Instigator / Pro
7
1518
rating
5
debates
60.0%
won
Topic

Would it improve or worsen the USA's economy to have most businesses worker-owned?

Status
Finished

All stages have been completed. The voting points distribution and the result are presented below.

Arguments points
3
0
Sources points
2
0
Spelling and grammar points
1
1
Conduct points
1
1

With 1 vote and 5 points ahead, the winner is ...

Cogent_Cognizer
Parameters
More details
Publication date
Last update date
Category
Economics
Time for argument
Three days
Voting system
Open voting
Voting period
Two weeks
Point system
Four points
Rating mode
Rated
Characters per argument
15,000
Contender / Con
2
1672
rating
283
debates
66.96%
won
Description
~ 4,955 / 5,000

The burden of proof is shared since both of us will be making a positive claim. I will argue an economy where the above should improve the American economy. Con will argue that, in such a situation, it will worsen it.

Definitions of terms I am proposing and that con accepts by accepting the debate:
Worker-owned company: A company in which the majority of common stocks, as opposed to preferred non-voting or common non-voting stocks, in the company are owned by the employees as a whole and they have some form of representation in major business decisions(with reasonable exceptions such as if a decision needs to be done quickly by a representative or president of the company).

Common, voting stocks: Stock options in a company in which risk is taken on the investment one has in the company but is typically very likely to change in price, they are also able to vote in certain business decisions normal stockholders would, such as voting for the board of directors and potential mergers.

Common, nonvoting stock: Same as the above, but with no voting powers in choosing the board of directors or mergers.

Preferred stock options: Often does not carry voting power(sometimes can, but given the other perks this gives, businesses do not often offer voting power with these) but does provide the buyer of these stocks with a much greater likelihood of a return than other normal stocks, since they are given a return at a higher priority than those with normal stock options. Often are not as volatile as common stock options, but can be again, depending on what the business is offering.

These definitions *should* be my own, but are definitely based on various definitions(too many to list probably) I've heard throughout my life.

For the definitions of "business", "economy" etc, we will use common definitions. The definitions of any other terms I will accept from my opponent automatically when presented in round 1 unless any are very unreasonable(i.e claiming "nice" means "a jerk" or something. We all know it doesn't). I would like to think I defined the above terms in a suitable way, though I recognize I may have left out or worded something improperly. If that's the case, my opponent should let me know IN THE COMMENTS, before accepting the debate so I may change the definitions if I agree with you that I somehow misrepresented these terms.

Since I think this debate will start off with me, I will just forego most of what round 1 is used for once someone has stated interest in accepting and there are no issue with what I've brought up. That said, here is the round structure:

Round 1: To be used for clearly stating you've read the rules and definitions in this debate. You may present definitions of terms you think will be important to present that I've not done so already. We will also clearly state our position, think of it as a thesis in a written paper. Our specific evidence and arguments, however, will be presented later. But you may (and should) state the contentions you plan on arguing, as one would do in a formal English paper's thesis. Leave it unsubstantiated for now though. The only thing I will do is state my thesis.

Round 2: We will offer opening arguments and attempt to refute the contentions our opponent listed in round 1 as well as start backing up our contentions in round one with evidence and logic. DO NOT specifically refute the logic, evidence, etc the other presents in this round: only the contentions/claims made in round 1. There should be some leniency, as it's possible for someone to refute a specific argument by coincidence(though it's doubtful it's a coincidence if someone refers to a specific article someone presents in this round). This will be up to voters to decide. The voters will award conduct points accordingly, as it would be a matter of conduct.

Round 3: Each of us will refute the specific logic and evidence the other brings up in round 2. We each can also still present new arguments and supporting evidence too.

Round 4: This round and round 5 are prohibited from presenting brand new positive claims supported by evidence or logic. This round is purely intended for refutation(negative arguments) of the positive claims one's opponent has made previously OR defending arguments you've yet to defend from your opponent's offensive on your points. If you feel you've done that already sufficiently, feel free to forego this round.

