Nationalizing companies is theft

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Photo by Copiosis

This is a continuing series publishing questions asked via our contact page or elsewhere. If you have a question about Copiosis, use the contact page and we’ll answer your question, then perhaps post a blog about it and include it in our Q&A page.

Someone recently asked “How will ownership of different company types (Sole Proprietorship, LLC, Limiteds and so on) be transferred into Copiosis?”

This is a good question because it asks  transition details many will soon ask. Let’s take a look.

For those not familiar with companies, in most places, companies are legal entities. They usually fall into one of several ownership types, described in the parenthetical above.

A Sole Proprietorship might for instance be a barbershop owned by a barber. It’s just him, his barber chair and equipment inside a rented space. The barber is the company’s legal sole owner.

A Limited Liability Company might for instance be a chain of barbershops. A group of people pooled their money, hired barbers, purchased equipment and rented spaces. Each investor partner (someone contributing to the money pool) legally owns a portion the company, usually equal to the percentage of the total pool an individual’s investment makes up. So for example, if I put in 50 percent of the money in the pool, I own half the barbershop.

Publicly owned companies or publicly-traded corporations are companies legally owned by public shareholders, which usually comprise large pension fund investment organizations investing on behalf of a group of people; and individuals investing their personal funds through a stock exchange.

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Publicly traded companies are some of the easiest to transition in Copiosis. (Photo by Markus Spiske on Unsplash)

How ownership changes

While these business forms differ when it comes to decision making and ownership, these details  largely are irrelevant at the transition. All companies, no matter their structure or form, have owners and they all have employees and they all have assets (and, usually, liabilities). So at the transition the process is essentially the same no matter the ownership structure: Ownership percentage determines who gets how much NBR.

So as transition nears, the Copiosis Organization gathers data about companies, their structures and ownership. Then each owner in each company gets an amount of NBR equal to their ownership stake. The net present value of the company divided by the ownership stake determines the value. So if that barbershop I own half of gets valued at $15 million, I get 7.5 million NBR.

 

For publicly-held companies (those whose stocks are publicly traded), shareholders are compensated the same way, based on the NPV of their current ownership stake (how many shares they own). It’s slightly more complicated than that, because we want to be generous with everyone.

We already know a public company’s value. It’s the share price times the number of shares. A share of stock represents current value, but also value over time because stocks go up and down. That value overtime can be projected. It’s that projected value we want to compensate so the owner feels they got the better deal.

IMG_3F3FF7E982AD-1For example, at the time I’m writing this, Apple stock trades at $304.78 per share. You’d think owning a stock of Apple at the transition would net you 305NBR. But in reality, there’s a value stream associated with that stock.

Let’s say several stock watchers project Apple stock would appreciate by 20 percent per year over the next five years. The Copiosis Organization would make sure you also get the net present value of that 20 percent appreciation per year over five years too. I’m using this calculator to do the following calculation. It’s for illustration purposes only.

 

Under my (potentially flawed) calculations, instead of getting 305NBR, you would get 2278NBR representing the current stock price (value) plus the NPV of the future value over the projection period. That’s how all compensation transitions would happen.

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We’ll talk about company debt in a separate blog post.

What happens next?

Once that compensation happens, all assets in the company are free of “ownership”. The former owners, being compensated, now no longer have a “stake” in the barbershop, or in Apple. So the equipment, chairs, clippers, supplies, etc. are all ownership-free.

However, someone must steward all that property, otherwise it will just sit there producing nothing. Things like car fleets, copiers, computers, servers, phones, manufacturing equipment and tools, supplies, furniture…all the things people in those companies used to do stuff sit idle benefitting no one if someone doesn’t steward them.

Solving this problem is where private ownership comes in.  In Copiosis ownership is stewardship, meaning, those owning things also own making sure those things get maintained and employed for humanity’s (and nature’s) benefit.

Back to my barbershop. I don’t know how to cut hair. I’m bald 😂. I couldn’t tell the

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So if that barbershop I own half of gets valued at $15 million, I get 7.5 million NBR. (Photo by Robert Penaloza on Unsplash)

difference between a hair gel and hair moisturizer!

But the barbers we employed could. Doesn’t it make sense for the clippers, shavers, towels, hair gels and all that other stuff be stewarded by the barbers?

It does to me.

But let’s say I don’t understand Copiosis and so I demand that I own all that stuff. I could say to the barber “ok, I’ll let you use this stuff while I go play. It’s still my stuff though. I’ll make sure someone comes and maintains it, but I get the NBR when you cut someone’s hair. Not you.”

Assuming the barber will go along with this (he likely would not), do you think I’ll get NBR when the barber cuts someone’s hair?

Of course not!

I didn’t do anything. I took no act which resulted in a freshly cut head of hair. The barber did all the work! So who do you think will be rewarded?

That’s right, the barber.

In this simplified example, I’ll get a little bit of NBR for the benefit I provided of letting the barber use my equipment. But the barber gets a larger reward because he’s directly responsible for beautifully coiffed hair, which the head’s owner really likes!

Some previous owners may act like me in this simplified example. As you can see, that’s ok, because the lion’s share of the reward goes to people actually making things happen.

So what am I, the equipment “owner” to do?

Think about it…

More than likely, I like doing things that excite me, things I’m passionate about. Sitting back getting a trickle of NBR from this barber won’t float my boat. I’m more excited about creating something big. So that’s what I (and probably other former investor owners) will do: figure out something we’re passionate about and do that thing.

Doing that costs nothing and we have a ton of NBR, so that’s not a problem. We have all our necessities provided. Why wouldn’t we do that?

That’s how owners are rewarded, which frees up company assets so they can benefit humanity. All without taking things from owners, or nationalizing a single entity.

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