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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.
Emotional intelligence is a skill sought by many employers. Here's how to raise yours.
- Daniel Goleman's 1995 book Emotional Intelligence catapulted the term into widespread use in the business world.
- One study found that EQ (emotional intelligence) is the top predictor of performance and accounts for 58% of success across all job types.
- EQ has been found to increase annual pay by around $29,000 and be present in 90% of top performers.
Researchers hope the technology will further our understanding of the brain, but lawmakers may not be ready for the ethical challenges.
- Researchers at the Yale School of Medicine successfully restored some functions to pig brains that had been dead for hours.
- They hope the technology will advance our understanding of the brain, potentially developing new treatments for debilitating diseases and disorders.
- The research raises many ethical questions and puts to the test our current understanding of death.
What's dead may never die, it seems<p>The researchers did not hail from House Greyjoy — "What is dead may never die" — but came largely from the Yale School of Medicine. They connected 32 pig brains to a system called Brain<em>Ex</em>. Brain<em>Ex </em>is an artificial perfusion system — that is, a system that takes over the functions normally regulated by the organ. The pigs had been killed four hours earlier at a U.S. Department of Agriculture slaughterhouse; their brains completely removed from the skulls.</p><p>Brain<em>Ex</em> pumped an experiment solution into the brain that essentially mimic blood flow. It brought oxygen and nutrients to the tissues, giving brain cells the resources to begin many normal functions. The cells began consuming and metabolizing sugars. The brains' immune systems kicked in. Neuron samples could carry an electrical signal. Some brain cells even responded to drugs.</p><p>The researchers have managed to keep some brains alive for up to 36 hours, and currently do not know if Brain<em>Ex</em> can have sustained the brains longer. "It is conceivable we are just preventing the inevitable, and the brain won't be able to recover," said Nenad Sestan, Yale neuroscientist and the lead researcher.</p><p>As a control, other brains received either a fake solution or no solution at all. None revived brain activity and deteriorated as normal.</p><p>The researchers hope the technology can enhance our ability to study the brain and its cellular functions. One of the main avenues of such studies would be brain disorders and diseases. This could point the way to developing new of treatments for the likes of brain injuries, Alzheimer's, Huntington's, and neurodegenerative conditions.</p><p>"This is an extraordinary and very promising breakthrough for neuroscience. It immediately offers a much better model for studying the human brain, which is extraordinarily important, given the vast amount of human suffering from diseases of the mind [and] brain," Nita Farahany, the bioethicists at the Duke University School of Law who wrote the study's commentary, told <em><a href="https://www.nationalgeographic.com/science/2019/04/pig-brains-partially-revived-what-it-means-for-medicine-death-ethics/" target="_blank">National Geographic</a>.</em></p>
An ethical gray matter<p>Before anyone gets an <em>Island of Dr. Moreau</em> vibe, it's worth noting that the brains did not approach neural activity anywhere near consciousness.</p><p>The Brain<em>Ex</em> solution contained chemicals that prevented neurons from firing. To be extra cautious, the researchers also monitored the brains for any such activity and were prepared to administer an anesthetic should they have seen signs of consciousness. </p><p>Even so, the research signals a massive debate to come regarding medical ethics and our definition of death. </p><p>Most countries define death, clinically speaking, as the irreversible loss of brain or circulatory function. This definition was already at odds with some folk- and value-centric understandings, but where do we go if it becomes possible to reverse clinical death with artificial perfusion?</p><p>"This is wild," Jonathan Moreno, a bioethicist at the University of Pennsylvania, told <a href="https://www.nytimes.com/2019/04/17/science/brain-dead-pigs.html" target="_blank">the <em>New York Times</em></a>. "If ever there was an issue that merited big public deliberation on the ethics of science and medicine, this is one."</p><p>One possible consequence involves organ donations. Some European countries require emergency responders to use a process that preserves organs when they cannot resuscitate a person. They continue to pump blood throughout the body, but use a "thoracic aortic occlusion balloon" to prevent that blood from reaching the brain.</p><p>The system is already controversial because it raises concerns about what caused the patient's death. But what happens when brain death becomes readily reversible? Stuart Younger, a bioethicist at Case Western Reserve University, <a href="https://www.nature.com/articles/d41586-019-01216-4#ref-CR2" target="_blank">told <em>Nature</em></a> that if Brain<em>Ex</em> were to become widely available, it could shrink the pool of eligible donors.