There are many advantages to having employees own shares in a company. However, I would add that it depends on the industry, type of company and other circumstances.
These are factors that play a role and should add to a more nuanced discussion:
- Ownership also implies responsibilities and risk. There might be capital risks or surety needed for certain industries. Not all people want this in their lives.
- For any chance of high reward, there is a also a risk of failure/loss. This side is often forgotten and a one-sided view of ownership is often romanticised.
- Thus I think a popular discussion of this topic needs to be infused with a more realistic view of reality.
As a business owner of a small growing business, I don’t want employees who aren’t invested in the company. I think we use that same rubric in startups. How is this any different?
Not everyone wants to have a substantial chunk of their net worth tied in one illiquid undiversified chunk that's highly correlated to how well their job is going.
What capital risks? Private equity many times purchases a company, loads it up with debt, strips it off assets, pay themselves fat dividends and then walks away when it all falls apart.
You are essentially saying that the roughnecks that work the rig for $30-40 an hour should be owning it. They don't have the capital to own it and pay for the oil rights to use it, or the risk tolerance that it will sit idle and still have to be maintained, stored in a rented warehouse, and guarded when regulation does not allow them to be used. Nor is there any evidence they would be able to successfully run an oil company even if they were given it for free -- compliance issues surrounding commodities deals typically require a different skillset than the guy working the rig.
The vast majority of businesses are not software. Virtually all industry has capital outlay requirements and capital risks equal to or greater to this.
This has been debated for 100s of years and the era of funny money that is created at the stroke of a key i don't see how we can maintain the view that it should be so skewed towards capital.
Shifting away from using capital as the basis for resources allocation has been tried repeatedly and failed catastrophically every time. There's no mechanism than the market better to optimize the problems of supply, demand, and logistics.
However, something should definitely be done about funny money printers. There are plenty of mechanisms in history shown to be successful dealing with them, such as going to where they live and taking care of them in the dead of night. I agree that massive inflation is a serious problem, but the solution is not to say "let's get rid of the utility of money!" -- it is to punish the people subverting market utility for their own gain.
Trying to change reality because a small group of bad actors is absurd. Just get rid of the bad actors.
These are factors that play a role and should add to a more nuanced discussion: - Ownership also implies responsibilities and risk. There might be capital risks or surety needed for certain industries. Not all people want this in their lives. - For any chance of high reward, there is a also a risk of failure/loss. This side is often forgotten and a one-sided view of ownership is often romanticised. - Thus I think a popular discussion of this topic needs to be infused with a more realistic view of reality.