After 9 years, the business will have made £54k in profits, so when the investor sells, they get their £60k investment back plus the £54k profit, a total wealth of £114k. Only Capital wins.
If the business loses a third of its value upon sale, the investor walks away with £94k (£40k from the sale and £54k profits), and the employees leave empty-handed and may lose their jobs. Only Capital wins.
After 9 years, the investor sells for £60k and recovers their initial investment, and the £54k profits are shared with the workers, so they receive £27k each. Both Capital and Labour win.
If the business loses a third of its value after 9 years, the £20k loss is covered by the retained profits, so the investor gets their £60k back, and the remaining £34k profits are shared with the workers. Overall, the investors walk away with £77k, and the workers get £17k profits. Both Capital and Labour win.
Note: the proportion of profit distribution between Capital and Labour will depend on the ratio of Capital to Labour in the business.
Overall, Post-Capitalism generates the same wealth as Capitalism, but without negative effects, because the workers share in the profits. And if there are losses, the profits compensate the investors, just as Capitalism does. In summary, Post-Capitalism shares profits without putting the investors at risk. For more details see our FAQ on risk & returns.
Let’s face it, the housing system is lame. The current model is increasing inequalities in our society at an alarming rate, with one in three private tenant locked in poverty. If we want to afford tenants the stability and safety they aspire to, they must be able to secure a roof over their head and improve their financial situation in the long term.
Read Article