Mono(poly)type

riccard0's picture

Ascender Corp. Acquired by Monotype Imaging:

http://www.ascendercorp.com/pr/2010-12-08/

Update 10.Nov.2011, (part of) Bitstream (MyFonts included) Acquired by Monotype Imaging:

http://typophile.com/node/87262

twardoch's picture

John,

Unfortunately, I’m not able to answer your specific question. However, I’ll try to help. First, let’s have a look at how companies work, in a somewhat simplified model:

1. You want to set up a company.
2. Usually, you need money to finance your operation. That’s called capital. You find capital: either you invest your savings (in which case you’re the owner, i.e. sole shareholder or stockholder), or you take up a credit at a regular bank (in which case you’re also owner but have a credit running that becomes part of your expenses — but we’ll get to that later), or you sell shares aka stocks of the company (then you have other shareholders/stockholders, i.e. co-owners).
3. You can offer the shares to an investment bank, in which case it becomes the shareholder or co-owner of your company. Or you can sell the shares to some selected individuals. Or you can offer them for public trading (so-called IPO).
4. You set up a business model. You have expenses and you have revenue. If you’re selling some vendors’ products, you typically offer the vendors a deal: a part of the revenue (your first expense) goes directly to the vendors.
5. The other part of the revenue (your commission) covers your other expenses: office rent, revenue taxes, reserves, investments, payroll for employees, consultants, payments to contracting companies and other “cost of operation”.
6. The revenue minus the expenses equals profit. You perhaps pay some taxes off the profit, and then you distribute the profit to the shareholders (i.e. owners) as a dividend.
7. As long as your company is a publicly traded company, anyone with some spare capital is free to buy the stocks from existing shareholders who are willing to sell them. At any time, employees, consultants or vendors can become shareholders as long as they buy the stock.
8. You continue to run your business as long as you decide to do so.
9. If you decide to stop running the business, you negotiate with your shareholders a potential sale of the shares, and negotiate with prospective buyers.
10. If the negotiations with both parties work out fine, the transaction happens: the buyer acquires the shares from the shareholders (i.e. owners), and becomes the new owner. The former owners i.e. shareholders receive a payment.

To sum it up, there are typically three groups (roles) of people who contribute value and receive money in exchange while a business is running:
a) Vendors contribute their goods and receive payments as part of the business deal outlined in item 4.
b) Employees and consultants contribute work, contracting companies contribute services, and they all receive payments as part of the item 5.
c) Owners i.e. shareholders contribute capital, and they receive payments as part of item 6, and — should if items 9 and 10 occur — as part of 10.

As I wrote above, the roles listed above can be interchangeable: vendors, employees, consultants or contracting companies are free to become co-owners or shareholders as long as they contribute capital. If they do so, they become recipients of the payments in items 6 and 10.

> So how much of that $50 million is going to be shared with the people
> who generated the value that Bitstream are now cashing in on?

If you’re a shareholder of Bitstream — which has been a company traded publicly in the U.S. (NASDAQ symbol "BITS") — I assume that there are appropriate channels where you can find it out. I’m not a shareholder of Bitstream and am not involved much in stocks trading in the U.S., so I cannot answer your specific question.

Some information about the acquisition can be found in the Bistream press release and the Monotype Imaging press release. Also, according to Google Finance, Bitstream currently has a market capitalization of approx. $57.7M. You may also find the SEC 8-K filing summary or the actual SEC filing materials (1 | 2) interesting.

But I hope I was able to clarify the issue a bit, and provide you with some pointers to where and how you can find more information! :)

Best,
Adam

5star's picture

Hey yo, I'd like to take this opportunity to give some well earned kudos to Monotype Img.. I own a successful company (it was two separate companies but I merge them into a single company, but still feels like two for me. First one I started in first year uni way back in '91) so I know a thing or two about survivability.

TYPE is up three bucks from their common share IPO - is that about right? And a healthy market cap to throw around town too. That's pretty good in today's environment - so ya kudos for building a solid day job!

