Company Shareholders

Hypothetical: would it be possible to start a company today which made its workers the sole share holders? Has this been done before? Would this represent a socialist model? Finally, would such a venture be a good basis for revolutionary activism?

godlessnorth wrote:Hypothetical: would it be possible to start a company today which made its workers the sole share holders? Has this been done before? Would this represent a socialist model? Finally, would such a venture be a good basis for revolutionary activism?

Yes it would be possible but it would have interesting legal implications, not insurmountable but interesting non-the-less, for instance firings would be buy outs, and hirings would have to be some sort of buy in if you will. But other than these sorts of petty problems I can see no legal reason that it is NOT possible right now.

Maybe.

Yes and No, yes if it was in the context of a system wherein the workers had the options to organize or not, and be worker owners or not, no if in a our current system. It is however a better arraignment for most workers, and for most business ends -- there are always going to be small shops and 'family businesses', personally I would let those that would rather just work for another, do so and those that would rather be a worker and an owner be so, simple really -- and it would be a good start in showing the goods as it were.

And from the view that anything that upsets that apple cart and is effective for those doing the upsetting is revolutionary in a good sense, yes it would be revolutionary IF it worked and was productive on the whole.

What about the 'Mondragon' outfit in Spain, are the workers there not the shareholders too?

Isakenaz wrote:What about the 'Mondragon' outfit in Spain, are the workers there not the shareholders too?

Not sure, that is why I went with maybe. It could be and it could be that they are in a giant partnership, I have not looked at the details. Legal mamba is not very appealing to my mind.

godlessnorth wrote:Hypothetical: would it be possible to start a company today which made its workers the sole share holders? Has this been done before? Would this represent a socialist model? Finally, would such a venture be a good basis for revolutionary activism?

There are primarily two methods which have been utilized to empower workers through stock ownership thus far: 1.) ESOPs ("employee stock ownership plans") and 2.) the establishment of worker cooperatives. The former retains capitalist social relations, while the latter is a genuinely socialist alternative mode of production. If what you're suggesting is the formation of a worker cooperative, then such has indeed been implemented innumerable times throughout history. Worker cooperatives continue to prove their operational viability to this very day—in fact, hundreds of thousands (if not millions) of people continue to work in such firms throughout the world, and cooperatives can be found functioning successfully within virtually every industry.

The principles of cooperative production were originally formulated by the Rochdale Society of Equitable Pioneers in 1844. I'll provide you with the general model most contemporary cooperative firms practice:


*PURPOSE: To maximize net and real worth of all owners. Each firm is organized and controlled by worker members. Only worker-members may own stock in their place of employment, one share per member; public sale of stocks are prohibited.

*OWNERSHIP/CONTROL: Worker members are the sole owners of their business. Business policy is set by directors elected by worker-members, or by assembly of worker-members; one person/one vote.

*SOURCES OF CAPITAL: By public lenders who have no equity or vote; or from net earnings, a portion of which are set aside for reinvestment.

*DISTRIBUTION OF NET MARGIN: To members after funds are set aside for reserves and allocated to a collective account.

*CAPITAL DIVIDENDS: Limited to an interest-like percentage set by policy.

*OPERATING PRACTICES: Workers set production schedules either through elected boards and appointed managers or directly through assemblies. Working conditions determined by labor law and assembly of worker-members, or internal dialogue between members and managers.


This arrangement of production represents the very cornerstone of the socialist economy many of us advocate on behalf of.

Many people question the efficiency of such firms, and fortunately there is a rich empirical literature on the topic. The overwhelming consensus among economists who have actually studied cooperative firms closely is that they are just as productive as their capitalist counterparts, and frequently more so. Here is just a brief sample of some of the studies verifying the viability and efficiency of worker cooperatives:

*Bartlett, Will and John Cable, Saul Estrin, Derek Jones, and Stephen Smith (1992), “Labor-Managed Cooperatives and Private Firms in North Central Italy: An Empirical Comparison,” Industrial and Labor Relations Review v. 46, no. 1 (Oct.) pp. 103-118.

*Bellas, Carl (1972). Industrial Democracy and the Worker-Owned Firm: A Study of Twenty-One Plywood Companies in the Pacific Northwest. New York: Praeger.

*Berman, K. V. (1967), Worker-Owned Plywood Companies. Pullman, Washington: Washington State University.

