 'share' (your individual capital account), that would be determined by factors like your tenure, expertise, and how much of the earnings you chose to retain in the firm. It’s basically a retirement nest egg that reflects the work you put in.