Nick Shinn's picture

So how much of that $50 million is going to be shared with the people who generated the value that Bitstream are now cashing in on?

Why would I expect a cut from my distributor when that business changes hand?

It's their business, not mine, which I still have.

It could also be said that Bitstream has generated a large part of my business's value, as a major distributor—and I don't intend to share any of its value with them.

However, IMO fonts are worth considerably more than three times annual revenue, which is a rather generic or default multiplier.
But you get what you can, and that goes for both parties involved in the deal.

dberlow's picture

Quiet and peaceful day too. What piece? What system? What's blather? ;)

mjkerpan's picture

So what major foundries are left after Bitstream's assimilation? All I can think of are Font Bureau, P22 and Berthold...

.00's picture

Thank goodness that is all you can think of.

Bert Vanderveen's picture

@mjkerpan

There are over 300 type foundries in my bookmarks directory… A substantial percentage of those sell their own products. So… not all are major, but together they probably equal the new MT-entity.

John Hudson's picture

Adam, I know how corporate capitalism works. As you may have noticed, Tiro tries to operate in a different way. I believe -- doubtless to my own financial detriment -- that the people who create value should share in the returns on that value to a proportionate degree, and that one shouldn't seek to profit from the labour, skill and creativity of another person except insofar as you add value to what is produced (a distribution system adds value, for instance, but is of its nature secondary to the production of the thing distributed). So when you acknowledge that 'the foundries did all the hard work anyway, and truly are the ones who generated the value', I'm bound to ask what share those value-generators get of the income from the transfer of ownership of that value. I know they probably won't get any, because Bitstream -- like most companies in the capitalist system, as you describe -- is set up in a way that rewards people who have had no direct hand in the creation of the value, but have only wagered on the ability of the people who have.

Meanwhile, here we plug along trying to make good things and sharing the profits among the people who contribute their labour, skills and creativity, 'cause that's how we roll.

twardoch's picture

> However, IMO fonts are worth considerably more than three times annual
> revenue, which is a rather generic or default multiplier.
> But you get what you can, and that goes for both parties involved in the deal.

Nick,

please note that according to the current NASDAQ stats, Bitstream’s current total market capitalization is some $57.7M. Total market capitalization means: the total price which the market participants would be willing to pay for all of Bitstream’s stocks. In recent times, the BITS stock price was on a slight declining course, with no major changes. Of course the “total market capitalization” is a bit of a fictitious value because if the stockholders offered all the shares for sale on the open market at the same time, that price would not be achieved. But given that the Monotype merger has not covered all of Bitstream (i.e. the Pageflex and Bolt businesses are being spun off), the $50M sum seems rather close to the stock value.

So — while I don’t really have any actual knowledge about this whatsoever — it seems to me that the price paid at the merger has simply been a fair reflection of the current market value, not necessarily based on the annual revenue multipliers. In that respect, I don’t see anything “sensational” (either way) happening.

Best,
Adam

Mark Simonson's picture

MyFonts does not have exclusive access to the value font makers add to its business. And the value goes both ways. The value to MyFonts to me, as a font producer, is its excellent website and customer base. I signed an agreement with them where all the terms were spelled out, and I don't remember seeing anything in it about paying me some kind of bonus if they changed hands.

I love MyFonts and I just hope they can keep doing what they do so well.

Nick Shinn's picture

@John: (a distribution system adds value, for instance, but is of its nature secondary to the production of the thing distributed)

It does way more; in the case of MyFonts, it has enabled a great many foundries to be founded and create fonts, which wouldn't have existed otherwise. MyFonts type tester, which shows OpenType features, has been a stimulus to the production and dissemination of OpenType-featured fonts; and if I am wrong about its primary agency, at least it is part of the economic micro-system which furthers that cause.

…the price paid at the merger has simply been a fair reflection of the current market value, not necessarily based on the annual revenue multipliers.

