What if... a world with no stock market

Imagine a world where there is no stock market. Where companies answer to their stakeholders (employees, clients) rather than investors. Would that make a positive difference? I don't know (I am very far from an expert) but it's a question I'd like an answer to.

There are nuances to the stock market, so maybe what I'm really asking is about publicly traded companies. The reason I ask is because it seems that those publicly traded companies are answerable first to their stockholders, even at the expense of the company's best interests. Future gains are less important than a big dividend now (or at least that's the impression I get).

A small portion of the population keeps getting richer (CEOs, investors) while the workers keep getting shafted. I keep hearing that companies aren't hiring - not because they can't afford more workers but because they can make more profits for their stockholders by overworking their current employees. (I'd argue that this will eventually backfire since people burn out. They leave and/or they work less efficiently. So the company spends more training new employees. Which they think are expendable. Then they question why they aren't making more - when no one can afford to buy their products because no one has any money!)

I've been in a job where I was most definitely overworked. As people left, my department became me. Doing what 4 people had done before. Granted, I found ways to make processes run more efficiently (I had to), but it was still too much. I had a little breakdown just before I left (oh the relief when I walked out and realized I didn't need to down Tums continuously to get through the day!). And they had to hire 2 people to replace me.

Now, I bring all this up because I'd like to point out that they ended up paying salaries and benefits for 2 people anyway (after a short time of paying me exorbitant overtime), but there was also a toll on my health, which meant I used more health insurance. Yes, I paid more in co-pays, but overall, that helped raise insurance rates for everyone. (When more peope get sick, insurance companies raise rates. They don't generally lower them.)

People started leaving that company, abandoning ship so to speak, as working conditions worsened. New people were hired who didn't have as much experience, who needed a lot of training, who took time to learn. Clients weren't happy when everyone they talked to had to ask someone else for help and couldn't just get the job done. Can you see the snowball effect? This wasn't a public company, but I can imagine what any investors would have thought as they watched numbers fall.

Ok, so maybe this isn't a great case study for my question since this wasn't a public company and it shows how any company can make bad decisions. I just think using stock price as a benchmark is a bad idea. It magnifies the problems in bad management and puts undue emphasis on a metric that is kind of meaningless. Having to make profits to pay dividends to investors rather than making a profit to reinvest in the company seems foolish. (Ok, yes, you can do both. But it seems from where I'm sitting that sometimes those in charge forget that the employees are a part of the company. A company is only as good as its employees. Investing in human capital (which sounds awful) is just as important as investing in equipment.)

Anyway, I know there are no simple solutions, but this was just a thought exercise and a bit of a gripe that I wanted to put out there.