Social medium as dictatorship [LWN.net]

Social medium as dictatorship

Posted Jan 15, 2025 22:54 UTC (Wed) by kleptog (subscriber, #1183)
In reply to: Social medium as dictatorship by raven667
Parent article: The people should own the town square (Mastodon Blog)

> Maybe there is a generalized principal here, that companies should be supervised by a board made not only of stockholders but also workers Union and customer/user representatives,

This is known as a Works Council and exists in various forms in Europe, with more powerful versions present in e.g. Germany and the Netherlands. Representatives elected by the employees have co-decision rights on significant changes to the business and working conditions. The direct negotiation between employees and management for example helps reduce the required detail needed in things like OH&S regulations, because employers and employees can negotiate the specific trade-offs for individual businesses, rather than for whole sectors like unions tend to.

Customer representatives is less common, usually done by consumer organisations.

Management from English speaking countries like the UK and the US are regularly shocked by the idea that employees can actually block stupid management decisions. Works Councils suing the management of their own company is actually a thing, though fairly uncommon. The company is then paying legal costs for both sides in that case.

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Social medium as dictatorship

Posted Jan 15, 2025 23:42 UTC (Wed) by linuxrocks123 (subscriber, #34648) [Link] (10 responses)

Yes, Europe has this, and has had it for decades! As you might expect, US economists were morbidly excited to look at that, in the same way that a railroad engineer might be interested to look at a train collision in slow motion.

Here's one paper looking at the train collision in detail: https://www.nber.org/system/files/working_papers/w7945/w7...

TLDR: "Averaged over the five years we analyzed, codetermination reduces market-to-book value by 27% and return on assets by 5 basis points. ... codetermination reduces the return on equity on average by 2 basis points."

It turns out that, rather than block "stupid management decisions", workers block things like restructurings and layoffs, preventing the firm from increasing its efficiency and causing unproductive dead wood employees to hang around after a US firm would have axed them. We call this effect "Eurosclerosis" in the US.

Stuff like this is why we've seen articles like this just about every year for the past 40 years: https://www.fitchratings.com/research/sovereigns/us-europ...

Social medium as dictatorship

Posted Jan 16, 2025 0:05 UTC (Thu) by Cyberax (✭ supporter ✭, #52523) [Link]

On the other hand, the upside is that life in Europe is more comfortable overall, not in the least because large-scale profit extraction (like the ISPs in the US) is harder.

Social medium as dictatorship

Posted Jan 16, 2025 1:30 UTC (Thu) by bluca (subscriber, #118303) [Link]

Wait, the priests of the capitalism death cult publish articles every year saying how terrible it is that workers have rights?! No way. Say it ain't true!

Social medium as dictatorship

Posted Jan 16, 2025 2:52 UTC (Thu) by dskoll (subscriber, #1630) [Link] (2 responses)

Sure. In the US, the only mandate for corporations is to maximize profit without breaking the law. If slavery were legal, then they would use indentured workers. As it is, once companies reach a certain size, they buy lawmakers so they can change the laws to benefit themselves.

It might be time to optimize for general well-being instead of maximal profit. Although Europe may be less "rich" in some sense than the United States, most European countries are well ahead of the United States when it comes to happiness.

Social medium as dictatorship

Posted Jan 16, 2025 5:28 UTC (Thu) by marcH (subscriber, #57642) [Link] (1 responses)

> If slavery were legal, then they would use indentured workers

This sounds extreme and funny but it's not really. Anywhere in the world, the main purpose of a company is to make as much money as it is legally possible. So of course companies will by design try to get as close as possible to the limits and will constantly adjust. It is that simple.

So even the US has laws and regulations: slavery, child labour, ... minimum wage even in some places! Yes it has far fewer than Europe and yes that makes US corporations more profitable - at some expense for workers, environment, healthcare, life expectancy, education, etc. The cursors are just moved further on the right, that's all. But "cursors" and numbers make neither a good story nor a good fight in the comments section; for that you need things even more simplistic and binary than a cursor; you need good guys and bad guys, breaking news and news, etc.

Social medium as dictatorship

Posted Jan 16, 2025 5:37 UTC (Thu) by marcH (subscriber, #57642) [Link]

> at some expense for workers, environment, healthcare, life expectancy, education, etc. The cursors are just moved further on the right, that's all.

