I would argue definitely public. Google market cap is over $500B. Anyone else who owns $500M would have the same incentive, so you would have at least 1000 owners, and almost certainly far more than that because the owners would want to diversify instead of investing their entire $500M into a company they don't even close to control.
> I also think that there's no guarantee that Page or Ford will, in fact, decide to prioritize something other than shareholder value.
There is no guarantee, but if it is to happen at all then that is currently the only way it can.
> An alternative approach would be, once the CEO's shares are worth $500M, they should start to increase salaries or issue shares to their employees or donate to charity or something, such that their personal ownership interest remains valued at $500M but they retain creative control (which they wouldn't if they let it go public).
Part of the problem is that because of the way taxes currently work, it's "better" (people pay less taxes) if the company's stock price goes up than if the company pays a dividend, so they tend to structure things to make that happen. So Page doesn't get proportionately that much "income" from Google in the sense of cash money (unless he sells his shares), but his net worth doubles with the share value. So if you want to keep the original owners in control of the company, but you want the company to be able to grow, then so must their wealth.
You could try to separate control from ownership, but who is going to invest in a company controlled by someone with no obligation to even try to grow the investment? If you want to help the world by donating your money to Elon Musk then you can already do that today.
> An alternative approach would be, once the CEO's shares are worth $500M, they should start to increase salaries or issue shares to their employees or donate to charity or something, such that their personal ownership interest remains valued at $500M but they retain creative control (which they wouldn't if they let it go public).
The problem is their wealth is derived from the value of the company. Larry Page doesn't have X billion dollars in cash, he has shares of a corporation with that market value. He (personally) could only donate it to a charity or give it to employees by liquidating the shares and divesting the ownership stake in the company.
The company could do those things to an extent, but if you're talking about a law to require that then it no longer has any real relationship to concentration of wealth or who owns the company. And you'll end up with all the same trouble with trying to measure the domestic profit of an international corporation that we have with corporate income tax.
> What if we rework the assumption that a publicly-traded company needs to maximize shareholder value at the expense of employee welfare?
The idea of a publicly traded company is premised on "maximizing shareholder value" because making money is the shared interest that binds the shareholders together. If you take that away then who gets to decide where the profits actually go? And who is going to invest in such a company if an undetermined party who isn't them gets to decide what happens to their profits?
> What if there was a rule that, say, any publicly-traded company needs to at least start with majority employee ownership?
"Start with" means nothing if it will change in fifteen minutes. Most companies do start with majority employee ownership. But if employees can't sell their shares then do they really own them? You could try something like giving the employees a vote (without an ownership stake) in electing corporate officers, but the result is going to be predictable. They'll elect people who pay the employees unsustainably high wages and the company will soon go out of business.
I can tell you how to fix a lot of this. The tax code currently makes it highly desirable for corporations to never repatriate their overseas earnings, because if they do they have to pay a very high corporate income tax on it. Which means they don't ever issue those earnings as dividends, instead they accumulate huge piles of cash. The shareholders don't mind that much (not as much as they mind paying high taxes) because holding cash raises the share price and shareholders who want cash can then have it by selling shares. But it means the only way to take profit is to sell shares, which for a controlling shareholder means ultimately giving up the controlling interest in the company.
People always talk about the cash hoarding problem, because it is an enormous problem, but the solution people suggest is a farce. People say to have a tax holiday to let the money come back into the US. And once in a while they do it... and no one takes advantage of it. Because not only was there a tax on repatriating the money, once it's in the US, all the future interest on the money will be taxed, whereas it isn't when the money is offshore in some tax haven.
The problem is, the only way to actually fix it is to not tax income. In theory it would be solved by only not taxing investment income, but that would be entirely unfair to people who are still paying income tax on earned income. What needs to be done is stop taxing income entirely and tax consumption instead. Scream about regressive taxes all you like; how progressive is it today when middle class people are paying 25% and investors and corporations are paying nothing?
