Owners, workers can join as allies, March 23, 2007, 2D.

Take a trip to the Abilene Zoo and you will see two pairs of Africa’s most famous predators living side by side—separated by concrete and steel, of course.  The lions and hyenas of Africa are competitors for territory and food in the wild.  Because of that, they are also mortal enemies.  They have a learned hatred and fear of each other.

Karl Marx, in his writings on class struggle, identified that a similar struggle for resources also exists in capitalistic societies between business owners and workers.  The battle between owners and workers is over which group is entitled to the surplus revenue of their firms.  Surplus revenue is the money that is brought in by the firm over and above costs—in others words, profit. 

Owners argue that they are entitled to profits because they incur the risks of creating and operating the companies and that the profits are their due rewards.  Workers, as owners traditionally see them, are necessary parts of the production process and as such, receive their compensation in the form of wages, salaries, and benefits.  Workers, on the other hand, believe that they should receive the profits because it is their talents, skills, and abilities that make the company possible.  Without workers and their contributions to the production process, there would be no output and ultimately, no companies.

As argued by Marx, the only way to end this struggle is to take away the private ownership of capital and establish a system where communal ownership allows profits to be distributed and shared by those in community.  The rise and fall of the Soviet Union last century demonstrates that the notions of communism have severe failings and that it is not the best solution to ending the struggle between owners and workers.

Instead of taking away business ownership from individuals and making everyone workers, as communism suggests, some companies enact strategies that do the opposite.  Through stock ownership and options programs, some companies offer employees ownership in their ventures as rewards for their contributions.  In essence, this model makes workers into owners.  It aligns the interests of the workers and the owners in the pursuit of a common goal—to increase rather than to divide profits.

Howard Schultz of Starbucks Coffee attributes much of the success of his company to the involvement, commitment, and contributions of Starbucks’ people.  A strategic business decision in the early 1990s allowed full- and part-time workers to participate in the company’s stock options program.  By turning their workers into owners, Starbucks created an entire workforce of people who possess high levels of pride and dedication to their jobs and organization.  The benefits of this philosophy have been tremendous for Starbucks.

It is doubtful that Karl Marx ever conceived of a situation where workers and owners worked together for their mutual best interests.  It was self interest that helped tear apart communism in the Soviet Union and “enlightened” self interest that built Starbucks into the successful company that it is today.

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