Forgot the most important consequence sorry: _inequalities_. Rich people in the US are much better than rich people in Europe while poor people in the US die much younger than poor people in Europe. This is by design and what most people want; not an accident at all.

Social medium as dictatorship

Posted Jan 16, 2025 6:40 UTC (Thu) by DimeCadmium (subscriber, #157243) [Link]

Oh no, how terrible! Workers block layoffs! However shall the rich eat cake then?

Social medium as dictatorship

Posted Jan 16, 2025 10:28 UTC (Thu) by malmedal (subscriber, #56172) [Link]

> Here's one paper looking at the train collision in detail: https://www.nber.org/system/files/working_papers/w7945/w7...

> TLDR: "Averaged over the five years we analyzed, codetermination reduces market-to-book value by 27% and return on assets by 5 basis points. ... codetermination reduces the return on equity on average by 2 basis points."

That paper is about Germany and from the year 2000.

This one is from 2021 and talks about more countries: https://www.nber.org/papers/w28921 it finds "The available micro evidence points to zero or small positive effects of codetermination on worker and firm outcomes, and leaves room for moderate positive effects on productivity, wages, and job stability."

Works Councils in action

Posted Jan 16, 2025 12:59 UTC (Thu) by kleptog (subscriber, #1183) [Link] (2 responses)

The main lesson I learned from 9 years on a Works Council is that management often has no idea what they're doing.

Basically, the only question we ever needed to ask is: what is the estimated impact of this decision? The conversation usually went as follows:

Management: We'd like to restructure/fire a bunch of people/get rid of some employee benefits to save money.

Works Council: that's interesting, do you have any kind of figures or modelling to back that up? Because our back-of-the-envelope calculations show that this will reduce productivity/cause our best people to leave/make communications between teams more complicated. You're not actually tackling any of the underlying issues in this company. You have a bunch of smart people who you can ask to figure out the impact, if it's a good idea they'll tell you and be able to write an A4 showing why.

Management: <whine>Why are you asking all these complicated questions?</whine>

Management: Umm, forget the previous request, we've spent a little more time looking and found some structural issues which we can improve which will make everyone more happy.

Works Council: that's more like it.

The main problem being that management churns pretty quickly, and every new manager needs to learn this afresh. While the Works Council often has decades of company experience under its belt. I especially liked when we could ask "Why are you restructuring the company back to the way it was 5 years ago? What changed?" and management gives you a deer-in-the-headlights look.

Works Councils in action

Posted Jan 16, 2025 15:42 UTC (Thu) by Wol (subscriber, #4433) [Link]

Bit different, but having (in my current position) been "promoted" from shop floor to head office I have to agree.

We have our customers set ambitious sales targets, which we are expected to plan for, and when they miss their figures (which they invariably do) we have ask "why did you make us waste our time/money planning for unbelievable targets?".

I make a point of going back to the coal face (I spend more time physically, if not job wise, with my shop floor colleagues than my head office colleagues) precisely to keep myself grounded in what's ACTUALLY happening.

One of my biggest frustrations is head office staff with no clue about reality, who love creating perfect plans and - when it all goes pear-shaped as it inevitably does - guess who finds themself screaming frustration and saying to the planners "why couldn't you see disaster coming!?!?". Case in point - this last Tuesday blew up and I've been screaming "We need to fix today and tomorrow before it happens again". So the reply comes back "We can't - it would break our lovely plans" and they wonder why nothing works when reality breaks their plans ...

So yes. We have far too many stupid grads coming into the head office work space with plenty of ideas about how things SHOULD work. Great! Sometimes they're damn good ideas! But all too often they're based on a mole's-eye view of their cubicle, not an eagle's-eye view of the shop floor.

It's amazing the amount of experience there is on our shop floor - often people there are far better qualified than managers, with much more experience. If only we could persuade them to USE that experience, rather than throw it away for a quiet life.

Cheers,
Wol

Works Councils in action

Posted Jan 16, 2025 15:46 UTC (Thu) by lunaryorn (guest, #111088) [Link]

Pretty much my experience as well. More often than not the works council saves the company from its own mistakes. Sometimes, the amount of incompetence at management level is downright shocking.