If that is the case, the market has been distorted by the relative size of the players here—in particular Monotype, which has a strong negotiating position due to the lack of other potential purchasers.

Surely a typeface that pulls in revenue over many years should be valued on that basis.

John Hudson's picture

Fair points, Mark and Nick.

mjkerpan's picture

I wonder if Bitstream will continue to have the fiction of an independent existence a la Linotype and ITC or if it will simply assimilated into the Mono-borg.

Richard Fink's picture

I like Hudson's link. "This video kills fascists" it should say. Cool. The union movement is given short shrift these days, and that's unfortunate.

William Berkson's picture

The value of creating markets, which Mark and Nick point to is only one problem for Marx's labor theory of value, which you have alluded to, John. While it has a moral appeal, it has never worked as an economic theory. For example, in order to price your fonts you would have to include the labor of all those involved in inventing and producing your computer, the software, the internet, the books you've read etc., etc. Nobody has ever made it work. Making capitalism more just and human is a crying need, but for anything that will actually work, I think you'll need to look elsewhere than Marx.

Si_Daniels's picture

>wonder if Bitstream will continue to have the fiction of an independent existence

Interesting choice of words. Would you consider the Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, and Skoda brands fictional because they are part of Volkswagen AG? If a brand has value it will be retained.

dezcom's picture

Unless that brand is called "British Leyland" :-)

Té Rowan's picture

*puts face in hands* . . .

John Hudson's picture

Bill, I don't think I alluded to Marx's labour theory of value, although I think its 'moral appeal' lies directly in the common sense appreciation that value is created by labour and, although the total value of a thing cannot be calculated from this basis, to deny it is, at least, morally unappealing.

I'm not looking for an economic theory, I'm looking for a way of doing business that puts profits into the hands of the people who make things: not instead of into the hands of people who finance things, but more equitably distributed, so that capital -- and its corollary, power -- is concentrated in fewer hands and more people can have a greater say in how their lives are organised and to what end. Capitalism left to its own devices will never become 'more just and human', because neither justice nor humanity are its concerns. When individual capitalists behave in ways that are just and humane regardless of the effect on financial return, they do so contrary to capitalism, out of personal beliefs that are, at best, orthogonal to capitalism and frequently in opposition to it. Such beliefs can be a starting point for reform, but only widespread structural change is going to humanise economic activity. I believe this structural change should subsist in worker ownership, whether directly (roughly how we run Tiro), through cooperatives, or in joint ventures (there is a successful pulp mill near here that is jointly owned by the workers and a group of private investors). Where such businesses have been established, they compete in the same market as capitalist businesses, which is ample evidence that commercial activity is not reliant on the capitalist class, that the free market may be just as free -- or more so -- without them.

Eighty years on, Quadregismo Anno remains pertinent reading.

Richard Fink's picture

@db

Surely you remember Gracie Slick's song lyric, "Blather was thirty years old today."

Oh, yeah, it was "Lather". Sorry.

dezcom's picture

MyFonts foundries just received a new email explaining the acquisition. The line that I find troubling is:

"When foundry contracts come up for renewal, we will of course revise the contracts to reflect the new ownership."

Richard Fink's picture

Perhaps that's just the "official" way of saying they'll change the name and address on the top of the page. "reflect the new ownership" sounds more technical and serious.

But the fact that you're reading into things of that nature doesn't bode well for them.

Check out Fontspring, or one of the other smaller distributors. They're just as web-savvy, commercially ambitious, and certainly as innovative as myfonts.

Nothing lasts forever - especially market dominance on the web.

Nick Shinn's picture

Nothing lasts forever…

But “Trajan” is giving a good impression.

dezcom's picture

But Nick, Trajan really is etched in stone ;-)

blank's picture

Chris, that essay also points out that royalty rates will not change, if that is what has you worried.

dezcom's picture

"...also points out that royalty rates will not change"

I hope you are right in your interpretation, James.

