Interesting Question

The State is a condition, a certain relationship between human beings, a mode of behavior; we destroy it by contracting other relationships, by behaving differently toward one another....We are the state, and we shall continue to be the state until we have created the institutions that form a real community and society of men.

- Gustav Landauer, Schwache Stattsmanner, Schwacheres Volk!, June, 1910

Selected Correspondence:

12 July 2006

Practical participatory economics

There is a foundation (herein called "the Institute") which holds some of my copyrights and which I have used from time to time as a front, gently concealing my freedom from the social covenant. There are activities that the Institute should engage in that require substantial cash reserves. Normally NGOs beg, but I'm no good at that sort of thing, so the the Institute has created an offshore startup company ("") to fund it.

This little seed has pushed through into the light from the dark loam wherein ideas are born and now calls for gardeners and manure. To supply them the Institute will pool auction off 40% of the company over two months (i.e angel investors get their investment / total investment of the 40% auctioned) to anyone who will invest. There's no higher reason for this approach, it is a method of gaining initial funding.

There are two dilemmas (di-lemma = "two truths". 2 dilemmas = 4 truths).

The investment. It is a great blessing to have courage and foresight that results in wealth producing rather than wealth destroying acts. However foresight is limited and the connection between dividends and the intelligence of the original investment, assuming there ever was one, slowly dwindles to zero, whittled away by fate's unrelenting peturbations of man's activities; above this plunging donkey, dividend payments may soar exponentially till they yearn for the Islamic opprobrium on unearned wealth. Now this very possibility, this pleasant vision of pocketing of the dividend fatwa, increases investment without increasing investment discrimination unless some investments can be seen to exclude this eventuality.


There is thought of engineering investments so that after a substantial return, dividends are transformed into a donation to the Institute or some other charity, but this will reduce total investment, perhaps resulting in a net evil, since we define the Institute's ability to act as a good. Examining the extremes, we see immediately that if the company makes nothing, the Institute makes less than nothing and the investors make less than nothing while if the investors receive substantial unearned wealth, then the Institute is well funded and able to act. But wealth flows from the ongoing daily labors of those running the startup. Here we see the disparity. Their labor is ongoing and connected to wealth production at all times. Individuals who start companies try to minimise share dilution while maximising investment. While larger companies will sell bonds or borrow at market rates, startups succeed in attracting investors to their roulette table by offering the carnal vision of l'amour without l'commitment. Can we reinvent the bordello? This brings me to the next dilemma.


How should employees, if that word is not too psychologically confining, be compensated for their time and abilities? "anyway they want to be" for supply and demand works for novel compensation schemes just as it works for traditional wages. So my question becomes, 'given that the founders loathe paperwork & consensus and need to satisfy investors that their investment isn't going to be entirely returned in form of employee stock options, what is left to offer employees? How can their hearts be opened to the new?'