WI Wage-Earner Funds Were Commonplace?

WI Wage-Earner Funds became commonplace?

The basis idea of the proposal as put forward in Sweden in the 1970's, was for a surcharge (10% I believe) of corporation profits would be set aside by the employer and given to employees on condition of it being used to purchase shares in the corporation. Over a very long period of time, the idea was to have business pay to have themselves taken over by their employees. One of the key points which was said in favour of this policy was that it would enable the 'crisis of social democracy' that was affecting Sweden (and the West more broadly) in the 1970's, as by transfering ownership of firms to their employees it would eliminate the natural competing interests of shareholder versus employees.


Whilst thes funds were to some extent implemented in the 1970's and 80's in Sweden, they eventually folded due to strident business opposition.
What makes me interested in this is that in many ways it appears like it could work. Unlike the Alternative Economic Strategy of the Bennite Left of the British Labour Party, which relied on over-regulation and even doses of outmoded nationalisation (with all the inefficiency that entails), wage-earner funds would seem to enable economic democracy with market discipline.

So how would society be different if Wage-Earner funds had been implemented (and I mean outside Sweden, in places like the USA and the UK).
 
Löntagarfonder är ett jävla skit
men nu har vi baxat dom ända hit.
- Kjell Olof Feldt

I'm going to read the Timbro rapport and point out that Timbro is for the lack of a better term a rightish think-tank with the power to put everybody at the left in a hissy fit.
www.timbro.se/bokhandel/pdf/9175665913.pdf
 
The paper in the link is, for those who don't speak Swedish, a counterfactual about one suggestion for löntagarfonder made by Meidner et al. It is worth mentioning that there is a lot of different possibileties in the details and not all where worked out.

The bulk of the paper is concerned by calculating when the funds will take over. The paper does those calculations for some companies in but also conclude that it require some assumptions that wheren't really realistic. Meidner et als assumption is 35 years with a 20 % tax on profit and a 10 % profit on the companys worth. The paper conclued that a little les then half would be taken over by 2000 if it started in 1980.

But since the profits where taxed to finance the takeover, the campanies would have to decrease their own capital to keep the profit at a reasonable level so the funds would take over quicker.

It would also lead to a move abroad and raise money trough other means, borrowing and so on (not sure what the english term is, lower solidity?)

It's not really clear how the funds would operate because it was unclear who would own the funds. The workers in a company would take over but there would also be some form of solidarity so it would require a complex overhead to keep track of who have the right to what part. And it is also unclear what would happen to the profits of a fund. (And people think PPM is complicated.)

But profits would drop if the funds where to have other prorities then highest possible profits and that where part of the idea. That would also reduce customer benefits, be it a higher price or lower quality.

It would reduce the capital in the company, leading to a lower productivity and thus lower wages. They dubt the companies owned by funds would lower the wages so inflation is a great risk.

The power amassed by LO would be huge. They would be the largest union, employer, capital owner and possibly media owner. The authors question if such a big complex can even hold together.
 
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