Jan Middendorp's picture

John,
In a post-industrialist service-oriented society, how do you define “making things”? Isn’t a website, a database, a user interface or, more abstractly, a user experience, also a “thing” that somebody has made, and invested a lot of know-how and time and creativity into? What people get for their money when they visit a website is not just this “thing” called a typeface or a book or a toaster, it is also their buying experience, the information provided, and perhaps quick and good service if something goes wrong. A distributor like MyFonts offers these things and seems to do a good job at it. Is it part of the product or isn’t it? It seems to be part of the reason why people come back, so it’s part of what people are willing to pay for. If a designer/foundry is not very interested in providing all of that, then they can either try to sell their “thing” as is, without the same quality of experience attached; but they might be doing users a disservice, or simply not reach any users. Or they outsource that part of their product, and pay a commission based on the success of the service (i.e. sales). Why would producing this service at a mutually agreed price be in any way unethical or redundant?

You seem to argue that service is, in any case, of a lower order than “things”. I don't want to get into that. Much of my work is a hybrid of both; and I think that valuing the part of my work that results in something tangible higher than the part that results in somebody smiling or nodding, would be … counter-productive.

Btw, a typeface also has an abstract component. It implies, or provides, a user experience which can be good or not so good. This is independent of its actual drawings, the stuff that you can see and almost touch and that makes it most similar to a “thing”. In fact, that part (OT programming, Unicode compatibility, etc.) is quite similar to user interface programming. Less thing-ness, but just as crucial to the experience. Which takes me back to my initial question: define “thing”.

William Berkson's picture

John, there are a lot of questions that are important and too demanding to get into depth here, aside from the fact that I'm not knowledgeable enough to do it well.

But two points anyway. One of the discoveries in my wife's book Success in Agricultural Transformation is that the Left has made the mistake of thinking who owns what is the key issue. I think you're making that mistake. The mistake on the Right has been to think that income inequality doesn't hurt anything, which is also wrong in a big way.

The other thing is that the minimizing the value of the services of the merchant, which I'm not sure you meant to do, but it sounded like it as Jan mentions, is wrong both economically and morally. The services are very real economically, as MyFonts in fact seems to indicate. Morally, the devaluing of the merchant, the seeing of the merchant's cut of the price of goods as an ill-gotten gain, can get very ugly. It has been used to justify riots and murder against minority merchants all around the world: Jews in Europe, Chinese in Southeast Asia, and Indians in Africa.

dezcom's picture

As with all things, the particulars make the difference. The percentage of sale price paid to the individual type foundries with MyFonts, to date, has been reasonable. This is one of the reasons for the success and the feeling of partnership in the working arrangement. With this fair share per sale model, I see no reason to divvy up any portion of the $50M sale price of MyFonts organization with contributing foundries. I see it as we have been paid monthly all along just as promised.
In the recent past, there have been (and may still be) arrangements with larger resellers where the percentage of sale price received by the designer foundry has been far less to the point of seeming unfair. With MyFonts, this has not been the case. MyFonts makes no claim of ownership of the intellectual property nor does it set prices. Further, there are no binding exclusivity clauses. Those of us selling through MyFonts are not taking a risk.
My hope is that all of this continues. I hope that: "When foundry contracts come up for renewal, we will of course revise the contracts to reflect the new ownership" does not mean any changes in either policy or rates or contractual expectations. The Bitstream folks who sold off the MyFonts assets have every right to their $50 M. I certainly do not feel that I am owed any portion of it.

Jan Middendorp's picture

The merchant, right. That’s a simpler way of putting it.

