Democratization of Wealth: Letting Employees Participate in Ownership
A thoughtful essay in a Wall Street Journal has rolled over and over in my mind the past few years - with the treatment of how ownership of capital is or should be structured in societies which claim to be democratic. Three years after that article and a small spate of responses that I have followed, I see that the question is expanding in the minds of financial creatives - those who tend to see more clearly what is really going on without being stuck within the constraints of the “rules” that everyone else seems to need to play by.
It is no longer a question in anyone’s mind who follows current events that there truly is a vast economic inequality dividing capitalist societies today. This is prevalent in nations where, a mere 30 years ago, public confidence in the attainability of the “American dream” brought great surges of economic and personal prosperity to the average family of North America and the United Kingdom.
Now, however, confidence in the promises of the 'dream' has faded. The average worker is punching the clock, disenchanted with excessively high CEO compensation, while suffering eroding confidence that their pensions will exist upon their retirement. They are further discouraged about the sure decimation by taxation of anything they have managed to put away. Stockholders watch their portfolio values go up and down but have no idea what ideals are influenced by boardroom decisions. As I write, the top 1% continues to get richer while the rest are effectively shut out of the economic equations in which they must make a living and support their families.
The monetary inequality in the richest nations of the world is drifting wider by the day. Yet, the conversation at large has at least been started and I look forward to seeing what comes from those who see the need to return financial power to the people. I do not believe it requires the Marxist prognostication that the destitute proletariat will force their way into the gilded halls of the out-of-touch bourgeoisie to create their version of wealth equality.
For my part, I find it simpler and more appealing to advocate for forward-thinking entrepreneurs who see the wisdom of buying an existing business and doing their own small part to possess and influence a bit of the equation. I know personally that business ownership is immediately and positively empowering. And I’m not talking about billion dollar companies. Rather, I am alluding to accounting firms, print shops, auto dealerships and widget manufacturers - the day to day services and products that every community needs in order to function.
As the baby boomer generation reaches retirement, I see a golden opportunity to naturally restore wealth equality for the average citizen. Many of these retiring boomers are business owners faced with the prospect of handing the company to offspring who possess neither the interest nor the ability to run and prosper the business. On the other hand, the recent generations, disillusioned with their forebears’ handling of capitalist opportunities, are looking to be in control of their own businesses. They are also seeking to be in charge of their own fortunes and to regain middle class prosperity and security.
With the right knowledge, it is easy to find and finance existing businesses with a viable revenue stream and a long history of operations. All that is needed is a business person who still has a vision to pursue the dream.
Ownership of capital should and can easily be in the hands of the average citizen. I believe in us and that the economic and personal prosperity that has dwindled in recent years can surge again.