Round 5: Concluding remarks and closing statements. A proper closure would restate major points, point out why your points outweigh the opponent's, stuff like that. There should be no new arguments and no rebuttals. Rebuttal would be referring to presenting evidence/logic disproving what the opponent said. An argument, in this context, means to present logic/evidence in support of one's own proposition. Neither is allowed in this round. Only comparing and contrasting the pros and cons of each position is allowed.

Round 1
Pro
As stated in the rules for round 1, this will contain my "thesis":

Thesis:
Worker ownership would boost the US economy in the following ways: first, it would likely be followed by an increase in productivity and thus the GDP per capita of the nation, it would have an increase in consumption at the expense of investment, which I'll explain is needed and desired, and worker ownership would reduce the harm automation and shipping jobs overseas would do to the American worker.

Con
Outline of my case:

  1. Impractical to hold this as superior to a system where many citizens invest in corporations whether or not they happen to work for that corporation.
  2. Impractical and Immoral because insider trading is strongly prevented by clauses that ban you from investing in competition while also allowing workers to invest in the company's funds but banning them to pull out the shares due to any conceivable foreknowledge of an incoming slump based on their job title and the information that enabled them to access. Immoral would be in cases where this clause of the contract is removed to enable this to be a freer arrangement as it screws over a company for letting their workers own most of their shares/stocks.
  3. There is no way at all to think the US would truly compete with the rest of the world if it stopped very rich groups (hedge-fund groups like the Vanguard Group and Black Rock) because these 'Illuminati' elite completely have so much control over the economy of the world as a whole so they'd move out of the country and drive it into a state of being impoverished by pressurising companies to trade less and less with the US until it caved in. 
  4. The system is already a corrupt selfish system because it assumes the best advice will come from those with the most money to lose and gain, as opposed to any kind of honest and genuine motive to steer the company/corporation in the right direction. Therefore, there's no point appealing to morality or high emotive ideals in this debate.

Round 2
Pro
First, I am arguing my contentions with relevant evidence supporting my positions, and I will argue against the contentions my opponent proposed in round 1, as permitted by the rules for round 2.

C1: Worker ownership of businesses would likely be followed with an increase of the GDP per capita of our nation.
As my primary and most convincing forms of evidence, I am presenting two meta-analyses(studies which compiled numerous studies on the topic, analyzed them for bias, and determined what the net trend these studies are indicating). The first meta-analysis here found "a small, but positive and statistically significant relation to firm performance (r= 0.04)" and employee ownership. In particular, it found the difference more significant in "different sampling designs (samples assessing change in performance pre-employee–post-employee ownership adoption or samples on firms with employee ownership)". In other words, when a business transfers from private ownership by people at the top of the business hierarchy, to more-or-less equal ownership among those at the top and the lowest employees, the difference was greater in terms of how well the business performs. It should be self-evidence that increasing firm performance ought to increase the GDP per capita but to address any concerns that this isn't quite a variable indicative of productivity, this second meta-analysis looks at productivity more specifically.  This meta-analysis found that for three separate concepts related to employee ownership, namely, profit sharing, worker ownership, and worker participation, are all positively correlated with an increase in productivity. The one concept that is associated with employee ownership which found a negative correlation with productivity were codetermination laws, such as those proposed by Senator and 2020 presidential candidate Bernie Sanders, as reported by the Washington Post here. If anyone is unfamiliar what a codetermination law is, it is defined as a law requiring some level of employee representation in the Board of Directors, either they get to vote for a director or are on the board of directors themselves.  It's important to note the subtle difference this study makes, however. It is basically saying that when the state mandates employee representation on a board of directors, it coincides with less productivity. This is where I would concede to right-wingers that the state being involved often comes with less efficiency(I'm sure we are all aware of this talking point, and I can't disagree). However, the other three variables it looked at include voluntarily having the employees represented, which is found to be positively correlated with productivity. Since I'm not necessarily arguing the state ought to mandate employee representation, but rather the mere presence of it in general, this would be an irrelevant point to bring up. Indeed, as someone who is a libertarian, albeit left-wing libertarian, I'm as opposed to state involvement in this matter just as many right-wingers are.