Also, what may need to be clarified: while Bitstream as a foundry owns a number of original typefaces and their trademarks (like those designed by Carter, Unger, Dennis Pasternak, Holly Goldsmith), this is not the case for MyFonts. MyFonts’ dowry, so to speak, consists of a system, a brand identity, a lot of code, the goodwill of customers and foundries, and a team of people — part employees, part freelancers. No typefaces will change hands apart from Bitstream’s.

twardoch's picture

John,

if you look through the SEC filing documents, you’ll discover that one of Bitstream’s stockholders is an investment firm that otherwise invests mostly in hotels and resorts, and their website advertises mostly to senior U.S. citizens. I don’t want to go into a detailed discussion about investment firms, but one simplified view of the situation can then be described like this:

A number of U.S. senior citizens have put the money that they have saved over the years into an investment firm, which then bought Bitstream stock and provided capital to run the MyFonts operation. For the first few years, setting up and running MyFonts cost more money than it generated. It was those senior citizen’s risk to put their money at our disposal (indirectly, of course, through the investment firm).

We could have screwed up or we could have done well. In that time, those investors saw little or no money coming in, but the employees and consultants as well as the foundries who offered their fonts for sale, have been constantly paid.

In other words (in a very simplified way), for the first few years, some U.S. senior citizens financed my living (as a MyFonts consultant). I contributed labor, and I have been rewarded. It has always been my choice or right to try negotiate my payment terms. I may or may not have made use of that right. But, since I did agree, it means that I did agree. I have been paid constantly for the last 11 years for the labor I contributed. I did not need to care where this money came from.

The same was truth for the other employees or consultants, and for the foundries. They have received their checks regularly.

The investors, however, put their capital on risk: they had a chance of "cashing out" or they had the possibility of losing everything. (Of course, they did trade the stock between themselves etc., but at every single moment there was a group of investors whose money was being used by Bitstream to operate MyFonts, and it was their money that was at risk.)

At some point, Monotype Imaging offered the $50M, and that money can now flow back to the investors. Whether it’s a big cash out or just moderate, or actually just so-so, or perhaps it’s even less that they invested — I don’t know. And I don’t care. They put their money to our disposal so we could work. Now they’re getting some money back. I actually do hope that it’ll be more than they invested. I hope that it’ll be *significantly* more than if they invested into some other business.

They chose our stock. They didn’t choose Apple’s, Microsoft’s, Nike’s or whomever else’s. And for that, they should be rewarded as handsomely as it is only possible. Because, on top of our brains and time spent, and in addition to the hard work and talent of the type designers whose fonts we’ve been selling, we also owe our success to the investors, since they provided us with capital.

(At any time I could have chosen to buy BITS stock, i.e. become part of the investors group.)

To me it does sound like a fair deal. The investors are getting their money, the foundries have been getting theirs, and I’ve been getting mine. I think, I’ll continue to be paid, as long as I contribute my labor, the foundries will continue to be paid as long as their existing or new fonts will be attractive to the buyers, and the investors will continue to have a chance to be paid as long as they contribute their capital.

I don’t see anything fundamentally wrong with the system. There are many details that are worth working on, but I do believe we need all components of the system. We need labor and we need capital.

Best,
Adam

William Berkson's picture

Adam, I agree with your analysis.

I think the problem is that wherever there are large amounts of money involved, such as in banking or stocks, there is tremendous opportunity for corruption and exploitation. To prevent this requires strong government regulation, progressive taxation, and enforcement. Unfortunately these have failed often the past 30 years, partly due to campaigns against them in the name of the "free market." I think this is what makes people extremely suspicious, even when capitalism is working well, and to the benefit of many people.

John, concerning the issue of whether ethical business practices are inherently anti-capitalist. I interviewed the great industrialist Aaron Feuerstein, who paid all of his workers for a year after a factory fire, until the factories were rebuilt. He has been held up as the model of an ethical capitalist. He told me that you can combine ethics and profit, but it takes a lot of creativity and courage to do so. I hope he's right.

Nick Shinn's picture

The Long Tail principle often referred to with regards to MyFonts has an added relevance for fonts: the length that font products remain viable commodities. Consider Bitstream's Font Odyssey 2, published ten years ago. Without revealing too many trade secrets (Shinntype participated), I can say that sales have followed the Long Tail curve—the point being that they were not exhausted after three years, despite the product not being updated.

