from independence to interdependence

When people start working together they will, quite naturally, start to behave as if they were a family. This principle applies to all forms of togetherness and is the basis for the inner cohesion and loyalty towards the organisation, be it a small business, a company, a town, a country, an international organisation or the whole world. When we ignore and forget the family-concept of any organised entity internal division and strife will be inevitable, sometimes with dire results. The family remains the cornerstone of society in all aspects. There is no such thing as independence, there is interdependence.

The fragmented view of independence opens the door to unabated self-interest and getting ‘something for nothing’. The present world economy has little to do with the real world. Our economic value systems have become infected by speculation on future values and bubbles. They have become instrumental in the dramatic fluctuations on the world stock exchanges and other financial markets. Speculation on the basis of fears and expectations has become artful and has grossly inflated the global value of the economy. Questionable debt can hardly be considered a good and sound basis for credit and credibility and is one of the sources of the present credit crisis.

Shareholder value has been ‘God’ for too long. It is high time we found a new balance. We have seen the failure of the communistic systems of ownership. Those systems created inefficient and outdated production units. Saddled with ambitious defence spending they were barely capable of producing basic needs. Since the eighties the capitalistic system began to focus more and more on share price and dividend return. Large investment groupings such as pension funds grew to hold enormous influence. Share price and dividend became all important and everything was fashioned to that end. Research and development and long-term strategies were sacrifificed t the short-term, for share price was paramount. The workforce, management, customers and the state (as receiver of taxes) were secondary factors. This one-sided view ignored the family concept of a company as a living entity and focused only on profit maximation for the shareholders, It also ensured that the financial analysts and credit rating companies would produce their reports accordingly.

When a major company made bumper profits the next thing it would do was to start a reorganisation and a cost cutting drive to ensure that next year profits would even be higher. Despite the profits people were made redundant and service to customers was further curtailed. This went on for twenty years or more. Now the system has come to a grinding halt.

It seems, therefore, of great importance that we reconsider the true ownership of a public company. Are the shareholders, as financiers of the company, the real and true owners of that company? The truth is that the workforce, the providers of risk capital and the state are all three involved. This threefold nature of ownership should be reflected in the company structure. The state is involved through the instrument of legislation but the workforce and the financiers should find a means to co-operate rather than compete for power in a company. This could be achieved by issuing certificates of shares and vesting the real authority in the board of directors as issuer of the shares. The nomination of the board should be a matter of further consideration.

Of course, a fundamental driving force in speculative activity has been in the realm of real estate. Indeed, one might say that it is the primary force behind the monetary excesses. The great attraction is location value, which is all too evident in the city centres. No individual or corporation creates this value, for manifestly, it is the creation of the community as a whole. Currently, this value – the natural fund of the state – is not collected, so the state collects its funds through taxes on production and wages. Clearly, this is an area that needs much more attention and investigation.

With a willingness to seek the causes of our present predicament, much can be achieved. With more balanced relationships within the corporate world more energy will be available for setting up a green and durable economy rather than a profit driven treadmill. Durability is the hallmark of a family. A family provides shelter for good times and bad times.


Paul G. van Oyen