Worker Co-Operatives, Employee Ownership

In the paper, three European concepts of employee participation are presented: German codetermination, Basque Mondragón Cooperative, and European Works Councils. Their historical development, fundamental features and functioning principles are described. The author also clarifies the main points of criticism, which are raised against these participation schemes.

This brief paper, entry "B" in the edited book "The Cooperative Firm: Keywords" (Bernardi & Monni, 2016) reviews the particularities of the phenomenon of "workers' buyouts" -- a business restructuring, rescue, or conversion process whereby employees purchase an ownership stake in the business that employs them.

This paper uses data collected through written narratives, focus groups and participant observation in three small UK worker cooperatives to investigate the role of democracy in maintaining cooperatives' dual social-economic characteristic and resisting degeneration. More specifically, it adds to limited empirical literature countering the degeneration thesis by arguing that ongoing processes of individual-collective alignment, understood as central to the practice of democracy, help cooperatives to: balance varying and conflicting needs and aims; challenge the assumption underpinning the degeneration thesis; and transform degenerative " risks " into creative and productive spaces where new meanings and practices can be formed. Acknowledgments I would like to thank my supervisors and all research participants for supporting me on my research journey. I thank also the editors and anonymous reviewers for their invaluable comments on earlier versions of this manuscript. In the spirit of this paper and journal, I would welcome comments on the article.

Since the 19 th century cooperatives have operated for their members' prosperity by promoting economic activities in different fields. This paper seeks to analyse how community coops are modifying the traditional coop structure in order to address new social issues. why do these coops also work for non-members? How does this modify mutuality? Which reasons can explain this phenomenon? Community cooperatives are renewing the cooperation model by surpassing the classic mutualistic structure to one which also pays attention to outcomes for the entire community. Con i soci e per i soci? Un'analisi teorica della mutualità nelle cooperative, la sua evoluzione e riformulazione attraverso le cooperative di comunità italiane Sommario Sin dal 19esimo secolo, le cooperative hanno operato per promuovere il benessere dei loro soci attraverso attività economiche in diversi settori. Questo lavoro s'interroga su come le cooperative di comunità ridiscutono la struttura cooperativa al fine di rispondere a questi nuovi bisogni. La cooperativa di comunità sta riformando il concetto di mutualità? In che modo? Le cooperative di comunità stanno rinnovando il modello cooperativo sorpassando il classico concetto di mutualità ampliando la platea d'interessati a tutti i residenti delle comunità.

Can John Stuart Mill’s radicalism achieve liberal egalitarian ends? Joseph Persky’s The Political Economy of Progress is a provocative and compelling discussion of Mill’s economic thought. It is also a defense of radical political economy. Providing valuable historical context, Persky traces Mill’s intellectual journey as an outspoken proponent of laissez-faire to a cautious supporter of co-operative socialism. I propose two problems with Persky’s optimistic take on radical social reform. First, demands for substantive equality have led past radicals to endorse exclusionary nationalist and eugenics policies. It pushes some contemporary radicals towards illiberal interventions into intimate social life. Second, the radical critique of capitalism relies on an account of profit that neglects the epistemic function of private-property markets. Once this is acknowledged, capitalism retains some progressive credentials against radical alternatives.

A world-renowned economist, prof. Branko Milanović, recently published another book on economic inequality. Capitalism, Alone (2019) is a welcome addition to Milanović's scholarly opus - it provides convincing and very relevant arguments on why pathological wealth inequality still lingers in its place and how certain factors of liberal capitalism help with that. When suggesting counter measures, however, the book remains too cautious and moderate. Nevertheless, like all good wines, this book should age well; the analysis will help my generation with better understanding the inherent problems of contemporary capitalism and in designing more structural policies against current inequality levels.

This study examined the causal link between the job ownership structure and increased commitment and motivation in worker co-operatives. The separation of job ownership from management and the effective alignment of the interests of job managers and the owners have generated a lot of discussion in the past. Proponents of the agency theory have, on the one hand, recommend actions that maximize shareholders value. On the other hand, the adoption of sweeping statements of purpose by many business organizations, have led to the recommendation of the stakeholder and the stewardship theories as being the appropriate guides to corporate actions. However, given the complexities of modern business organizations where the expectations of the workers and job owners are increasingly getting blurred, reliance on these theories does not provide a satisfactory solution. Survey questionnaires were the main instrument for primary data collection in this study. Semi-structured follow-up interviews were also conducted to supplement the method. The research design included three phases of data collection and analysis. Phase one was a qualitative method of informal, semi-structured interviews while phase two was a quantitative survey, the findings of which were used to construct further semi-structured follow-up interviews with worker co-operative stakeholders. The study concluded that the job ownership structure adopted by worker co-operatives has resulted into increased commitment and motivation which has in turn lead to increased productivity and improved performance.