Several Bitstream types (not the the originals Jan mentions!) are in the Myfonts top 20 — versions of Helvetica, Futura and News Gothic. Those would have been worth more to a company other than Monotype/Linotype.

Nick Shinn's picture

@Adam: …but the employees and consultants as well as the foundries who offered their fonts for sale, have been constantly paid.

However, foundries too have not immediately recouped their investment, which was in font development.
And font development is a risky business, as it's quite possible to put a lot of time into a typeface that sells very few licences.

John Hudson's picture

Jan and Bill, note again that I was responding to Adam's statement that 'the foundries did all the hard work anyway, and truly are the ones who generated the value'. Now, as you and others have pointed out, this is not actually the case, and the MyFonts staff have also created value and, by financially facilitating the activity of that staff, so have the investors. They have all generated value, through a combination of products and services. My belief, though, is that everyone who contributes to the generation of value should receive a share in the profits of that value proportionally equal to what they contribute.

I am not suggesting that, under the present arrangement, MyFonts should divvy up the $50 million in this way. I am questioning the present arrangement, which is based on a negotiated inequality among the creators of value. Chris and others have expressed their satisfaction that 'the Bitstream folks who sold off the MyFonts assets have every right to their $50 M', and that's an entirely legitimate view that I don't challenge, and I fully agree with Chris that the MyFonts contract and royalty model is much better than that offered by many other resellers or foundries. MyFonts has been, on the whole, a good thing for type. But here's an idea: when the products and contributed marketing materials of a vendor contribute substantially to the value of a corporate asset, wouldn't it be a good thing if the vendor contract made provision for dividends from the sale of that asset? This isn't even a negative for the corporation, since it can be used as a means to encourage vendors to continue to sell their products through the reseller's service, by linking the dividends to active contracts.
_____

Bill, ownership becomes the key issue when ownership of the means of production by capital has such a strong tendency to exploitation of the non-owning worker. Sure, it isn't a philosophical issue: one can imagine a capitalist economy in which all the capitalists were really nice people who believed in a more equitable distribution of wealth and acted accordingly. But that isn't how they act, nor how they have acted, in any significant numbers, for the few hundred years in which they've been doing their thing. So it is a practical issue. For the past hundred years or so, unionism and sometimes governments have tried to ameliorate the inequality while maintaining capitalist ownership. The result, in case you have not noticed, is that wages, in real spending terms, have decreased over the past half century, the inequality has grown more extreme not less. The bail-out swindle by which profits are privatised while loss is nationalised, by which the most profitable sector on the planet holds nations to ransom and forces taxpayers to cover its bad gambling debts, is simply the latest round of what as Warren Buffett rightly describes as a class war by the rich against the rest of the population. I see no evidence at all that this will change or improve without an increase in worker ownership.

If you visit cooperative, worker-owned or hybrid workplaces, you'll find that it is, in fact, the key issue that transforms the nature of work from one of servile indebtitude -- I must do this job and not rock the boat because otherwise I will be unable to feed my family -- to one of active agency -- I do this job because I have a stake in this business and am share in its success.

John Hudson's picture

Bill: ...concerning the issue of whether ethical business practices are inherently anti-capitalist. I interviewed the great industrialist Aaron Feuerstein, who paid all of his workers for a year after a factory fire, until the factories were rebuilt. He has been held up as the model of an ethical capitalist. He told me that you can combine ethics and profit, but it takes a lot of creativity and courage to do so. I hope he's right.

It also requires the will to do so, which is what seems to be mostly lacking. And note that I didn't say that ethical business practices are inherently anti-capitalist: I said that they were contrary to and, at best, orthogonal to capitalism. By this I means that while not incompatible with profit, they will tend to reduce profit, which is why creativity and courage are required.

William Berkson's picture

John, ownership of the means of production by the government has also proved, contrary to Marx, to be highly vulnerable to exploitation of workers. That's why focusing on ownership misses more important factors. In studying agricultural transformation all around the world, throughout modern history my wife found failed and successful examples with government ownership and private ownership, small and large farms, etc.

