Codetermination: A way to rebalance the economy?
Codetermination is one of the most interesting ideas you've never heard of.
- Codetermination is the name for corporate governance systems that place workers on the executive board.
- It is very popular in Europe but has long lost its popularity in the United States.
- It offers a variety of benefits, but it would change many aspects of the American economy.
We are living in an age where the questioning of major institutions occurs regularly. Large numbers of Americans support changing to a new economic system, and even many who recommend keeping capitalism think it needs a bit of an overhaul.
One idea, common in Europe but less so in America, that does the latter is called codetermination and maintains capitalism and the private ownership of property while giving workers a say in how their workplaces are managed. We'll look at what it is, how it works, and the proposal to bring it to America.
What is codetermination?
Codetermination can be broadly defined as workers' participation in decision-making in business affairs. This can take many forms, from workers' councils that offer advice on how to improve productivity in exchange for bonuses to having workers' representatives on executive boards. The basic idea is to give workers a way to protect their interests and help advance the organization in a formalized way. It has the added benefit of treating workers as people rather than as objects for productivity.
How does it work in the places that have it?
Codetermination is much more common in Europe than in the United States. Of the European countries, Germany is far and away the most invested in the concept. In Germany, all companies over a certain size are required to have some kind of it, with worker and union representatives occupying anywhere from a third to half of the boards of some major firms.
Most Western European companies have two boards, one that manages the day to day affairs of the company and one that supervises them. In the European firms with codetermination, employee representatives are placed on the supervisory board. They vote, deliberate, and otherwise help to run the company in the same way as any other board member but with a different set of values than mere profit.
Other countries in Europe also have codetermination, though we won't look into them here. The Germans also have workers councils that introduce an element of democracy to the shop floor in addition to the boardroom that is also worth digging into.
In the United States, a different kind of codetermination was common during parts of the 20th century. The Scanlon plan, a type of codetermination, was designed in the United States and was widely adopted in many industries. Based on the idea that workers did better when they were participating, the plan creates committees of workers and management that propose solutions to problems and develop ideas to improve productivity. In many cases, improved productivity translates into bonuses.
The plan was designed for failing enterprises but was later adopted by successful ones when they realized its advantages. During WWII, many companies adopted this system as a way to improve both productivity and morale. Interest in this program tanked after the war ended, and today the idea is entirely foreign to most Americans.
What effect does this have?
Studies have shown that codetermined businesses operate with long-term thinking rather than pursuing short-term profit and see improvements to their productivity. Another study found that codetermination can keep income inequality low across an entire country, presumably by keeping executive pay at reasonable levels and putting that money either in the hands of workers or back into the company. Countries with more codetermination also see fewer strikes.
Another study that cast doubt on the productivity benefits did find the system increased the bargaining power of the workers.
It also isn't too horrible for the economy overall to have large firms run this way, given how the German economy is one of the best in Europe. Over the last few decades, their economy has grown a tiny bit faster than America's. Fears that codetermination would turn Germany into Tito's Yugoslavia as the 20th century came to a close have proven laughably inaccurate.
All of the famous Teutonic companies you've heard of have workers on the board of directors. All things considered, they do pretty well. This is in part because there is a culture of pragmatism on these boards. Just because the workers have voting rights doesn't mean that they immediately run the company into the ground; it seems like the people who work at a place understand how to run it.
Elizabeth Warren’s plan to bring it to America
As part of her marvelously wonky campaign for president, Elizabeth Warren has introduced a plan to bring Germanic codetermination to the United States in a big way.
Her plan for codetermination is part of her larger Accountable Capitalism Act bill. The portion that focuses on worker participation is ambitious. Her plan would require some corporations, a few thousand of the largest firms in the country, to allow workers to elect a full 40% of the membership of their executive boards.
The idea is popular, with a majority of voters in every single congressional district supporting more codetermination in American business.
The plan also would require corporations to consider other interest groups than just their shareholders in decision-making, regulate the sale of stocks earned as executive payment more tightly, require near consensus on corporate boards before they could make donations to political organizations, and make the largest corporations seek federal charters rather than state ones.
What might it look like if we had it here?
Codetermination in the United States would have a variety of effects.
As mentioned above, codetermination at even a few of the largest firms would likely improve the condition of American workers a great deal given the decline in their bargaining power over the last few decades. Even if this is the only benefit to workers to be expected, which is a dubious stance, we would expect some increases in pay as a result of this plan. The other mentioned factors can also be expected to increase employee pay.
We might also expect codetermined companies to be less inclined to ship jobs overseas or layoff workers to raise profits as those very workers would have a say on the executive board, a point that has been raised in studies on the subject.
There would also be a variety of effects relating to the sudden inclusion of a new interest group in the C-suites. Rather than just focusing on the needs of shareholders, large corporations would also have to include their worker's interests in decision-making. This could not only change the choices they make, but alter the way our economic decision-makers think of workers, stockholders, managers, and how they can and should interact with each other.
On the other hand, the changes would likely cause the stock market to fall a bit as stock values returned to the actual values of companies for a number of reasons.
