Richard Wolff on Investor Risk vs. Worker or Consumer Risk

Richard Wolff on Investor Risk vs. Worker or Consumer Risk

Investors risk [by] putting their money into
buying shares of a corporation. So they end up having all the power and control
to elect the board of directors and ultimately to control what happens in
the corporation (what decisions it finally makes). And the notion is that
somehow reasonable or fair because they have put their money at risk. I always
found this argument somewhere between outrageous and insulting. And let me
explain. What the workers do when they go to work at a corporation? Well, we know
part of the answer: they do work. They use their brains and muscles to transform
raw materials into finished goods and services. That’s what they’re paid to do.
But they also take risks, and indeed their entire families do. Here are some
of their risks. The environment where the worker works, that’s not a decision the
worker makes. It’s a decision the employer makes. Is the air good? Is the
water good? Is the sound at a reasonable level? Is it polluted? All of those
questions will shape the health of the worker and the kind of health he or she
takes home at the end of the day. Workers take a risk when they work in the
environment that’s controlled by the employer. Let me give you another example.
If the employer, the Board of Directors, make a mistake and produce something for
which there’s no market the workers will be fired. They take a risk when they go
to work for any company that their job will be lost their income will be lost
because of decisions over which they have absolutely no power, made by the
Board of Directors, other people, and of course they’re taking a risk. They’re
taking a risk that production will be moved overseas. They’re taking a risk
that the company will be unable or unwilling to pay taxes. And here they are
having move to the community where they have a
job only to discover that the community can’t survive because the companies
aren’t paying taxes. Come on, folks. When you choose a job you’re choosing a
life, a community, a place for your home, a place for your family, all of those
things are not what you’re paid for. You’re paid for your labor but you’re
not paid for your risk. Well, why then if you’re not paid for the risk you take as
a worker would you want to believe that employers ought to be paid for the risk
they’re taking? Let me give you another example. The customer takes a risk. When I
buy something here’s my risk: the thing I buy, for which I’ve paid, may not be what
the seller claimed it would be. The courts in the United States are full of
cases where exactly that has happened. We know the risk and it’s not much of a
comfort to say “well, you can get a lawyer”. That’s expensive. “You can take time to
file a claim”. That’s a problem. There are all kinds of risks but we don’t ask
corporations to compensate us for the risk. We are told: “You take the risk when
you buy the commodity”. Yeah, and we could tell the corporate investor “You take the
risk when you invest. Don’t give us arguments about being paid for a risk if
you’re not willing to pay the customer or the worker for the risks they have to
take as well”.

22 thoughts on “Richard Wolff on Investor Risk vs. Worker or Consumer Risk

  1. This is something that I always found baffling as well. The idea that "investor risk" is so paramount that they get to control everything about a company is ridiculous. It's a literal form of money buying power and freedom. An employee and even regular people in this country never get such power or freedom, despite the hours they put into society and the heavy risk they take everyday to please the employers.

  2. It's not about morality. It's about appeasing those with money as best as you can so some bills are dropped your way. That's why there's a "fiduciary responsibility" by law for the board of directors to maximize share holder value, those with the money, and not the workers, who have nothing other than what they can get by renting their bodies for labor.

  3. Now you know the real reason why Jordan lies a lot Peterson went into “rehab”. Gonna look pretty stupid when all of professor Wolff’s assertions about capitalism(what with completely understanding everything that flies out of your mouth, and being well read on Marxist economics and not just regurgitating the rhetoric of the elite) play out. Zero argument. Bravo as always

  4. Very good one, Richard. I hope you will expand on this by pointing out that most of these large corporations are managed by a group of insiders known as the directors who often rotate between several corporations and yet themselves usually don't own very much of the stock but take a large, exorbitantly large slice of the profits for almost no risk. This 4th class seems to often be missing from these sorts of discussions.