C2: Worker ownership of businesses would probably be followed by an increase in consumption and a decrease in investment
This next contention I do not have as solidly backed-up by meta-analyses like the previous one(mainly because I don't think this topic is nearly as well-researched as the previous). However, I would say it is backed up in logic. If workers are more involved in the company's business decisions, they would also be more aware of what products are out there in the market. It should be self-evident that increasing awareness of products would increase the likelihood of them being bought. Additionally, one study found that employee ownership not only decreased the failure rate of
businesses,
but likely increases job and income security, the likelihood a person is to keep and maintain their job and decrease unemployment all around. These indicators would mean people would be less likely to go through a period of unemployment and thus a reduction of their yearly income. More income means more consumption or more saving in which case that's more lending from banks.

So, I'm going to refer back to that previous study and present a couple of others, this one and this one. The study presented in the above paragraph and the first one presented in this paragraph, both seem to indicate that failure among newly-created businesses is rather high, and the one in the above paragraph, indicates that employee-ownership seems to decrease that. The second study, a meta-analysis looks at what things tend to make new technology ventures succeed. One must wonder why anyone is researching that if it's not true that the failure rate is high? One must ask, why is it so high? Given the number of businesses that get started, it seems start-up capital may not be an issue. It wouldn't be too much of a stretch to suggest that investment is too high in that investors are investing so much that they invest in businesses bound to fail. Make sure to think of "investor" broadly to also include a business owner investing in their own business. I think we are all aware of the wealth distribution of the United States. Investors have far more wealth than anyone, and the primary thing they do is invest, while poor people primarily consume. A possible theory I suggest is that these businesses fail after some time because they can't find enough customers(aka, consumers), but so many businesses get started because they can easily find investment capital. While investment encourages more businesses to be created, I think it's self-evident it does little for whether that business will thrive and succeed. Obviously whether or not it has consumers is the primary factor on whether it does. So, why are so many businesses unable to find enough consumers? Why are the same ones easily able to get investment and can get started? The answer should be clear that consumers simply do not have enough money to consume as much that our level of investment demands. We need to have each reach equilibrium for a healthier economy, and as I've demonstrated, employee ownership would increase the income of consumers, and yes, likely decrease the income of investors, which is exactly what we need.

C4: Worker ownership would reduce the harm automation and shipping jobs overseas have on employees.
A rather interesting Forbes Article pointed out in 2014, that the employee-owned grocery store known as WinCo, has the average employee there being a millionaire. Many of these are simply grocery clerks. That should be rather impressive since I'm sure none of us think of grocery clerks when thinking about millionaires. Each of these employees owns stock in the company nearly automatically by simply being an employee, to the point 2/3 of the company minimum is owned by the employees themselves. Should Winco start automating, which like many grocery stores it does have self-checkouts now, it won't impact those employees since they still own a lot of money in savings from their stock-ownership plans. Should they be let-go, it could be said it's no skin off their nose, as they have a cushion in their savings to live off of for quite some time. That article is, of course, 5 years old and WinCo has only gotten bigger since then, and so would what the employees own.

Pre-rebuttals to opponents proposed contentions:

They said, it is...

Impractical to hold this as superior to a system where many citizens invest in corporations whether or not they happen to work for that corporation.
However, I wish to point out a very important distinction I made in the description of this debate, specifically the definitions. Under my definition for worker-owned business, outside investors would still be permitted. To maintain the spirit of worker cooperatives or worker-owned businesses, they do still offer investment plans to outside investors, as the whole purpose of "The original Community Investment: A guide to worker coop conversion investment", is to educate people on how to invest in worker-owned businesses like worker cooperatives, it's obviously possible. In order to maintain worker-owned and worker-controlled status, only the workers are often permitted voting stock. Outside investors may, instead, be given preferred, non-voting stock, as defined in my description above. Keep in mind, my definition for worker-owned businesses does not exclude the possibility for non-voting stock to go to non-workers.

So, before my opponent even presents evidence for this contention, the contention itself is irrelevant regardless of evidence supporting it, since people can still invest in worker co-ops, and worker-owned businesses in general, regardless of working for them. They just won't be given the same investment options as the workers there.


