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The Feudal Model of Corporate Organization

Submitted by kmeisthax on Sun, 11/25/2012 - 00:20 in Rants

If I am ever put into a management position at a large corporation or institution, I am going to demand the proper title to go alongside it. And I don't mean pithy titles like "Vice President" or "Manager", or even some of that weird "Team Leader" whitewashing that Target loves to do. I demand titles like "Lord", "Duke", or "Baron"; as they are the only titles majestic enough to fit the supreme power and control that a feudal office possesses.

The fact is that for all the pomp and circumstance about freedom that the US trots out at an almost sickening pace, there's still a fedual hierarchy underlying all of the world's corporate production structures. All we've done is change the names around. Instead of "Lord" we have "Boss", or instead of "Boss" we have "Manager", or instead of "Manager" we have "Team Leader" if you happen to be educated in the Target School of Euphemistic Language.

Part of this is a consequence of capitalism in and of itself. Unless you self-fund your business you're going to need a bank loan or venture capital. Banks will only loan out so much, and business plans that won't work as a small business are going to wind up sucking from the venture capital trough. Venture capitalists take lots of risks and in turn demand lots of reward. Due to their financial structure, they really only make a profit if you're able to produce a successful IPO, which is basically selling control of the company to other companies.

So there's a structure that's been forced upon corporations by the investment process. The only major change going on is occuring as entrepreneurs have started to realize just how catastrophically bad shareholders are at managing businesses with long-term goals. But even then, the innovation is mainly to centralize power further. The founders of Google limited the total percentage of stock the Google IPO sold so that the shareholders wouldn't have as much of a say in the company. Mark Zuckerberg organized Facebook in a similar fashion, and even gloated about it in the IPO prospectus.

I can understand why you would want to do this. Going back to the feudal analogy, a lot of companies have problems where their Lords, Dukes, and Barons are more concerned about the well-being of their individual fiefdoms rather than the well-being of the whole kingdom. But I don't think the solution is autocracy. Yes, sure, Pharoah Bezos or Czar Jobs probably manages/managed better than the herd of infighting daimyo that characterizes most of the stodgy Japanese companies like Sony or Nintendo. But at the end of the day you either have a slavedriving self-styled artist shouting at your face, or passive-aggressive social pressure to die from overwork. At the end of the day, you still have economic production structures which more resemble 12th century Europe than the kind of advanced modern democracy that our country should be.

What I'm looking for is a structure of economic production where autonomy and democracy are built-in. I look at it this way: we have a country which is ostensibly a democracy but inside it's economically feudalistic. We need to move away from economic feudalism.

Now, before someone decides to shout "HEY ISN'T THAT SOCIALISM" and give me a whole litany of reasons why 12th century Europe was somehow a good idea, curiously printed on Ludwig von Mises Institute letterhead made out of recycled Ron Paul Survival Report newsletters, perhaps we should back up a little bit. Yes, the core conceit of socialism is that workers should be in control of their own production structures. But I should at least note here that most of the third-world countries that adopted "socialism" and "communism" generally weren't in it for the freedom. The revolutionary movements which adopted these terms, for whatever reason (percieved fear of internal enemies, really just being into it for the power) decided to create some of the most brutal autocratic regimes on the planet; and when they de-Stalinized (or de-Maoized, etc), wound up somehow forming an economic system more characteristic of feudalism than even modern industrial capitalism is.

So perhaps I should stress that we shouldn't call it "socialism", because the word "socialism" has shifted to mean state-monopoly capitalism. What I want is "industrial democracy" - we're going to democratize industry in the same way liberalism democratized the state. I'm not going to discount unions as an instrument of democratization, but so far they're an expired tactic. They're a known entity; and they're really not a stable democratization tactic. One of the most insidious things about industrial feudalism is that it's extremely good at controlling ostensibly democratic states. They have the means to purchase or butter-up favorable politicians to pass the laws they want. If that means making it harder to establish unions, or making the penalties for breaking labor relations law ineffective, then they can do that.

I'm more favorable to the co-operative as a model for industrial democratization because it's much harder to justify destroying it through the political system. A co-operative is basically a worker-own and managed business. You establish a business like normal but it's organized through by-laws or what have you in such a way that every worker is an equal owner and participant in the business. It's also very foolproof; you aren't going to see much in the way of "co-op busting" in the same way we have "union busting" becauseĀ it's really just creative use of incorporation and contract law to establish a democratic industrial entity. To make it harder for co-operative management or ownership to occur would require some rather massive changes to the ways incorporation and contract law work, in such a way that it would hurt them (the feudal High Kings of industry) more than us (the sans-culottes of industry).

The main stumbling blocks are the same as normal entrepreneurship: getting capital, finding customers, and so on. It won't be easy, and there might be many industries where unionization and strikes may be more effective, at least short-term, than forming industrial co-operatives. There are also some radical unions like the IWW which want to do both. But I think long term we need co-operatives.

I'm also interested in a related idea: buying up old, failing businesses and reviving them as democratic entities. Granted, none of us have the capital to do it alone, but we have croudsourcing now which can be used to raise funds for such things. It's like when NaN Software collapsed, back when Blender was a dodgy shareware 3D package. The people who used the software croudfunded a 100,000 euro goal, bought the copyright to the software from NaN's creditors, and turned it into a Free Software project which is now developed by the community. Now, Blender is probably the best 3D software around, and it's not proprietary software.

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