  5. In reply to NathansHVAC and his comment: Turning socialist is a bigger risk of failure. 100% risk of failure.
    I say: Ha! Move along fear-mongering troll. Join your rogue GOP 'pillars of democracy,' the Senate's Freedom Caucus and their a-hole, lawbreaking, Constitution-shredding members like Jim Jordan, Devin Nunes, Matt Gaetz, Steve King, and all the other conniving, hypocritical, special-interest whores who now grovel at the knee of der Fuhrer, tRump-the-supreme-maniac. Our democracy is going down in flames under the criminal stranglehold of these 'dark money controlled' thugs, henchmen and traitors. It's become a consortium of mind-controlled Manchurian Candidates. Pull the curtain back and shine some light on the many layers of insidious, stinking corruption… populated predominantly by Republicans– the once Grand Old Party. Well, this lot has led the GOP to rot, and fester, as their extraordinary hubris grows, unchecked. What a pile of writhing maggots, feeding on the carcass of what was once a strong democracy, and now threatened by the insatiable lust for power and greed by a minority known as the elites. G'head, join 'em, NathansHVAC. You'll be swallowed up, exploited, sucked dry, and spit out… just like the rest of us in this dystopian nightmare turning into our reality… 'cuz you're not part of the privileged Ruling Class. They don't waste time trolling comments sections of Youtube videos. Videos, like these, which are being made with sincere dedication to educating the masses and helping them to WAKE UP from all the propaganda they have been fed, for centuries, by those eternally entrenched Ruling Classes.

    Wake up, for God's sake, and demand equitable treatment and equal rights as human beings. A fair system, that isn't endlessly stacked against the success of the masses, is all most people ask for. Would a truly benevolent God/Creator/Higher Power offer anything less? I think not. It's up to humans to shape a radically transformed future for ourselves. And it begins with believing we all, each and every one of us, has value as a sovereign being. Imagine disabling the perpetual global war machine– which is fed by the Ruling Classes' need to maintain control over economies, their insatiable wealth accumulation, and the populations that make their privileged lives possible. Imagine popping that balloon… that enormous, worldwide charade we've all been bit players in. The whole thing is a creation of humans and, for the most part, we don't even recognize we've become enslaved in it. It's well past time to begin creating a new reality for life on this planet. A reality that includes greater love for our fellow human beings, instead of the suspicion, competition, divisiveness, and hate mongering that we've been programmed to believe is just the way of the world. It's not 'the way.' It's a choice we've made, over eons. We can make a different choice. We just have to want it badly enough.

  6. Richard asserts that employees are not compensated for their risks. An equally plausible assertion is that the employees' compensation pays for their labor and their risk. If an employee feels they aren't properly compensated can always go elsewhere, and if Richard's assertions about co-ops is true, those disgruntled employees and risk their own capital and start a co-op and compete with the corporations.

  7. All good points by Professor Wolff regarding the general character of many of the firms by which many persons are employed. There are some exceptions, of course. There are some firms owned and managed by people who actually care about the people who work there and about the community in which they operate. One example that comes to mind is the Lincoln Electric Company, founded by John C. Lincoln in 1895. The firm was not a cooperative enterprise, but employees were paid based on their productivity and the firm established an Employee Advisory Board consisting of elected persons from each part of the company. Employees were covered by group health insurance. They earned paid vacations beginning in 1923. The firm established one of the first employee stock ownership plans in 1925. And, in 1934 (as the Depression deepened) employees received their first annual incentive bonus. Even as prices for the firm’s products fell during the Depression, worker pay continued to increase. All during subsequent recessions none of Lincoln Electric’s employees were released. Employees responded during periods of high demand by voluntarily postponing taking earned vacations.

    Some balance between sound business judgment and real concern for people has directed the decision-making of the Lincoln management throughout its history. There are other firms that have operated by principles respecting human dignity. It seems that the enemy of such principled enterprise is the issuance of shares of stock to be bought and sold by investors whose only concern is the rate of growth in the resale value of whatever shares they hold.

  8. What a retarded manipulation. If the company has a few bad years, workers do not get a pay cut, they do not mortgage their house to bring in money nor do they risk losing it all if the trend continues. They do not share the risk of the sharholders. They can go seek other employment opportunities if the pay does not meet their aspirations. But socialists will manipulate.

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