Fixing Capitalism by the Hour

by Mario Kaiser
updated July 23, 2022

We live in a world where wealth is very unfairly distributed. What's worse: this distribution is getting more and more unfair. The world economic forum said in a 2014 outlook (opens new window) that it's "essential that we devise innovative solutions to the causes and consequences of a world becoming ever more unequal".

In that spirit I present a simple idea to redistribute wealth towards the people actually creating it, without disrupting our precious capitalistic systems too much. The concept revolves around the idea that it's terribly unfair that it's not only possible, but the standard, really, for people to work their entire lives without having much more than survival to show for it. People rent out their bodies for money and there's nothing wrong with that per se; but if the entire workforce which is creating a company's wealth is exempt from the profits they're generating, it starts becoming unfair. It doesn't really make sense to be able to buy a share in the profits, but to not be able to earn a share in the profits with your own hard work. Of course I'm aware that reality sometimes is a tad more complex, but I wanted to outline the problem to which I think the solution is that everyone responsible in the creation of wealth should have a share in it.

Now to the practical application: imagine a new type of company, much like the limited types we have all over the world, where shares in a company are determined not by capital or stock, but by time invested in the company. Every hour I spend working for this company earns me another share and increases the total number of shares accordingly. So my shares are calculated as HOURS WORKED BY ME / TOTAL OF HOURS WORKED BY EVERYONE. This makes the system scale fairly from one to thousands of people. By making those acquired hours sellable we would also allow for investments: investors could buy a certain amount of hours, maybe even more than there currently are, to cater for early stage investments.

Maybe an example makes this clearer: imagine I found a startup with four people. In the beginning, we work together all the time and all spend 200 hours working for our company. At that point we each own 200 hours of the total 800 hours worked for the company, meaning a 25% share in the company. After the concept is done, I start programming the product, amassing another 800 hours on my end. Preparing for the launch, one of my co-founders works on the marketing and spends 600 hours on several campaigns. An angel investor buys another 1000 hours for 5k, which leaves us at a total of 3200 hours in total. The investor owns 31.25% of the company at this point, which seems a lot for the low investment, but as opposed to the rest of the team, his share will quickly be diluted as we accumulate more hours. I've worked 1000 hours in total and also own 31.25% as well, my marketing co-founder owns 25%, while the other two co-founders both own at 6.25% of the company. As they in turn start working more, the share landscape will shift accordingly.

Of course this new company type using these "work time alloted shares" doesn't even have to be a complete replacement of the traditional capital model, but can be mixed with it in any ratios. Like the system but are afraid that investors might not like the automatic dilution of their shares over time? Go for 80% capital and 20% work time alloted shares. Of course the type of contribution doesn't have to be hours necessarily: we could use any kind of measurement to cater to modern work life where results count more than time spent at work.

While I do believe we have to urgently do something about the wealth gap, I also believe that the best solution is a non-compulsory one. A solution that people might want to adopt because it has serious advantages over the status quo. Do you think this could be the case for this model? Do you like the idea? If so, please share, think and talk about it! I'm happy to hear your opinion!