JEL: E24, J24, O15

Michels (1962) claims that any democratic system
ultimately evolves into an oligarchy. Similar
conclusions are drawn by DiMaggio and Powell
(1983) and the phenomenon of co-operatives
becoming oligarchies is generally accepted in the
co-operative literature. Olgarchisation of
democratic organizations can be defined as the
transfer of power from democratically elected
bodies to an informal elite — a group of people who
have real influence on the decisions of the
organization. This paper demonstrates that
oligarchies are by-products of general tendencies to
transfer decision making power to the incompetent
in any form of democracy. Democratic systems are
the result of an attempt to solve a variety of
problems by simplifying rules. Common
meritocratic governance based on expertise is
proposed. An example is provided using the
published case of the Mexican Co-operative
Pascual (Hernandez, 2006), reinterpreted as the
members’ push toward a common meritocracy.

In the 1990s and 2000s, Argentina suffered one of the quickest and most extreme processes of neoliberal state reforms in the world, leading to the closure of numerous factories. To resist the increased unemployment produced by neoliberalism, workers started to organize in a movement aimed at defending their only source of income: their labor. In this article, I analyze the main characteristics of the movement of worker-managed factories in Argentina by exploring how factories were occupied, what motivated the workers' decision to create co-operatives, what made the factories economically viable, how they were legitimated by the community, which legal reforms workers achieved to support their struggle, and how they manage their factories.

This paper examines how different types of ownership, including investor-owned, employee-owned and mixed models, affect the dynamics of participatory practices in the workplace, and the broader social effects of these differences. It brings together literature from democratic theory and empirical research in workplace participation and employee ownership. The first step is to articulate the range of democratic practices from non-democratic to strongly democratic. The essay then discusses the different forms that participation can take and the threshold for what can be considered democratic participation. It then considers different models of ownership and the impact of ownership type on participatory practices. I find that investor-owned firms cannot be considered strongly democratic and that worker cooperatives are more likely to be strongly democratic and cannot fall below the threshold of weak democracy. However, strong democracy is not necessarily a feature of worker cooperatives.

How can we build good jobs? This is an important question. When we, as British Columbians, decision makers, workers, and citizens, engage with this question, we develop a long list of potential ideas because we approach the issue in different ways: some policy makers count any job—no matter its precariousness, insecurity, or income—as a success. Others posit that jobs need to pay a living wage to be considered a good job. Others indicate that workers define good jobs as those that are empowering, are fulfilling, connect people socially, and many other characteristic connected to inclusion
and empowerment. The truth is that a good job is a combination of all of these factors. I argue that
one path towards building fulfilling, empowering, rewarding, and community-oriented jobs – good jobs – is through co-operatives. Co-operative enterprises can offer jobs that
are rewarding to workers, which provide stable employment, that allow workers to participate in their jobs, and that contribute to their communities through the local
circulation of business proceeds, wages, and consumer activities. This becomes a mutually positive economic flow, as increased economic activity supports workers.

Traditional command and control organizations have often displayed an inability to adapt to rapidly changing technological and global forces. In contrast, the authors have studied a number of companies that practice innovative organization-wide entrepreneurial approaches and are consequently more responsive and capable of renewal. Some of these are high technology companies and some aren’t. Some are multinational and some aren’t. What sets these firms apart are their unique organizational processes. No one company does it the same as any other. Yet underlying all of them is an overall approach that we refer to as Shared Entrepreneurship which involves an empowering, ethical, dynamic and freedom-based process of collaborative innovation. In this article, some primary principles we have discovered in studying these exemplary organizations will be examined, drawing on over 25 years of first-hand experience. In addition, we explore how these principles systematically work together to produce long-term results.

This study, carried out in Britain, sought to find out the triple-bottom line performance initiatives adopted by worker co-operatives and to determine the level of satisfaction with their performance as an indicator for effective achievement of objectives. Although survey questionnaires were the main instrument for primary data collection, semi-structured follow-up interviews were also conducted to supplement the method. The study found out that apart from the achievement of the economic and social well-being of members, worker co-operatives have also responded effectively to the social challenges of their communities by trying to solve the problems of unemployment and social exclusion. Some of their objectives include democratization of the work place; integration of the marginalized members of the society; fair trade and environment conservation. The study also found out that worker co-operatives seek to promote the fullest possible participation in the economic and social development of groups of people who have hit her to encountered economic difficulties within the existing economic infrastructure that is not able to provide them with opportunities.