Your citing experience in the past 50 years is misleading. In the US, before FDR there was extreme inequality. From FDR through about Jimmy Carter, greater equality held. From Reagan on—the past 30 years—the inequality has increased. This is because of government policies, as Paul Krugman explains in his book Conscience of a Liberal. Contrary to what you say, mixed capitalist and government ownership economies, such as we've had in the West, can work without the the extreme exploitation you've pointed to. Employee ownership also has a mixed record, in reducing exploitation, from what I've heard. So it alone isn't a magic bullet.

As far as ethical practice tending to reduce profit, I think that's wrong as a general rule. Building relationships of trust among partners in an enterprise, which ethical conduct achieves, generally promotes profits—an argument made to me by Feuerstein, and which he actually did benefit from monetarily, in specific ways. It is also true that being ethical can at times run contrary to short term profits, as Feuerstein also conceded. So ethics can cut both ways. The creativity is to find a path where you take advantage of the profit-enhancing aspects, and minimize the losses. I think that's Feuerstein's view, if I got him right.

Richard Fink's picture

>But “Trajan” is giving a good impression.

Funny! But "on the web" I said.

Nick Shinn's picture

Pardon me for the irrelevant type joke.
Try this instead:

Nothing lasts forever - especially market dominance on the web.

Tell that to Jeff Bezos.

John Hudson's picture

Bill: John, ownership of the means of production by the government has also proved, contrary to Marx, to be highly vulnerable to exploitation of workers. That's why focusing on ownership misses more important factors.

That doesn't follow. I never said anything about state ownership of the means of production: I talked about three different practical models of worker ownership of the means of production, including one that involves shared ownership with capital investors. The fact that both capitalist and state ownership of the means of production tend to exploitation of the workers suggests to me that anything other than actual worker ownership will tend to that exploitation. Yes, there are other factors that should not be overlooked -- including bureaucratization, resulting in a division within worker owned businesses between a management class and a labour class, which is a criticism that has been made of the Mondragon cooperatives by some commentators --, and I don't think worker ownership is a 'magic bullet'. But I do think there needs to be an increase in such ownership, that financial services should not be biased against such ownership as they are now, and that an accounting of value needs to include a reasonable consideration of the contribution of labour and corresponding reward. [Note that this is something quite different from a Marxian labour theory of value, which seeks to establish value by reference to labour; I'm talking about a multifaceted estimation that tries to account for the ways in which different people contribute to commercial value.]

Contrary to what you say, mixed capitalist and government ownership economies, such as we've had in the West, can work without the the extreme exploitation you've pointed to.

Because thousands of men and women shed their blood to win the eight hour day, the weekend, collective bargaining, universal suffrage, labour law, and the other ameliorating checks against such exploitation. None of these things were handed to the workers by capitalists: it has all been fought for, and frequently died for. And these are precisely the hard-won checks on exploitation that today's capitalists, with the collusion of bought-and-paid-for governments, are systematically dismantling.

Richard Fink's picture

@nick

>>Nothing lasts forever - especially market dominance on the web.

>Tell that to Jeff Bezos.

I think you're holding up Amazon's continued success as proof positive that the statement "nothing lasts forever - especially market dominance on the web" is wrong-headed. Or perhaps simply that there are exceptions.

And so I think you're confusing cause and effect. It's exactly because Jeff Bezos looks at it exactly that way that Amazon has, so far, continued to succeed.
He already knows, I don't have to tell him.
Their position is extremely fragile - essentially just another vendor on the web. And I wouldn't be surprised if that fragility is the first thing to enter his mind in the morning.
They've stayed on top through a seemingly endless series of experiments and innovations, always running, running, running, as if they were being chased by something.
And, indeed, they are.
I've got more respect for Amazon than any other company connected with the web. Somebody or somebodies there are geniuses on a par with Steve Jobs.

Tell it to the former management of Sears Roebuck, maybe! Or Harold Geneen.