My opponent's second contention is:



Impractical and Immoral because insider trading is strongly prevented by clauses that ban you from investing in competition while also allowing workers to invest in the company's funds but banning them to pull out the shares due to any conceivable foreknowledge of an incoming slump based on their job title and the information that enabled them to access. Immoral would be in cases where this clause of the contract is removed to enable this to be a freer arrangement as it screws over a company for letting their workers own most of their shares/stocks.
It's a little early for me to argue fully against this, but if it is as true as my opponent is saying, it seems odd that such worker-owned companies already exist in the US. So if they really are breaking a law for merely existing due to these issues you're bringing up of insider-trading being inherent to them given the employees would know when the company would crash/not crash and owning stock, why are they allowed to exist? So, this is the question I pose. It's not as strong as pointing out the irrelevancy of the previous contention, but it does cast doubt that the wording of these laws my opponent may bring up actually supports what they concluded here. So, I implore you to share with us the specific law for your primary evidence.


There is no way at all to think the US would truly compete with the rest of the world if it stopped very rich groups (hedge-fund groups like the Vanguard Group and Black Rock) because these 'Illuminati' elite completely have so much control over the economy of the world as a whole so they'd move out of the country and drive it into a state of being impoverished by pressurising companies to trade less and less with the US until it caved in. 
Not going to lie, this sounds like a conspiracy theory. I won't further comment though, since this seems self-evidently making you live up to the latter half of your username. But, my interest is piqued, so I'm not going to pre-emptively strike this down. I want to see how you argue for this lol.

The system is already a corrupt selfish system because it assumes the best advice will come from those with the most money to lose and gain, as opposed to any kind of honest and genuine motive to steer the company/corporation in the right direction. Therefore, there's no point appealing to morality or high emotive ideals in this debate.
I agree, but I don't think this should be seen as a point for you, given that the topic is already implied to be looking at this from an economic perspective, so morality and appeal to emotion would be irrelevant. Just look at the debate title and my description which is hugely based off of financial and economic terms lol. Isn't it implied we aren't debating morality here? Also, doesn't this very same contention contradict with your first contention where, and quote, you said it's "Impractical and Immoral..."

Stick to only the practicality there, is my advice, otherwise you will be contradicting yourself here. Of course, I'll forgive you if this was an honest mistake, and voters, for me to be fair, I say you should give some leeway. So unless he continues to support both the position that morality arguments have "no point" while simultaneously arguing for a moral argument as posited in contention 1, then I say you may want to vote against my opponent. But, I'm understanding of one mistake, because I'm also prone to accidentally word things in contradictory ways too, and we're all human. They've been informed now though, so no excuse from here on out.
Con
Based on the debate structure and how strong my case is vs my opponents baseless claims, I firmly am certain that the correct play here is to post nothing further in my R2 than was in my R1.
Round 3
Pro
First, since there were two mistakes in my previous round, I will correct them now. C4 should have been "C3", so for now on out when I refer to "C3" it's referring to the mistakenly numbered "C4". Now, moving on to what my opponent said in the previous round:

Based on the debate structure and how strong my case is vs my opponents baseless claims, I firmly am certain that the correct play here is to post nothing further in my R2 than was in my R1.

I get the feeling I'm being trolled now, which is surprising given we have another debate that RationalMadman seemed to have taken seriously.

Well, since this round is meant to refute the specifics of the opponent's arguments or offer further evidence of our positions, I have no choice but to use this round with further supporting evidence, and since my opponent has decided to leave their claims in R1 unsubstantiated for now, this should be seen as a major setback. Hopefully, my opponent uses this Round, R3, for supporting evidence. They are allowed to do so still given the round structures I've outlined, and I'll wait for Round 4, where hopefully I'll have specific evidence from my opponent to refute. So, here are further supporting evidence of previous contentions I felt were not quite supported well enough in the previous round of mine. I think C1 is strongly enough backed, so I'll further support my other contentions.


