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Eco123 Revista da Economia e Ecologia
Saturday 14th September 2024.
He should not be completely forgotten. 20 years ago, the great economist of the Prague Spring in former Czechoslovakia, Professor Ota Šik, died in exile in Switzerland. His ideas and conceptions of employee-owned companies could now be applied to the case of Volkswagen. Labour is a very important factor in the manufacturing process, together with capital, land and machinery (production facilities), and it should therefore enjoy at least a 25% share of the profits. For example, you use labour to make a car, or something else – a wardrobe, a pair of shoes, a colourful dress. Today, computers also play a crucial role in the production process.
In the Prague of more than 50 years ago, Ota Šik composed his economic theory of the ‘Third Way’, thereby enraging the old men who ruled the Soviet Union in Moscow. This was how he became responsible for running his country’s economy, as well as serving as deputy prime minister of Czechoslovakia. He went into exile when the tanks came, and from then on taught the economics of ‘humane economic democracy’ at the University of Sankt Gallen in Switzerland. He also made a name for himself as an artist, as he was also a gifted painter.
His innovative ideas and plans, together with the demands that he issued to the communist regime in Moscow to be allowed to run a more efficient and humane economy was a tremendous provocation for the old men of the planned economy, who were stuck in an impasse. Today, Ota Šik is once again a relevant figure when it comes to creating flexible management for supposedly failing companies. Volkswagen AG, which is still recording profits of 18 billion euros in 2023 and 10 billion euros in the first half of 2024, wants to throw workers out into the street and close individual plants. But, instead, why not reduce a five-day week to a four-day week in all VW plants? And why shouldn’t workers share in the profits and thus participate in the capital of their company? And if the economy picks up again, if an electric car from VW becomes a hit and can also be sold, then the five-day week can easily be reintroduced.
The share capital of an employee-owned company (MAG) based on the ideas of economist Ota Šik is neutral in regard to individuals or groups of people. It cannot be distributed to any individual (at VW, these are the Porsche and Piëch families, 53%). It belongs to the entire company collective or, as it were, to itself. There are no share certificates. Anyone who becomes a member of a MAG is automatically a co-owner; anyone who ceases to be a member and leaves the company automatically loses all rights and obligations. This avoids mobility problems. The company’s capital is created through a legally defined quota of newly-generated operating profits, which must be converted into this same neutralised capital. In this way, when the business is booming, the annual profits can be poured back into the employee-owned company or be saved as a reserve for bad times, instead of being distributed annually to stock market speculators as dividends.
Alexander Dubček, Prime Minister of Czechoslovakia in 1968, and Ota Šik, his deputy, met during the Nazi reign of terror in the Mauthausen concentration camp, where they were both imprisoned for having joined the resistance against Germany after the annexation of Czechoslovakia.
