If you follow the news, read some of my articles, or did both, you are very likely familiar with the failings and greed of human CEOs and management. And you are also aware about the expensiveness of the two factors I named above. Considering that more and more is being automated, wouldn’t it make sense to automate the management too?
Starting Point
My inspiration for this idea was ignited by an article of Futurism, displayed here:
Futurism, on the other hand, cited the New Statesman which began to argue for it.
„According to the Economic Policy Institute’s 2020 report on CEO pay, the average American CEO earned 320 times as much as the typical worker, and that number has consistently climbed over the decades.
Excesses like that make a really good case for merely replacing executives with comparatively-inexpensive artificial intelligence, New Statesman argues. Executives are probably far more eager to automate lower-tier workers out of a job, but replacing themselves with machines could be considerably more cost effective — and make business more sustainable.“
If the AI is properly built and maintained, it could take out human biases and blind spots out of the equation. Moreover, putting several people in charge who assess the algorithm’s work instead of one individual (i.e. the CEO or manager) may lead to a more collaborative culture and well-thought-out course of action. Consequently, it could democratically revolutionize the workplace as well – especially in multinational companies.
Neither would it be the first that a an algorythm takesover the strategy:
„In fact, it worked out great when Hong Kong’s mass transit system put an algorithm in charge of its maintenance schedule in 2004, New Statesman notes.
Now, years later, Hong Kong is known for having one of the best-run transit systems on the planet, in part because it took management out of humanity’s error-prone hands.“
In order to visualize the wage gap between the average worker and a CEO, here’s a graph from Statista:
It comes to no surprise either that the increase in CEO pay happened after the 1980s – a time where neoliberalism (free market advocates) was at its peak heights with Margaret Thatcher (Prime Minister of the UK) and Ronald Reagan (President of the US) as the perhaps most prominent heads of the new mindset at that time.
The strong increase in income and wealth inequality subsequently followed.
Workplace Democratization and AICO
With all that in mind, it would make sense to cut the highest expenses – the CEOs. Surely, some ask themselves now who – besides the Artificial Intelligence – is going to lead the company.
After all, contracts have to made, humans are still required to react to extraordinary events – such as nature catastrophes – and other more complex issues. This is where workplace democratization comes into play.
Each worker is given a share of the company, thus creating an incentive to work more if the employee desires so. In this scenario, there’s a living wage paid to each worker which ensures that a decent life (e.g. an apartment, food, leisure activities) can be lived. The AI recognizes when someone puts extra effort into the company and, at the end of the month or quartal, said individual is paid a bonus on top of the living wage.
The AI Overseer Council (AI-OC) could be directly elected by the employees themselves. Of course, there’s much to consider and taking into account; detailed planning is a top priority.
They are paid a living wage as well, and depending on how well they do their job, the employees can approve with a majority a pay increase of the Overseer Council.
A human resource department, as well as other apartments, are still going to exist. Advisors can still be hired; the decisions, however, are made by more people.
Additionally, since more people are in the OC, it also means more opinions exist. A culture of conflict like in democracies would emerge, and while in the beginning there may certainly be more obstacles in the way, it would settle down over time once everyone got used to it. And, at no point during the process, are the incentives gone.
Note: That only applies to multinational and national companies, since they are also market-listed. Smaller companies are more democratic (more out of necessity*), due to employee and employer being dependent on each other. The traditional system with strong labour rights and labour unions should suffice, so they wouldn’t be affected by the system I have in mind. Lastly, it is about multinational corporations that already exist. How it will impact new companies that climb the latter is a topic for another day.
Closing
My original workplace democratization idea differs from the one I just elaborated on. It was fun to think about an alternative that may work too, though. In the future, some multinational companies may be democratized like that while others adopt a different model.
Addendum (2022-12-01)
Describing smaller companies as „inherently democratic“, as I did in thee previous version, is unfortunately not correct (I live in Germany, hence I had our laws in mind as well).
While there’s closer contact to the employee, democratic elements (if not already required by law or given the right through a law/laws) – if implemented – are likely the result out of necessity to maintain a healthy employer-employee relationship since the pool of potential new employees is very small. As already mentioned in the note, the traditional framework of labour rights and labour unions is therefore essential and sufficient.
Baroque 