*Bernstein, Paul (1976). Workplace Democratization: Its Internal Dynamics. Kent, Ohio: Kent State University Press.

*Blasi, Joseph and Michael Conte, Douglas Kruse (1996), “Employee Ownership and Corporate Performance Among Public Corporations,” Industrial and Labor Relations Review v. 50, no. 1 (October) pp. 60-79.

*Bonin, J. P. and D. C. Jones, and L. Putterman (1993), “Theoretical and Empirical-Studies of Producer Cooperatives - Will Ever the Twain Meet,” Journal of Economic Literature v. 31, no. 3 (Sept.) pp. 1290-1320.

*Cable, John and and F. Fitzroy (1980), “Productivity, Efficiency, Incentives and Employee Participation,” Kyklos v. 33, pp. 100-121.

*Craig, Ben and John Pencavel (1992), “The Behavior of Worker Cooperatives: The Plywood Companies of the Pacific Northwest,” American Economic Review v. 82, no. 5 (Dec) pp. 1083-1105.

*Craig, Ben and John Pencavel (1993), “The Objectives of Worker Cooperatives,” Journal of Comparative Economics v. 17, pp. 288-308.

*Craig, Ben and John Pencavel (1995), “Participation and Productivity: A Comparison of Worker Cooperatives and Conventional Firms in the Plywood Industry,” Brookings Papers on Economic Activity, p. 121.

*Craig, Ben and John Pencavel (1994), “The Empirical Performance of Orthodox Models of the Firm: Conventional Firms and Worker Cooperatives,” Journal of Political Economy v. 104, no. 4 (Auf) pp. 718-744.

*Defourney, J. S. and Saul Estrin and Derek Jones (1985), “The Effects of Workers' Participation on Enterprise Performance: Empirical Evidence from French Cooperatives,” International Journal of Industrial Organization v. 3, pp. 197-217.

*Defourny, J. S. (1992), “Comparative Measures of Technical Efficiency for Five Hundred French Workers' Cooperatives,” Advances in the Economic Analysis of Participatory and Labor Managed Firms edited by Derek Jones and Jan Svejnar (Greenwich, Conn: JAI press) pp. 27-62.

*Doucouliagos, Chris (1995), “Worker Participation and Productivity in Labor-Managed and Participatory Capitalist Firms: A Meta-analysis,” Industrial and Labor Relations Review v. 49, no. 1 (Oct) pp. 58-77.

*Dow, Gregory K. (2003). Governing the Firm: Workers' Control in Theory and Practice. New York: Cambridge University Press.

*Estrin, Saul and Derek Jones (1992), “The Viability of Employee-Owned Firms: Evidence from France,” Industrial & Labor Relations Review v. 45, no. 2 (January) pp. 323-338.

*Jones, Derek and D. Backus (1977), “British Producer Cooperatives in the Footwear Industry: An Empirical Evaluation of the Theory of Financing,” Economic Journal v. 87, pp. 488-510.

*Jones, Derek (1985), “The Cooperative Sector and Dualism in Command Economies: Theory and Evidence for the Case of Poland,” Advances in the Economics of Participatory and Labor-Managed Firms v. 1, pp. 195-218.

*Mygind, Niels (1987), “Are Self-Managed Firms Efficient? The Experience of Danish Fully and Partly Self-Managed Firms,” Advances in the Economics of Participatory and Self-Managed Firms edited by D. Jones & J. Svejnar (Greenwich, Conn: JAI Press) pp. 243-323.

*Perotin, Virginie (1987), “Conditions of Survival and Closure of French Worker Cooperatives: Some Preliminary Findings,” Advances in the Economic Analysis of Participatory and Labor-Managed Firms edited by D. C. Jones and J. Svejnar (Greenwich, Conn: JAI Press) pp. 201-224.


I also recommend viewing the documentary film, The Mondragón Experiment, in the Educational Videos thread.

Thanks a heap Celtiberian, this is exactly what I was after.

I've got some research to do. It may be possible to make such 'adjustments' in my area.

godlessnorth wrote:Thanks a heap Celtiberian, this is exactly what I was after.

I've got some research to do. It may be possible to make such 'adjustments' in my area.

No problem at all, comrade. I'm happy I could be of assistance.