C2: Revisited
Since C2 above was a little lacking in evidence, I'll provide another source, called Introduction to Worker Cooperatives and Their Role in the Changing Economy, where on page 381, it points out:


Social enterprises are gaining in popularity among consumers and in-vestors because they produce attractive products and services that also appeal to the values of consumers. This type of socially conscious business does not need to have an international focus; it can thrive and create change in our own backyards. Stable, wealth building employment opportunities are vital to help vulnerable workers and their communities.Worker cooperatives can play an important role in creating these jobs and rebuilding economically distressed localities
So, it points out how "social enterprises", which lists worker-owned businesses as such a social enterprise, claims they tend to appeal to values of consumers. Given this, it only seems natural that such a business model would encourage more consumption since they appeal to consumers' values more than other businesses. So, given this, and what I've stated in C2, it should all be pointing to one conclusion that worker co-ops increase consumption and possibly decrease investment. Furthermore, I argue that the latter has too much of it and the former does not have enough, thus worker-ownership would help us reach an economically-healthy equilibrium of Consumption and investment. 

Furthermore, this study entitled Do Broad‐based Employee Ownership, Profit Sharing and Stock Options Help the Best Firms Do Even Better? Points out that employees have a lower voluntary turnover rate when given ownership. I'd like to point out that doing this means an employee will not only be less likely to go through a period of no income, thus their annual income would increase, but staying at the same business longer would mean more chances to get a raise and promotion, which switching to a new company would reset the progress and rapport they've made with the managers of where they work. More income would assuredly mean they would consume (or save) more, likely a combination of both. 


C3: Revisted

This article titled Fear and Hope in an age of mass automation: debating the future of work, from 2018, argues that not only would it be helpful for the economy to have worker ownership as we move towards a society of complete automation, given that means everyone would still have an income, but that it is inevitable to happen. In order to avoid economic peril due to 1% of society owning all of the businesses, if all jobs were to become automated, then only 1% of society would still be getting an income, and the other 99% will have no means to consume. It would result in economic disaster and downturns as we move closer to closer to such a society. Thus, if all businesses were owned as a whole by workers or just anyone at all, it would alleviate this issue, and it's obviously required in order to maintain an economy.


I rest my second round of supporting evidence and hope that next round I'll have something of more substance from my opponent to refute.



Con
There is absolutely nothing in Pro's entire case that explains how you are going to compete with multi-billionaire hedgefunds or milionaire individuals who invest in companies. Are you going to make a law against them doing that? How on Earth would it benefit you to tell them to f*** off and invest elsewhere? Of course that will make all other countries rich, it's not a conspiracy theory.

  1. Bridgewater Associates LP: According to its website, this Westport, Connecticut-based firm with approximately 1400 employees manages$150 billion in global investments spread across institutional clients, central banks and governments, corporate funds, and pension funds. It has $87.1 billion in hedge fund management, making it the largest hedge fund management firm.
  2. J.P. Morgan Asset Management is a division of the larger JPMorgan Chase & Co. (JPM). Hedge fund management is a part of JPM Asset Management, along with management of other asset classes. JPMorgan Chase has $2.4 trillion in overall assets under management as of December 2013, of which, the hedge fund Asset Management has AUM of $59 billion.
- Seth, S. (2019). World's Top 10 Hedge Fund Firms. [online] Investopedia. Available at: https://www.investopedia.com/articles/personal-finance/011515/worlds-top-10-hedge-fund-firms.asp [Accessed 12 Aug. 2019].

This is not a conspiracy theory, they are major contributors to many companies, which company can you possibly look at that isn't going to go bankrupt if only its workers funded it? Yeah, only tiny ones, my evidence is lack of any opposing evidence. I don't even know what to tell you, it literally won't work. What exactly is in it for the workers anyway? I already told you, corporations don't allow you to pull out investment as a worker in the company, they say that's insider trading. You need to quit most companies to be able to pull out your shares. The only time they won't sue you for pulling out shares is if you pull it out when it's wrong to do so (when you know the company is about to have an upswing or maintain itself at the very least). If you pull out shares when it's optimal to do so (when the company is about to lose value in stock) you then will be prosecuted by your own company for insider trading (on your own behalf).

In short, insider trading happens when someone makes a trade of stock based on information that is not available to the general public.

To be accused of insider trading, you must usually be someone who has a fiduciary duty to another person, institution, corporation, partnership, firm, or entity. You can get in trouble of you make an investment decision based upon information related to that fiduciary duty that is not available to everyone else. This insider information allows a person to profit in some cases, and avoid loss in others (in the Martha Stewart/ImClone scandal, the latter happened to be the case).

