Comments on: Open For-Profit Ventures can be open and equitable

By: @mikeriddell62

@mikeriddell62 — Sun, 03 Nov 2013 13:34:38 +0000

“The issue is, in many cases NOT about the precise legal form, be it “for profit” or “not for profit” as these are merely out of date proxies?—?but how equitable and efficient is the allocation of capital, how open & transparent is their governance and management, how ethical and equitable is their recruitment, payee and procurement.”

I would have thought that the overriding feature of any business these days (whether for profit or not for profit) is their dividend distribution policy. How the surplus is divi’d up is really what matters since everything else is subordinate, in my view.

By: Bob Haugen

Bob Haugen — Sun, 03 Nov 2013 10:18:28 +0000

I agree that non-profit orgs can be exploitative (e.g. huge executive salaries and other rip-offs).

But if by “profit” you mean a capitalist extracting the surplus, I don’t think you can make that equitable. A contribution economy with a democratically-decided value equation, where all of the income goes to the contributors (for example, Sensorica), would be equitable, and would differ from a non-profit.

By: H Luce

H Luce — Sat, 02 Nov 2013 18:26:33 +0000

“For profit” entails a legal duty for earnings growth, thus engenders competition amongst similar entities for a fixed amount of resources, thus engenders the search for comparative advantages and generally gives rise to cheating. This impetus does not exist in not-for-profit ventures because of the lack of duty to shareholders – but in that case, the BoD/CEO/executives may take the place of shareholders in using the not for profit as a cash cow to enrich themselves at the cost of their purported not-for-profit aims. The remedy in this latter case is to limit BoD/CEO/executive compensation.

By: Chris Cook

Chris Cook — Sat, 02 Nov 2013 13:25:41 +0000

The protocol – which defines the stakeholder relationships and allocates the ‘capital’ – is one aspect.

The instrument of finance capital is the other.

Here I observe the need for what I have long called ‘open’ capital as distinct from the closed/proprietary debt and equity forms/protocols and instruments of finance capital.

I think we are the end of a 300 year aberration from the undated ‘stock’ form of prepay credit instrument which are now re-emerging in use. Some say we are at the end of a 2000 year aberration of absolute property rights based on Roman law.