ESOP Has No Pop, WSDE Means We Run the Company

Feb. 17. Tomas Edsall wrote a piece in the NYT about what is now an old idea on how to reduce inequality and get workers more enthusiastic in the companies they work for, ESOP, an Employee Stock Ownership Plan. It’s been a law for 50 years giving companies tax breaks if they formally give their workers stock in the company. Some 12,000 companies do so.

Ronald Reagan loved the idea. It’s supposed to make workers love the company and become more “productive”. Supposedly it makes every man(/woman) a capitalist, and is a “win/win” situation.

Sorry, just because you own some stock you’re not a capitalist. You’d have to make most of your living taking advantage of workers to be in that class. You wouldn’t say that Bob Cratchit was a capitalist just because Scrooge used some of the company profits to give Cratchit a goose on Christmas.

An ESOP may give you back a little bit of the money the boss has gouged out of you, but that’s it. You’re not the partial boss of an ESOP. They have rules that keep you out of the running of the company. That’s for “professionals”. As Robert Shaffer of Appalachia said in his comment posted to Edsall’s article, “ESOP participants do not have any say when the company decides to move its operations out of this country. They may not even tell you until the day it happens. Been there, done that, have the T-shirt.”

Usually you’re a shareholder and can vote at the yearly company meeting. So you and your mates all together have a thousand shares out of a gazillion. Even in cases where the workers have all the shares their power is usually limited to picking which professional to hire as company director. Big deal. The ESOP’s even have very strict rules about when you can sell the stock you were given. You may not be able to sell before you retire. Some just call ESOP’s a retirement plan where you own stock in the company that employs you.

As Richard Wolff (“Capitalism Hits the Fan”) pointed out “owners” of the ESOP’s don’t take part in the key decisions like what things to make, what machines and chemicals to use in the work process (and expose the workforce to), or even what to do with profits.

Wolff calls for something very different, companies run by the workers, WSDE’s which stands for Worker Self-Directed Enterprises where “workers take an active role in the directorial decisions: what, how, and where to produce and what to do with net revenues”. For instance part of your workweek would be a meeting where you discuss and vote on what the company should do and how to do it.

Wolff who is a retired professor of economics from the University of Massachusetts has a group that writes about it called Democracy at Work The site is here: Note it’s .info, not .org.

The Radical Ideas of Huey Long

The original ESOP law was created by Senator Russell Long of Louisiana. He father was Huey Long, a very controversial figure who was governor and Senator until he was assassinated in 1935. By chance I saw “All the Kings Men” a movie that supposedly was based on his life last week. The movie was the Academy Award for “Best Picture” in 1949. The film was really a travesty. It makes the “Huey Long figure” a politician who goes power mad once he gets a taste of office and kills people who get in his way.

The real Huey Long was much more interesting. He came to office at the height of the Great Depression and criticized Franklin Delano Roosevelt from the Left. His speeches pummeled the rich and the greedy. Long started a movement he called “Share Our Wealth”. He came up with the slogan “Every Man a King”. His plan “would have eliminated personal fortunes in excess of $5 million, provided every family with $5,000 with which to buy a house, car, and radio, provided for old-age pensions, minimum annual incomes, veterans bonuses, and government-paid college educations. “ He did a lot of good for Louisiana, with a lot of public construction, building road and bridges in a state where most roads were dirt. He was hated by Standard Oil and the other oil companies who tried to get him removed from office.

There’s a website about him here.

He was called a “fascist” and indeed worked with Father Coughlin and Gerald Smith who were anti-Semites (though in my brief reading I can’t find evidence that Long was infected with that form of insanity). His was the “boss” and in terms of power was governor of Louisiana even after he left the post and became Senator, but Wikipedia doesn’t say he killed anyone to get his way.

I suspect a lot of the attacks against Long were slander by another boss “FDR” and the portion of the Left that kissed Roosevelt’s garments. Sinclair Lewis wrote the famous “It Can’t Happen Here” supposedly to destroy Long’s chances in the presidential election of 1936.

Huey’s son, Russell Long, was a pale imitation, very pro-business, mostly known for making changes in the tax laws, like the ESOP “every man a capitalist” plan discussed above.

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