If you and your friends start a business everyone pays their part to launch it, just like any other business, the difference is that the workers own the business so they split the profits and decide how it’s ran.
Look into workers cooperatives, you might have people who provided the funds to launch it, but after a while the business is supposed to be able to refund them if they ask for the money back. Otherwise it’s like any other business, revenues are used to pay what’s necessary for the business to run.
Would the worker pay to operate the business? Essentially yes*, the non-wage operating cost of a business could be withheld from the workers’ wages to pay for things like the electric bill of the building they work in. This is because the workers of the companies who provide that electricity also have a right to what their labor provides. The other possibility is that the government would pay for these costs through taxes (which is indirectly paid for by the population, of course).
Just because a business is worker-owned doesn’t mean that every dollar of revenue is distributed to its workers. All companies would operate more like a union or non-profit company where they are limited in the amount of money they can stockpile, but how that money is raised and spent would be determined by the workers or (more likely) leadership that the workers elect to run the company.
*According to Marx, end-stage communism wouldn’t have a need for fiat money and the transition to that state is some form of socialism. Marxists have different ideas for what a government and economy look like in these various stages and how the transition between them happens. Because it’s easier to imagine and explain an economy similar to what we currently have, this hypothetical assumes an economy with some form of socialism that uses fiat money, businesses that compete with each other, and the government is some kind of representative democracy.
Okay, so another question. Where does the initial capital and idea come from to create the business? Also, take someone who pours all his money and leverages himself to near bankruptcy to create a business to make a future and a return on that investment in that business. What happens there?
Great questions. There wouldn’t be an investor class or stock market under socialism, as only the workers would have equal ownership of their business, so you are correct to question how the initial capital could be raised. I can think of a few ways. (1) In the case where you are dissatisfied with how your current workplace operates, but the majority of your coworkers vote/prefer the way it is, you could convince enough workers in the minority to split from the existing business and pool part of everyone’s savings to create a new business. (2) An individual or group could request a loan from a credit union (essentially a community bank). Remember, banks wouldn’t be for-profit, but they can still hold/lend money and collect interest on that lent money. (3) Apply for a government grant or loan. A bank or government may choose not to fund your start-up, in which case, you would have to start and grow from just your savings likely without any coworkers at the beginning. Once/if you grow your small business such that it has some government-decided amount of workers (say 10 or so, as an example), you would be required to divide ownership among all those workers and they may vote for different leadership. I.e. even though you founded the business, you don’t have a right to its leadership after it grows to a certain size.
This fundraising wouldn’t be too different than how it is today; the only major difference is that you couldn’t sell “stake” in your company to an investor or investment company for the promise of rewarding them future earnings.
Ideally, taxes (especially from highly successful businesses) would pay for a universal basic income (UBI) that is above the poverty line, so no one would be truly bankrupt. So in the situation where a business fails to get off the ground leaving the entrepreneur in debt, income from their future jobs or UBI would be garnished to payback the debts.
In the case where an already established business fails, as Evolith mentioned, it’s not too different than how it already is; that business’s assets could be bought by another company or repossessed by any debtors. The difference is that debtors under socialism can’t be investment companies or equity firms, so the repossessed assets would be to recoup the losses of your community’s credit union or the government, rather than sold to stuff the pockets of capitalists. That’s not to say that there can’t be corruption under socialism, look at the Soviet Union; it’s just that there is more likely to be oversight and regulation in collectivist, worker-owned communities.
Like any startup business owner, they either close up and stay bankrupt or eventually get bought out by a large corporation for a single check.
This is different: A group effort with earnings divided amongst the group members instead of predominantly going into the pockets of the greediest facilitator.
Do you want your small business support to finally support the workers and not just the one who thinks that they own their time?
That’s actually more complicated of a question. I’m personally of the position that businesses should have a path towards transferring ownership to the employees set from the start, something like a portion of union dues going towards purchasing stock at a pre set price
Others are answering theoretically but these companies already exist. You can Google employee owned companies or if in the US I believe ESOPs are the most common. That can probably answer most of your questions. Personally I don’t think I’d ever work for a company that isn’t employee owned, it’s amazing.
I can answer this one with some confidence. Yes, people are still paid for their work.
