The corporation becomes unnecessary overhead if the company is owned by the employees, but then you have issues of what happens to the equity when an employee retires, and thus having an employee become a shareholder.
I think the word I'm looking for is a collective, and looking into the past, despite Valve I still don't think it works. The very idea has caused the deaths of millions of people implementing it.
I think Valve is a great idea; the idea being, the employees of the company get to decide everything in the company besides a few hard rules. Example:
Rule 1: shareholders get 50% of the profit.
Employees can decide how much is spent on profit-sharing schemes and salary versus how much to save for the company, to invest in new equipment, whilst following the rule. Employees dictate all aspects of business strategy.
Failure to abide the rule simply ends in the shareholders dissolving the corporation.
Ideologically it doesn't differ much from corporations you see today. The CEO, an employee, typically has free rein over the company until he does something really stupid, in which case he gets fired by the board. This "new idea" is simply making a hierarchical organisation a horizontal one, i.e. all employees are now co-CEO's. You still have leaders but they are distinguished neither by status or wealth.
Good reply. Like I said I figured I was being a bit naive in my post.
A horizontal company to a hierarchical one is akin to a group of amoeba compared to an animal.
As a group of amoeba grow, it simply splits into multiple groups. An animal will grow very big, much bigger than any single group of amoeba, but it is vulnerable. Stab it and it dies; once the central nervous system is dead, all other cells will die off eventually. You can't stab a group of amoeba. To kill amoeba you have to kill every single individual one.
Large companies today are much more likely to make mergers and acquisitions than to make divestments. Divestments are only made when a group within the company appears to be unlike any other. I think horizontal companies are more likely than large companies to make divestments. The only other horizontal company I know of, Semco, is an example that is evidence supporting this; it is a company controlled only by employees. At times it has split off its services as separate companies, with the separated companies remaining horizontal, and most of them are very profitable.
http://en.wikipedia.org/wiki/Ricardo_Semler#Semco_1990.E2.80...
Some conglomerates, like Berkshire Hathaway, also eschew structure, at least to some extent.
I think you're underestimating the value of those facilities and connections. That is the overhead.
Also, the time and labor is valued higher because they're employed together; that same time and labor would not be as valued outside the company.
Don't get me wrong, I think traditional corporate structures are often abominations and I think Valve is a great company. It just seems to me that if you take the spontaneous order philosophy to the extreme than corporations in general just become unnecessary overhead.