The web's only 15 years old, that's not a lot of time. Wait.

Everything reaches it's limits.

dezcom's picture

Some of us enjoyed your "irrelevant type joke" ;-)

Richard Fink's picture

@nick

Better example than Sears: General Motors. No company fell from a height so great in the course of just a few decades than GM.

And not so long ago, AOL WAS the web. And today, I really don't know what they are - except an email company.

William Berkson's picture

John, I agree worker ownership of businesses is a good thing, but it doesn't solve the economic problems we face. The macro-economic policies of the government are critical for creating an environment that is both thriving economically and relatively fair. And, as my wife found, who owns what is a less important a variable than the macro-economic policies pursued by the government.

The exception is that high income inequality tends to corruption, so that government policies end up enriching a few instead of investing in the economic growth of the whole nation. If employee stock plans limit exorbitant CEO pay, particularly when the business does poorly, that would be great. Looking at the wikipedia article on employee ownership, I don't see any information on that.

I do think that the way our publicly own corporations are structured, with management having excessively short-term incentives, is a huge problem, so maybe there is something in worker ownership that can have a benign effect. The distributist philosophy, which I didn't know about and gather you are a fan of, seem to be impractical romantic schemes in their early 20th century origin of "three acres and a cow". When enterprises are big, it can be a problem for employees to be invested too much in their own company, because if the company goes down, so do their pensions. Also governance of large companies I think tends to attenuate the influence of workers as opposed to management.

In these matters, what I have learned from my wife's work is that the detailed policies often turn out to be more important than the form of ownership, but I'm happy to learn more. If you have links on the impact of employee ownership on CEO pay and corporate governance, I'm interested.

dberlow's picture

So, to summarize, all you need is cash? unless you're an idealist in which case all you need is love? ;) Though if you're like the vast majority of us, you need some combination of the two... to carry on.

I can't speak for every one in all my privately held companies, but I also noticed in my recollections, that Bitstream owned nothing but the software they made, the whole time I worked there. Everything else was begged, borrowed bartered or stolen... so to speak. 30 years of that! breeds a special kind of survival instinct, I'd guess.

Today, all my co-owners own their own means, from their land and home, to their hardware, firmware and software, and further on to the software they make. This allows them be firmly in control of managing the balance of love n' cash, and... to carry on, I'd guess again.

hrant's picture

> you need some combination of the two... to carry on.

Well said.

hhp

Nick Shinn's picture

I think you're holding up Amazon's continued success as proof positive that the statement "nothing lasts forever - especially market dominance on the web" is wrong-headed. Or perhaps simply that there are exceptions.

Are internet companies more short-lived than widget manufacturers?
The dotcom crash was a watershed.
At any rate, MyFonts has proved more durable than MySpace, and unless Monotype f*cks up bigtime, I expect it to continue to dominate for many years.
In general, I'm wary of comparisons between the font industry and other business sectors.
We're so very special, huff puff.

William Berkson's picture

>wary of comparisons

At the Museum of Printing, when Larry Oppenberg showed me around I commented on the amazing dynamism and turbulence in the printing industry, with revolutions in technology coming it seems every 20 years, for two hundred years, making a lot of the earlier machinery, and in come cases jobs, obsolete. He said yes, and the ironic thing is that for much of what were big industrial companies, like Merganthaler Linotype, who regarded type as a small part of their business, what still survive are—the types. From Jenson on, the machinery is gone, and the type survives.

dezcom's picture

@Bill
The type or the digital renderings of the images of the type?

William Berkson's picture

Larry was no doubt referring to the designs, as the technology of getting them to the page and now screen has kept changing: from hand punch-cut foundry metal, to hot metal (lino and mono type) and pantographic punch cut, to film type to digital type. These changes all involve some redesign and reinterpretation. But as Matthew Carter puts it these are new performances of old scores: Garamond, Bodoni, etc. So they live just as Beethoven and Mozart scores do...

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