This wouldn't be a problem for most people since 80 percent of the stock market is owned by a mere 10 percent of Americans. It will, however, still be a bit of a shock. One estimate suggests the fall would be as much as a 25 percent drop, although that estimate assumed the adoption of a plan much more extensive than Elizabeth Warren's, more like the current German system, and should be considered just outside the scope of probability.
Discussions about how the economy should be structured are taking place ever more frequently and are increasingly focusing on ideas that have long been on the fringes of American thought. Codetermination may soon return to the American workplace as a way to help alleviate our economic concerns. While it isn't a silver bullet that cures all societal aliments by any means, it could prove an effective method to rebalance the economic scales.
What would happen if you tripled the US population? Join Matthew Yglesias and Charles Duhigg at 1pm ET on Monday, September 28.
Whether or not women think beards are sexy has to do with "moral disgust"
- A new study found that women perceive men with facial hair to be more attractive as well as physically and socially dominant.
- Women tend to associate more masculine faces with physical strength, social assertiveness, and formidability.
- Women who display higher levels of "moral disgust," or feelings of repugnance toward taboo behaviors, are more likely to prefer hairy faces.
Beards and perceptions of masculinity<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjU5OTg0MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0NzkxMjM3N30.cH-GqNwP5GVqvstgJWAhBPn1B_lYpVEAI0I7iax7EQw/img.jpg?width=1245&coordinates=0%2C1900%2C0%2C849&height=700" id="caae6" class="rm-shortcode" data-rm-shortcode-id="cb0a355a4e8e1899789bc45f3f7aef56" data-rm-shortcode-name="rebelmouse-image" />
Photo Credit: Wikimedia<p>The study used 919 American (mostly white) women ages 18-70 who rated 30 pictures of men they were shown with various stages of facial hair growth. The photographs depicted men with faces that had been digitally altered to look more feminine or more masculine, with a beard and without a beard. The women rated the men according to perceived attractiveness for long-term and short-term relationships. The study found that the more facial hair the men had, the higher the men were rated on their attractiveness, particularly for their suitability for a long-term relationship.</p><p>Part of this might be attributed to facial masculinity — i.e. protruding brow ridge, wide cheekbones, thick jawline, and deeply set narrow eyes — which conveys information to a woman about a man's underlying health and formidability. Women tend to associate more masculine faces with physical strength and social assertiveness. It can also indicate a man with a superior immune response. The researchers suggested that their findings favoring bearded men could be due to the fact that facial hair enhances the masculine facial features on a man's face, like creating the illusion of a thicker jaw line. This could communicate direct benefits to women like resources and protection that would enhance survival among mothers and their infants. In other words, while a beard doesn't mean superior genetics in and of itself, it might be a primitive, ornamental way of saying, "Hey girl, I'm a testosterone-fueled lean, mean, pathogen fighting machine." <br></p><p>It could also be that a beard becomes its own destiny. The researchers in this study cite prior research that found that by growing a beard, men felt more masculine and had higher levels of serum testosterone, which was linked to a higher level of social dominance. They also tended to subscribe to more old-school beliefs about gender roles in their relationships with women as compared to men with clean-shaven faces.<span></span><br></p>
What does disgust have to do with beard preference?<p>Obviously, not all women dig beards. The researchers were particularly interested in what traits make a women prefer bearded men over clean-shaven faces. They looked into several factors including a woman's disgust levels on various concepts, her desire to become pregnant, and her exposure to facial hair in her personal life. </p><p>According to the study, women who were not into facial hair were turned-off by potential parasites or other critters they imagined could be in the hair or skin. Women ranking high on this "ectoparasite disgust" scale might have viewed beards as a sign of poor grooming habits. However, women who ranked higher in levels of "pathogen" did find the bearded men to be desirable, possibly because they perceived beards as a signal of good health and immune function. An intriguing discovery in the study was links to morality. Women who displayed higher levels of "moral disgust," or feelings of repugnance toward taboo behaviors, were more likely to prefer hairy faces. The authors opined that this could reflect a link between beardedness, politically conservative outlooks, and traditional views regarding performances of masculinity in heterosexual relationships.</p>
Additional findings<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjU5OTg1My9vcmlnaW4uZ2lmIiwiZXhwaXJlc19hdCI6MTYyNDI1NjUyOX0.P9B8WbmJR0q4nfzYZKbuNSA-2SAigVWJgrQE-_Gxlds/img.gif?width=980" id="49143" class="rm-shortcode" data-rm-shortcode-id="2ed3b1d6f20fc170bf2974646e565e8d" data-rm-shortcode-name="rebelmouse-image" />Giphy<p>The correlations that existed between married and single women's rating on the attractiveness of beards were not particularly clear, although the researchers noted that single and married women who wanted children tended to find beards more attractive than the women who didn't want children. They also found that women with bearded husbands found beards to be more attractive, which might indicate that social exposure to beards influences how desirable they are perceived of as being. Or it could be that men with wives who like beards grow beards.</p><p>It's important to note that culture plays a huge role in how attractive women perceive certain male characteristics as being. This study looked at a small, culturally specific group of American women, so no big, universal claims should be made about masculinity, facial hair, and male desirability to women. However, research like this is important in highlighting how human grooming decisions are driven by much more than fashion trends. Sociobiological, economic, and ecological factors all play a part in the way we choose to present ourselves.</p>
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