With no income tax there is no reason not to bring the money back into the country, which puts it in the hands of human owners rather than huge corporations, without forcing them to sell shares that removes their controlling interest in their companies. At that point essentially all their reasonable choices for what to do with the money are good for society: They can spend it (and pay the consumption tax), or they can give it to charity, or they can invest it and grow the economy and generate tax revenue when the invested-in company spends it and pays consumption tax. Instead of having it sit in some offshore money market account managed by some corporate executive whose money it isn't, where it helps no one and no tax is ever paid.
Are you also suggesting a high estate tax, so that you're encouraged to spend or invest it instead of building up wealth for your family?
Of course. But weird taxes are very hard to get right.
You can basically order taxes by how progressive they are. The least progressive is a head tax; everybody pays a fixed dollar amount every year, income and consumption irrelevant. Next is a flat tax; some universally fixed percentage of total income or consumption. After that it isn't really a straight line: Luxury taxes, property tax, graduated income tax, etc.
The problem with everything more progressive than the flat tax is they heavily induce tax avoidance and often hit the wrong target. If you tax cars with big engines then wealthy people start buying trucks with big engines. If you tax trucks with big engines you end up hitting working class people. If you tax real estate then rich people invest in the stock market and working class people can't afford a home. If making more than $250K/year brings you into a very high tax bracket then people find all kinds of deductions and tax losses to take, or arrange for their $1M/year compensation to be paid as $200K each to yourself, your spouse and your three children. And so it goes.
The trick is to stop trying to outsmart people. The problem is the least avoidable tax, collecting the same dollar amount from everyone, is very, very regressive. But all we have to do to make a very, very progressive tax is invert the sign. Have the government pay everybody a fixed dollar amount every year. Basic income. If you pay for it with a flat consumption tax, which is the next least avoidable, the flat tax is more progressive than the head tax that the basic income is the inverse of, so you can make it however progressive you want just by changing the amount of the basic income. Then there is no tax avoidance to be had anywhere, no argument about what should be taxed or not, and everyone pays their share.
> Are you also suggesting a high estate tax, so that you're encouraged to spend or invest it instead of building up wealth for your family?
"Invest" and "building up wealth for your family" are synonyms. Estate taxes are silly. It's the same problem with separating owners from their businesses. Then the companies become incorporeal diffusely-owned soulless sociopathic conglomerates. Who cares if the family that started some chain of stores continues to own it forever? Care instead if people in the middle are better off than their parents were.
So some people here aren't completely against basic income. Some more good arguments in favor.
What you can do instead is just tax net worth as a flat tax (or a slightly graded tax), instead of taxing income. This impacts only those with a large positive net worth, and that makes more sense.
That solves the estate tax problem as well.
I think you're totally right that this motivates public ownership (or at least Larry Page selling his company to other private owners, once his shares are worth $500M), and that this doesn't seem to be usefully doing anything productive for economic inequality.
I also think that there's no guarantee that Page or Ford will, in fact, decide to prioritize something other than shareholder value. In fact the argument for allowing them to make profits from the company seems to rest on the argument that they should value shareholder value. An alternative approach would be, once the CEO's shares are worth $500M, they should start to increase salaries or issue shares to their employees or donate to charity or something, such that their personal ownership interest remains valued at $500M but they retain creative control (which they wouldn't if they let it go public). But we're assuming they won't choose to do that, and that selling their shares is more valuable to them.
And there's no particular need for this change (which is extremely disruptive) to be the only change to society. What if we rework the assumption that a publicly-traded company needs to maximize shareholder value at the expense of employee welfare? What if there was a rule that, say, any publicly-traded company needs to at least start with majority employee ownership? Or union ownership?
These are probably also terrible ideas, but my claim here is that we don't have to accept that the world as it is is optimal. There may be fairly fundamental changes we can make to our assumptions that result in a better place.