</p><p>"There's a potential conflict here between the interests of potential donors — who might not even be donors — and people who are waiting for organs," he said.</p><p>It will be a while before such experiments go anywhere near human subjects. A more immediate ethical question relates to how such experiments harm animal subjects.</p><p>Ethical review boards evaluate research protocols and can reject any that causes undue pain, suffering, or distress. Since dead animals feel no pain, suffer no trauma, they are typically approved as subjects. But how do such boards make a judgement regarding the suffering of a "cellularly active" brain? <a href="https://bigthink.com/philip-perry/after-death-youre-aware-that-youve-died-scientists-claim" target="_blank">The distress of a partially alive brain</a>? </p><p>The dilemma is unprecedented.</p>
Setting new boundaries<p>Another science fiction story that comes to mind when discussing this story is, of course, <em>Frankenstein</em>. As Farahany told <em>National Geographic</em>: "It is definitely has [sic] a good science-fiction element to it, and it is restoring cellular function where we previously thought impossible. But to have <em>Frankenstein</em>, you need some degree of consciousness, some 'there' there. [The researchers] did not recover any form of consciousness in this study, and it is still unclear if we ever could. But we are one step closer to that possibility."</p><p>She's right. The researchers undertook their research for the betterment of humanity, and we may one day reap some unimaginable medical benefits from it. The ethical questions, however, remain as unsettling as the stories they remind us of.</p>
Starting and running a business takes more than a good idea and the desire to not have a boss.
- Anyone can start a business and be an entrepreneur, but the reality is that most businesses will fail. Building something successful from the ground up takes hard work, passion, intelligence, and a network of people who are equally as smart and passionate as you are. It also requires the ability to accept and learn from your failures.
- In this video, entrepreneurs in various industries including 3D printing, fashion, hygiene, capital investments, aerospace, and biotechnology share what they've learned over the years about relationships, setting and attaining goals, growth, and what happens when things don't go according to plan.
- "People who start businesses for the exit, most of them will fail because there's just no true passion behind it," says Miki Agrawal, co-founder of THINX and TUSHY. A key point of Agrawal's advice is that if you can't see yourself in something for 10 years, you shouldn't do it.
After a decade of failed attempts, scientists successfully bounced photons off of a reflector aboard the Lunar Reconnaissance Orbiter, some 240,000 miles from Earth.
- Laser experiments can reveal precisely how far away an object is from Earth.
- For years scientists have been bouncing light off of reflectors on the lunar surface that were installed during the Apollo era, but these reflectors have become less efficient over time.
- The recent success could reveal the cause of the degradation, and also lead to new discoveries about the Moon's evolution.
A close-up photograph of the laser reflecting panel deployed by Apollo 14 astronauts on the Moon in 1971.
NASA<p>The technology isn't quite new. During the Apollo era, astronauts installed on the lunar surface five reflecting panels, each containing at least 100 mirrors that reflect back to whichever direction it's coming from. By bouncing light off these panels, scientists have been able to learn, for example, that the Moon is drifting away from Earth at a rate of about 1.5 inches per year.<br></p><p style="margin-left: 20px;">"Now that we've been collecting data for 50 years, we can see trends that we wouldn't have been able to see otherwise," Erwan Mazarico, a planetary scientist from NASA's Goddard Space Flight Center in Greenbelt, Maryland, <a href="https://www.nasa.gov/feature/goddard/2020/laser-beams-reflected-between-earth-and-moon-boost-science" target="_blank" rel="dofollow">said</a>. "Laser-ranging science is a long game."</p>
NASA's Lunar Reconnaissance Orbiter (LRO)
NASA<p>But the long game poses a problem: Over time, the panels on the Moon have become less efficient at bouncing light back to Earth. Some scientists suspect it's because dust, kicked up by micrometeorites, has settled on the surface of the panels, causing them to overheat. And if that's the case, scientists need to know for sure.</p><p>That's where the recent LRO laser experiment comes in. If scientists find discrepancies between the data sent back by the LRO reflector and those on the lunar surface, it could reveal what's causing the lunar reflectors to become less efficient. They could then account for these discrepancies in their models.</p>