Greedy Goblin

Monday, October 27, 2008

What are we?

Dechion wrote in a comment that "In Wow there can be a whole server full of level 70's, however in RL you can't have a whole work force full of CEO's."

I think it's a complete misunderstanding of our position in this game. The leveling (and gearing) is not a simulation of the real life carrier of a beginner worker to become a CEO. In this game we have never been workers and will never become CEO-s.

The people between the worker-CEO spectra are all employees. Employees are getting salary for working. They must follow the orders of their boss and if they do, they get their salary even if the project was futile (assuming their company does not bankrupt). They are responsible for following orders and protocols and not to reach any goal.

Employees does not risk anything they currently own. Of course by being useless they risk being fired but still they can keep their last salary or even retirement money. It was angering and saddening that top managers of the bankrupt banks got millions of dollars as salary in the last year, although their performance worth zero. This is not some evil conspiracy, just part of the system.

We all agree that the janitor of Lehman Brothers deserve to get his last year salary since he was cleaning the floor all time. Well, the CEO was signing papers and held meetings all year, so he did his job, he deserve salary just as much as the janitor. While morally we may disagree since we think the CEO could do something to save the bank while the janitor couldn't, it's a misunderstanding of the system. He was just an employee payed to hold meetings and sign papers. He is not responsible for his bank.

The CEO is not the opposite of the janitor, they belong to the same class, the employees. The opposite of the employee is the business owner. The business owner and he only has the power and therefor the responsibility to keep his business successful. He can hire and fire any employees from janitor to CEO, he can buy and sell parts of his business, can change anything in his business since he owns it.

The business owner as being owner risks his property to be lost if the business goes south. He can lose all his invested money, or can become very rich. He gets money if the product or service sells, so he is personally interested in being successful. So keep in mind:
  • Business owner: risks money, have power, interested in being successful.
  • Employee: risks nothing, follows orders, not (financially) interested in being successful.
We in the WoW are all business owners.
  • we have full responsibility for our actions. If we go to an ill-planned mission, we will lose our repair bill, all consumables used, and will not get compensation for it from anyone.
  • we are under control of nobody, we are in full control of our character. We can join and leave groups, we can pick up and abandon quests, we can choose which professions we pick, we can choose what to farm, what to buy and what to sell
  • we are personally interested in success since we get everything that the business produced. We will own the items we farm, we will own the money the questgiver gave and someone in the group (according to the mutually accepted loot rules) will own the BOP drop of the boss
We may enjoy this game so much because here we live the American dream, the dream of all non-slave-minded man. To be in control of our lives with all of its gains and losses.

Funny thing: Marx said that communism will come when the workers take control of the companies. Since a non-owner CEO is an employee, a worker, half of the industry, and all of the bankrupt banks belongs to the dream (nightmare) of Marx. Communism does not work! The companies controlled by an employee will and has to go down!

PS: One could say that in a raid the raiders are employees and the raid leader is the business owner. It's not true:
  • the raiders bring their own consumables, own gear, pay their own expenses. A worker don't bring table, computer and pens into his workplace
  • If nothing goes down (raid unsuccessful) nothing will be distributed. They will not get compensation money from the raid leader
  • If something goes down, the loot will not be owned by the raid leader but will be distributed among the raiders.
The raid leader is rather a corporate advisor you hire to give you technical help to your own business. He gives you no salary, he is not your boss, you follow his advices because you believe it's the smart thing to do.


Dradis said...

I would have to respectfully disagree with some of your assessment. The CEO, CFO, COO, etc are all directly responsible for the performance of the company. True they are employees, but they are decision makers and policy makers. They develop strategies and approve requests. In large companies like Lehman Bros, there is not a single owner. There is Board and there are shareholders. These are the owners. For the most part if the Board is making money and the shareholders are recieving dividends, then they don't care what is going on with anything else.

Further more, hiring and firing of employees can be controlled by the Executives more directly and efficiently then the Board and control the hiring and firing of Executives.

Had the Executives done their job better at each of the companies, we would not be in the situation we are in right now. They deserve zero compensation because the did NOT do their job. Quite the opposite.

The janitor on the other hand probably cannot even choose the brand of toilet cleaner he gets to use. He has zero control over the company. The same goes for anyone who is not management. The management has an increasing level of responsibility for the success and failure of any company as you move from lower management on up to the Executives. As such they should be compensated according to the position they held. The higher up you are, the less you recieve.

Just as an example, poor management at a local McDonald's can ruin that location until new management is put in. However, if those higher in the chain don't care, don't notice, or even find the performance level acceptable, it will eventually come back and destroy the reputation of McDonald's on the whole. Of course it would take a monumental effort to achieve that, but the financial sector figured out how to do.

Gevlon said...

@dradis: I'm completely aware that the CEO's job is decision making, to rule the company instead of the owners (usually stockholders who may don't even know the name of their company).

My point is this responsibility cannot be transferred to an employee. Since he is interested in his annual salary, he will take risky actions since the loss of the company value is not his loss.

In other example: in Eastern Europe, under communist regime, the companies were owned by the "people" (theoretically every citizen had equal share of stocks). The companies were directed by employee-CEO-s and this scheme caused the GDP of Eastern European countries to be just the fraction of the EU average. The only difference between this pure communism and Lehman-like scheme is that in the latter the individual stockholders had the power to sell their stocks if they disliked the CEO.

I'm also agree that they morally deserve no salary, still they got it. (

I think what happened to the Lehman and such is not mistake but inevitable consequence of non-owners leading the company.

Dechion said...

The more I read here the more I like it.

Well thought out as always. this whole series has really made me think. (and that could be bad since I am on vacation, lol)

One thought for you on the communism concept. Could not a guild, particularly since the advent of the guild bank, be considered a type of "collective"?

Granted you can leave whenever you wish. Also unless specific guild rules are in place you are not "required" to contribute to the guild as a whole. However on paper at least it would seem to be a group of people cooperatively working towards the same goals.

I don't quite see it that way, but would be really interested in your opinion on this one.

Taemojitsu said...

My understanding was that the financial crisis/depression/whatever was not due to mismanagement by any one company; it was a systematic failure due to lack of control of the risks in derivative financial instruments, or overspeculation with no ability to mitigate the inevitable market shift. The lack of regulation due to lack of agility of or incentive for agencies/governments to regulate the allowed financial instruments being traded and their risks. Maybe related to George Soros but I didn't keep up, sometimes I forget it happened 1-2 years ago. Maybe you could say it is the general reason for regulation of markets: inability to accurately predict risks and externalities of risks, or because no one was selling insurance for the planet Earth's economic stability. I think there was a blog entry on that, but I deleted it because it was bad or vague or another reason. *just in draft mode, "...a free market does not always result in the most stable or efficient of frameworks. Mitigation of risk in one direction may result in uncontrolled risks that are absorbed by the framework, until a limit is reached and the market's expectations reverse."

this comment is probably not worth publishing.