Insider trading can also arise in cases where no fiduciary duty is present but another crime has been committed, such as corporate espionage. For example, an organized crime ring that infiltrated certain financial or legal institutions to systematically gain access to and exploit non-public information (perhaps through the use of computer viruses or recording devices) might be found guilty of insider trading among other charges for the related crimes.
- Kennon, J. (2019). What Is Insider Trading and Why Is It Illegal?. [online] The Balance. Available at: https://www.thebalance.com/what-is-insider-trading-and-why-is-it-illegal-356337 [Accessed 12 Aug. 2019].
Round 4
Pro
Apologies to my opponent for suggesting that contention sounded like a conspiracy theory. The way it was worded soundedr ather conspiracy-like, given you literally used the word "Illuminati" and other word choices to support that. I see what you're arguing now, and it's clearer to me. I may have made the mistake of misinterpreting that contention, but it would have been clearer without the use of such terms.

I'll address this argument that's more well-said now.

My opponent has argued that essentially these businesses I'm suggesting would have a hard time competing with the millionaire investors.

First, I want to point out that this is irrelevant. Whether or not such an economy where worker-owned businesses pre-dominate would be feasible is not what is up for debate here. Rather, assuming we got to such an economy, we're arguing over whether it's good or
bad  for the economy. Given many context clues provided in the description, and the fact it's specific to improving the US economy, this ought to have been clear, no?

At any rate, we are not telling these people to go invest elsewhere if the economy was worker-owned. As I had pointed out in my Pre-rebuttals in round 2, there are actually plenty of investment options for people who work outside of the company. Those hedgefund companies will be allowed to invest in a worker-owned economy if they so desire. 

I personally believe this entire round is actually a strawman argument, and I'm asserting it as such for the following reasons:
I never stated anywhere that people would be disallowed from investing in these worker-owned businesses, and on the contrary, I provided a source in that aforementioned round 2 of my pre-rebuttals showing just how outsiders can invest in those businesses. So, my opponent is attacking a position that not only did I not
present, but one in which I proved false ahead of time. This seems worse than a strawman come to think of it. 



As for this argument about insider trading, my opponent does not sufficiently address the issue. They are claiming it's a matter of
legality but didn't provide a legal source as I asked, such as the exact wording of the law in question. Given what I said already in round 2...

It's a little early for me to argue fully against this, but if it is as true as my opponent is saying, it seems odd that such worker-owned companies already exist in the US. So if they really are breaking a law for merely existing due to these issues you're bringing up of insider-trading being inherent to them given the employees would know when the company would crash/not crash and owning stock, why are they allowed to exist? So, this is the question I pose. It's not as strong as pointing out the irrelevancy of the previous contention, but it does cast doubt that the wording of these laws my opponent may bring up actually supports what they concluded here. So, I implore you to share with us the specific law for your primary evidence.


A source like "The Balance" isn't going to do the actual law against insider trading justice, considering they're simplifying and summarizing it. Given the US is completely permissive of those worker co-ops existing, I'm going to just dismiss your claim here since it seems logical to conclude there is likely some exception in the law since worker co-ops already exist and are allowed to exist by the state despite this law against insider trading.
Con
Outsider cannot invest past 50% ownership of the shares. You'd have to have around 70% ownership by the workers to call it worker-owned. It is impractical and outrageous to assume this would benefit the economy because not only are you driving away massive investment firms to other countries, you're also making the workers trapped in investments they can't pull out of to pressure the company to change.
Round 5
Pro
Both due to that I am not really in a condition to think much over this, and that my opponent didn't say much last round, I will say less this round.

I just wish to emphasize that many of the things my opponent had brought up weren't quite as true given how I pointed out that for the ownership aspect of the businesses, many of those worker co-ops and employee-owned businesses only require the voting stock be owned primarily by the employees. I pointed this out in C4 of round 2 of course. Any arguments concerning morality and such were irrelevant to the debate, as I pointed out in my response to my opponent's fourth contention. I believe, as should voters, that many of these arguments presented by my opponent did not hold water enough to be concerning. 

Though I am critical of my opponent's arguments, I, of course, mean no offense, and I enjoyed this debate with them. May we debate again.

Con
I have won if the voters think well.