What? My question isn’t if I’d be paid for my work. My question is, how does the overhead get paid? Is it equal among all people? How does it work?
Do you think the board pays the overhead?
If you and your friends start a business everyone pays their part to launch it, just like any other business, the difference is that the workers own the business so they split the profits and decide how it’s ran.
Look into workers cooperatives, you might have people who provided the funds to launch it, but after a while the business is supposed to be able to refund them if they ask for the money back. Otherwise it’s like any other business, revenues are used to pay what’s necessary for the business to run.
Would the worker pay to operate the business? Essentially yes*, the non-wage operating cost of a business could be withheld from the workers’ wages to pay for things like the electric bill of the building they work in. This is because the workers of the companies who provide that electricity also have a right to what their labor provides. The other possibility is that the government would pay for these costs through taxes (which is indirectly paid for by the population, of course).
Just because a business is worker-owned doesn’t mean that every dollar of revenue is distributed to its workers. All companies would operate more like a union or non-profit company where they are limited in the amount of money they can stockpile, but how that money is raised and spent would be determined by the workers or (more likely) leadership that the workers elect to run the company.
*According to Marx, end-stage communism wouldn’t have a need for fiat money and the transition to that state is some form of socialism. Marxists have different ideas for what a government and economy look like in these various stages and how the transition between them happens. Because it’s easier to imagine and explain an economy similar to what we currently have, this hypothetical assumes an economy with some form of socialism that uses fiat money, businesses that compete with each other, and the government is some kind of representative democracy.
Okay, so another question. Where does the initial capital and idea come from to create the business? Also, take someone who pours all his money and leverages himself to near bankruptcy to create a business to make a future and a return on that investment in that business. What happens there?
Great questions. There wouldn’t be an investor class or stock market under socialism, as only the workers would have equal ownership of their business, so you are correct to question how the initial capital could be raised. I can think of a few ways. (1) In the case where you are dissatisfied with how your current workplace operates, but the majority of your coworkers vote/prefer the way it is, you could convince enough workers in the minority to split from the existing business and pool part of everyone’s savings to create a new business. (2) An individual or group could request a loan from a credit union (essentially a community bank). Remember, banks wouldn’t be for-profit, but they can still hold/lend money and collect interest on that lent money. (3) Apply for a government grant or loan. A bank or government may choose not to fund your start-up, in which case, you would have to start and grow from just your savings likely without any coworkers at the beginning. Once/if you grow your small business such that it has some government-decided amount of workers (say 10 or so, as an example), you would be required to divide ownership among all those workers and they may vote for different leadership. I.e. even though you founded the business, you don’t have a right to its leadership after it grows to a certain size.
This fundraising wouldn’t be too different than how it is today; the only major difference is that you couldn’t sell “stake” in your company to an investor or investment company for the promise of rewarding them future earnings.
Ideally, taxes (especially from highly successful businesses) would pay for a universal basic income (UBI) that is above the poverty line, so no one would be truly bankrupt. So in the situation where a business fails to get off the ground leaving the entrepreneur in debt, income from their future jobs or UBI would be garnished to payback the debts.
In the case where an already established business fails, as Evolith mentioned, it’s not too different than how it already is; that business’s assets could be bought by another company or repossessed by any debtors. The difference is that debtors under socialism can’t be investment companies or equity firms, so the repossessed assets would be to recoup the losses of your community’s credit union or the government, rather than sold to stuff the pockets of capitalists. That’s not to say that there can’t be corruption under socialism, look at the Soviet Union; it’s just that there is more likely to be oversight and regulation in collectivist, worker-owned communities.
Like any startup business owner, they either close up and stay bankrupt or eventually get bought out by a large corporation for a single check.
This is different: A group effort with earnings divided amongst the group members instead of predominantly going into the pockets of the greediest facilitator.
Do you want your small business support to finally support the workers and not just the one who thinks that they own their time?
That’s actually more complicated of a question. I’m personally of the position that businesses should have a path towards transferring ownership to the employees set from the start, something like a portion of union dues going towards purchasing stock at a pre set price
Others are answering theoretically but these companies already exist. You can Google employee owned companies or if in the US I believe ESOPs are the most common. That can probably answer most of your questions. Personally I don’t think I’d ever work for a company that isn’t employee owned, it’s amazing.