Loss-making public organizations should be owned by their employees

This can be a solid way to achieve what the Government has failed to achieve until now: managing the responsibility of these organizations and making them produce profits instead of losses.

one of the biggest deceptions of the ideology, or philosophy, of liberalism, the ideology that has been ruling the world, and even Tanzania, since the end of the cold war, is that democracy is good but only if it is implemented in the political sphere, and not otherwise.

that democracy, at least the liberal one, i.e. the one we have here in Tanzania, is a good system for running the country - the presence of many political parties, regular elections, good governance, and so on - but we cannot use the same system to run institutions, or company, with the goal of makingprofit.

benefit, gain,  profit and 'democracy' here means an administrative system that gives people, whether citizens or workers, the power to run their own lives as they see fit for their own well-being and that of their future generations. in short, 'democracy' here is a system that allows people to govern themselves instead of being governed.

This logical contradiction leaves many questions. for example, if liberalism believes in the existence of a relationship between democracy and the economic development of a certain country, a relationship that even I believe exists, how can that relationship not exist between a company run democratically and the possibility of that company making more profit?

why should democracy be useful at the national, state, district and local level, or the village, the levels where we have been participating in choosing representatives, but not be useful in workplaces, places where, as workers, we spend a lot of time more of lifeours? Basically, democracy is very beneficial if it is implemented in the workplace.business management experts point out, without any doubt, that the performance of employees in a certain company doubles when those employees feel part of the company.

There is a lot that can be done to give employees this sense of ownership, one of which is to ask for their opinions and advice on the entire operation of the company, as well as providing them with real feedback, not fake, on the conduct of their company, including the production of profits and losses.

Actual ownership

But if the company can do well in the market for its employees to have a "feeling" of ownership, what will happen if the ownership is "real" instead of just emotional? What will the company be like if it is run democratically? in simple language, how will the company do in the market if its owners will be its employees?

The simple answer is that the company is more likely to perform better in the market compared to the one owned by an individual. Various studies show that there is a direct relationship between the company being owned by employees and the company doing better in terms of productivity and survival.

workers owning their own companies is an increasingly popular issue around the world, especially in an environment where job security is threatened by major technological advances, widening of the gap between rich and poor, and a significant decline in the well-being of workers worldwidearound.In Tanzania, employees owning their own companies is not something that is given much emphasis, whether by policy makers or even economists and other development consultants. in this country, the company should be owned by the dollar, i.e. the Government, which does not have the same meaning as being owned by employees, or it should be owned by an 'investor', i.e. an individual with the capital to do so.

in an environment where a company that was owned by the Government is doing badly in the market, for example it fails to provide services as expected, the best solution is to privatize the company by giving it to an 'investor.' The idea of ​​confiscating it to its employees is not on the table.

the government has always been doing this since the wave of privatization started in the country under the leadership of the second phase President, the late Ali Hassan Mwinyi, receiving very weak resistance from the people. the most recent example is the Government's move to give an 'investor' a high-speed bus project following complaints of failure to provide services properly.

before even the start of the privatization wave, the idea of ​​workers owning their own companies never attracted even Mwalimu Julius Nyerere, the first President of Tanzania, who preferred the dollar, or the Government, to own business companies. this is one of the arguments that Walter Rodney, a Guyanese scholar, points out in his 1980 essay on class conflict in Tanzania.

Tests

but this does not mean that there have never been attempts by workers, or citizens, to gather themselves and run their companies, or their communities, without the dependence of any 'investor'. although it is at a low level, the Union of Drivers and Conductors Dar es Salaam—Msata (UMAMADARMS), is one of the efforts of workers to own their jobs without the need of a 'boss.'

 

The history of the Ruvuma Development Association (RDA), also teaches the possibility of citizens coming together and seeking their own development without relying on politicians or 'investors.'

being established in the 1960s, RDA was a good story of what can happen when citizens join forces to solve their challenges, it was very successful until the Government decided to ban it in 1969! This history teaches us about what we can do to solve our current challenges.for example, at a time when several government-owned companies, such as Airlines, Railways, Telephone Corporation, and many others, are reported to be making losses of billions of shillings every year, despite being subsidized by the Government, we can consider privatizing them these organizations by owning them to its employees?Until now, the Government, which is responsible for providing these organizations with their leaders and management, as their owner, has failed to manage the responsibility of these organizations, a situation that leads the Comptroller and Auditor General (CAG) to report the losses made by these organizations this yearup to a year.It has reached a stage now until President Samia Suluhu Hassan has lost the desire to talk about these losses, completely refusing to speak while receiving the information from the CAG on March 28, 2024, at Chamwino Palace. for the Government, there are only two options: The Government, or the dollar, should continue to own these organizations, or they should be given to an 'investor.'

My advice is that we expand the scope of the available options by including the employees of these private organizations to run them democratically, including managing the responsibility of their leaders and management, a role that the Government has so far failed to fulfill.

if employees are responsible for choosing the leaders of those organizations, those leaders will be responsible for employees, including removal from leadership positions, a situation that will have a direct relationship with increasing efficiency in the operation of those organizations.

Of course, if the Government decides to implement this advice, it will have to form its own team of experts to evaluate it in detail and advise on the best way to implement it. the team can visit a few countries that implement this process, such as Spain, where the Mondragon Corporation has been exemplified as a good story of workers owning their own companies.

the team of experts can also assess the areas of need so that the procedure can be implemented properly, including education for employees that will make them realize their responsibilities as bosses-employees, but also the best way they can run the company's operations under the new procedure.

other requirements may be of capital that the Government can help workers to obtain, including from financial institutions in the country. if the Government can subsidize loss-making organizations every year, how can it fail to do the same for employee-owned organizations?

These organizations are owned by their employees, however, it does not guarantee that these organizations will do well and stop making losses; they will still have to face the challenges in the market and their success will come from the way they face those challenges.

however, the evidence shows that the benefits derived from employees owning their own companies, especially in the area of ​​employee interests and well-being, exceed those resulting from the company being owned by an individual.

An 'investor' may be willing to bring a machine into a factory that could lose the jobs of ten or more workers as part of his strategy to accumulate more profits. the workers, who are the owners, can bring the same machine to work fewer hours and have more time to do the things they love the most.

the idea is to bring democracy to the workplace, an idea that the ideology of liberalism strongly opposes, knowing that the decision will trigger the fall of the economic system that gives priority to the accumulation of profits at the expense of millions of others, leaving the workers, and the society in which they live, ina great pool of poverty.