Hi All,
I have this question since some time ago and haven't been able to figure it out myself yet, so I'm asking for some guidance here.
What happens in a public corporation whose shareholders are too fractured or disperse. According to my understanding, any individual or group who controls 50% + 1 of the shares gets to appoint management, right? But what happens if there are so many different groups that no single group or "coalition" can control 50%+1 of the shares?
The question arises from the following situation: in Venezuela, the oil company is a state monopoly. The government is the sole shareholder (in the name of the people... yeah, right). So, clearly the government decides whatever is going to happen with the Oil company, PDVSA.
Now, I'm one of several people proposing to privatise PDVSA. Since the people has been oppresed by the government and they have been paying taxes and inflation for decades, it seems to me just that all the people should get shares of the newly private PDVSA. But if we do this and give every citizen an equal amount of shares in the new company, then we would have some 25 million shareholders!
I have read more than once Rothbard's proposal on how to desocialize for the east european countries, and there he suggests the current workers of the company should become the new owners (a syndicalist approach, I believe he calls it). But politically this solution would be next to imposible in Venezuela. I guess most of the people would prefer the status quo, where at least they can expect handouts from the government, than seeing a relatively small group (around 20,000 people) to own effectively the company that for decades politicians and the media have been telling them "belongs to all venezuelans".
So the question is: would an egalitarian approach (equal number of shares for every person) work in practice or would the company be stuck in indecision, since nobody really can claim control?
The stockholders who want to vote would convene and vote and choose solutions via majority decisions. I don't see how this is such a big deal. I do, however, have an issue with your vision of dividing the stocks up between all the citizens of Venezuela. It seems to me like just another egalitarian "solution" to the same old problems.
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My answer would be that it should be owned by the current workers. Being state property, it is effectively unowned, and thus the current workers can claim ownership by virtue of the fact that they are the only ones who have mixed their labor with it. Also, congrats for looking for a principled solution to privatization, rather than the corporatist scams that "privatization" usually entails.
Market anarchist, Linux geek, aspiring Perl hacker, and student of the neo-Aristotelians, the classical individualist anarchists, and the Austrian school.
wombatron:My answer would be that it should be owned by the current workers. Being state property, it is effectively unowned, and thus the current workers can claim ownership by virtue of the fact that they are the only ones who have mixed their labor with it.
They have been paid for that, most likely in excess of what they would earn on the free market. They don't deserve the capital of the enterprise in addition.
If anyone does deserve the capital, it is the people who have been paying monopoly prices, the customers. They should get the shares in compensation.
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Stranger: They have been paid for that, most likely in excess of what they would earn on the free market. They don't deserve the capital of the enterprise in addition. If anyone does deserve the capital, it is the people who have been paying monopoly prices, the customers. They should get the shares in compensation.
I disagree, and I have to go with Rothbard here (links here and here). Dividing up the ownership between every citizen would be extremely unwieldy. Also, it wouldn't necessarily be just; people who paid more taxes would have a greater right to ownership of the company. Homesteading would be a more effective method.
wombatron:Homesteading would be a more effective method.
Except it makes no sense. Homesteading is the appropriation of resources no one is using. You might as well apply homicide law as an effective method here.
The only way that homesteading would make sense would be if the people with the power to appropriate the company were rewarding for doing so, meaning that politicians would be paid for privatizing public property.
wombatron:Also, it wouldn't necessarily be just; people who paid more taxes would have a greater right to ownership of the company.
How is that unjust?
I think it sounds like a good idea for everyone to own a share. This extreme dispersion of ownership would most likely quickly begin to reconcentrate itself. I'm sure many would sell their share and as the price goes up it'll continue to encourage selling. This is where you decide if you need the money now by selling a share or do you hold it for potentially greater future wealth?
What about the threat of internal factions siezing the company? What's the degree of stability there?
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Why would Venezula relinquish control of the oiling industry?
Thanks all for your answers. I'll try to address your questions in turn.
First of all, I personally would be in favor of applying Rothbard's proposal. The workers of the industry would take over ownership. Most likely they would need to associate with other corporations since PDVSA is severely under-capitalized, due to years of socialist neglect, both during and before Chavez' administration. In fact if I could I would even further. I would return ownership to the original appropriators of the land that were confiscated
The "egalitarian" solution (equal shares to every citizen) is simply a recognition of the political reality now prevailing in the country. There's simply no way that a political party proposing a non-eglitarian privatisation would be elected into office. During 50 years the politicians and the media have been insistently driving the point that the oil industry belongs to all venezuelans. Another story would be if a complete soviet-style collapse happens and libertarian-leaning forces take power in the mayhem, but I don't foresee this happening in Venezuela.
pairunoyd:Why would Venezula relinquish control of the oiling industry?
Under normal circumstances, for no reason at all. It would have to be forced from the bottom by the people, or forced by a complete collapse of the whole system.
pairunoyd: What about the threat of internal factions siezing the company? What's the degree of stability there?
I'm afraid I don't understand exactly what you mean. I guess that, as any other publicly traded corporation, this one would be subject to a takeover risk, but I don't care about that. i just want to take it away from the hands of the state, where its only purpose has been to aggrandize state power and facilitate the raise and strengthening of socialism.
pairunoyd: Why would Venezula relinquish control of the oiling industry?
Because the value of the oil industry would be greater if it was controlled by someone more competent, and thus Venezuela would be wealthier if it sold its control of the industry for the net present value of this future income.
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