Ethical corporate dictatorship or the model of free exit

He who has never learned to obey cannot be a good commander. - Aristotle

Companies are a source of binding standards. Until (if ever) they become part of public discourse, these standards will remain arbitrary and anti-democratic, because they go unchecked. Indeed, this form of government remains “private” in the sense that those affected by its decisions – namely the employees – cannot question the legitimacy of those decisions and are required to submit to this arbitrary power (or emigrate).

With the admission that companies, especially larger ones, abide to the same rules most governments do, we are led to the conclusion that management teams operate in the same fashion as government officials, thus, making the selection of a political system an obligation. The notion of government has always gone hand in hand with questions regarding its legitimacy. The idea of creating a parallel between the decision-making structures of the State and those of the company in order to hoghligh the tension between our, relatively, democrating principles and the subordination endured by employees is not new.

The "new feudalism" that was being established in factories as early as the 1830s became the target of the socialist party who advocated of "brining the Republic down into the workshop". Catholics of the Le Sillon movement in the late 19th century stated that it is not possible to "have the republic in society while the monarchy remains in the company."

Before an attempt against or for corporate dictatorship is made, it's useful to examine the effect that recent workplace events had on the structure of consortiums, to justify our latter attempt. There exists an argument that the uberisation of the workplace and the rise of the gig economy have rendered wage labour language and the idea of a monarchy in the workplace obsolete. Nevertheless, the realisation remains that contracts between platforms and "self-employed collaborators" or "partners" probably give companies more power over workers than tradional wage relations, particularly by putting them in competition with one another and creating the rules that set the game afoot.

For the moment, platform economy and self-employed labour are statistically marginal so further conclusions about the effect of uberisation in the structure of production must be refrained from.

What can be regarded as ground truth is that without regulation, private property rights, particularly in the working world, becomes a breeding ground for hierarchies of every kind.

Having established that a company is, in fact, a government, any possibility of its complete democratisation must be ruled out. Resolving the issue of the anti-democratic nature of firms, means, in general, that employees are given a stronger voice, able to deny the company's actions. This creates two pain points that are difficult to alleviate; denying a company's actions, even when supported by the majority, often has an impact on a whole host of other individuals whose opinion goes unheard. The second, is that the majority has little or no oversight. These two conditions make coprorate democracy extremely dangerous.

Does that translate into corporate dictatorship being the only viable way of running a company?

Successful companies have great operators. These are individuals or groups of individuals that act as a single entity, responsible for steering the micro and macro operations of the firm towards a certain direction. The tools required for the task are quantitative data, tools that exploit this data and ethics.

There are only a few companies that have all three at their disposal. Usually, ethics, because of its vagueness and tentativeness, is the prime victim of operations. Walk into a management room and everyone will brag about their ethical corporate model, but in fact, what they do have are unenforcable proposals.

There are common solutions; labour relatins under proper rule of law, subjective rights and voice amplification through compulsive participatory mechanisms. Those are simply dissapointing and act as bandages over an open wound that needs stitching.

Two are the fundamental components to the solution of workplace autocracy; ethics and free exit.

A regulatory model based on moral principles that systematizes, defends and recommends concepts of right behavior across all levels of the organization along with the true freedom of exit can liberate the workplace of pathogenic behavior, forcing the survival of the fittest, both among the citizens but also among the companies paritcipating in a free market.

Contractual barriers, such as noncompetes that bar employees from working for companies in the same industry must be the first victim of ethical corporate dictatorhsips. Especially in high-demand markets, the lack of viable alternatives is no longer an excuse.

As far as moral principles, there are two indispensable ones; proof-of-work and non-zero-sum. A system that compenesates participants based on the level of their involvement is crucial to fairly dispense the resources of the system. What's more, the realization that individuals inside the company are not competing with each other but with the market itself, and the goal is to grow the market rather than hunt for a bigger stake at it.

There is no perfect way to sanitize the workplace but injecting ethics into an already corrupt system seems to bear more fruit than attempting to democratize it.

Regulation should focus on the former.

Tags: startups, government, corporate, management

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