Happiness is political. The way we think about happiness affects what we do, how we relate to other people and the world around us, our moral principles, and even our ideas about how society should be organized. Utilitarianism, a political theory based on hedonistic and individualistic ideas of happiness, has been dominated for more than two-hundred years by its founder, Jeremy Bentham. In Happiness, Democracy, and the Cooperative Movement, Mark J. Kaswan examines the work of William Thompson, a friend of Bentham’s who nonetheless offers a very different utilitarian philosophy and political theory based on a different conception of happiness, but whose work has been largely overlooked. Kaswan reveals the importance of our ideas about happiness for our understanding of the basic principles and nature of democracy, its role in society and its character as a social institution. In what is the closest examination of Thompson’s political theory to date, Kaswan moves from philosophy to theory to practice, starting with conceptions of happiness before moving to theories of utility, then to democratic theory, and finally to practice in the first detailed account of how Thompson’s ideas laid the foundations for the cooperative movement, which is now the world’s largest democratic social movement.

“This is an original and impressive piece of scholarship that calls attention to an important but neglected figure (Thompson) and provides an innovative and timely reading of his work. In the author’s hands, applied theory is given new life and new purpose.” — Stephen Engelmann, editor of Selected Writings: Jeremy Bentham

“In this remarkable book, Mark Kaswan rescues and rehabilitates the reputation of a long-forgotten and unjustly neglected thinker—the radical Irishman, feminist, non-Benthamite Utilitarian, and a writer of remarkable range and power—William Thompson. In Kaswan, Thompson has finally found the expositor he so richly deserves. And we might in turn find in Thompson a vision of democratic possibilities that we so sorely need.” — Terence Ball, author of Reappraising Political Theory: Revisionist Studies in the History of Political Thought

Poses a set of problems for the worker ownership field emerging from the changing nature of production and organization.

Review of emerging developments in the organization of economic production and conceptual exploration of their implications for the ownership regime, and for worker ownership.

Worker ownership research and advocacy usually take for granted what is to be owned: a factory or firm, exchanging on open markets. But this form of production, analyzed in the markets-hierarchy literature, is increasingly in question as more value is generated through flexible cross-boundary collaborations. As a result, the nature of ownership rights are contested from both within and without the business community.

This paper explores some implications of these developments on employee ownership as a practical ideal: what are the main possibilities for the evolution of “ownership” rights in collaborative processes?

Worker owners need to consider their relation to, and distribution of rights among, other collaborative partners, including knowledge contributors and interdependent stakeholders.

Implies a need to move beyond markets-hierarchies frameworks, in which concern is focused on the governance of firms, to building a set of mechanisms for the organization and governance of production networks.

In this Article, I propose a novel law and economics explanation of a deeply puzzling aspect of business organization in market economies. Why are virtually all firms organized as capital-managed and -owned (capitalist) enterprises rather than as labor-managed and -owned cooperatives? Over 150 years ago, J.S. Mill predicted that efficiency and other advantages would eventually make worker cooperatives predominant over capitalist firms. Mill was right about the advantages but wrong about the results. The standard explanation is that capitalist enterprise is more efficient. Empirical research, however, overwhelmingly contradicts this. But employees almost never even attempt to organize worker cooperatives. I critique the explanations of the three leading analysts of the subject (N. Scott Arnold, Henry Hansmann, and Gregory Dow), all of whom offer are different transactions cost accounts, as logically defective and empirically inadequate. I then propose an explanation that has been oddly neglected in the literature, that the rarity of cooperatives is explained by the collective action problem identified by writers such as Mancur Olson. Labor management is a public good that generates the n-person prisoner’s dilemma which gives rational actors the incentive to create it in suboptimal (or no) amounts. I support this by reference to the empirical facts about the origin of existing cooperatives and show that this explanation requires no strong version of a questionable rational choice theory. This explanation is supplemented by the mere exposure or familiarity effect derived from social and cognitive psychology, which turns on the fact that labor managed firms are rare, in part because of the public goods problem, thus unfamiliar, which makes them less attractive and thus more likely to be rare. My account points advocates of labor management towards solutions such as institutional changes in incentives, which, however, themselves involve public goods issues.

SMART RURAL COMMUNITIES

Description of research:

This project aims to conduct fieldwork research in several rural and remote communities in post-conflict areas in Colombia (Latin America) and newly developed areas in Mozambique (Africa). By doing so, this fieldwork research will provide qualitative insightful data to shape an intervention model entitled ‘Smart Rural Communities’. Ultimately, the project not only aims to revert the Smart-City-Global-North logic in developing countries but also to establish an ad-hoc contextualized version for the rural communities in several strategically-targeted locations of the Global South.

This project is led by the NGO Ayuda en Acción (Aid-in-Action), based in Spain, which will employ and deploy the resulting and strategic outcome internationally among their territorial development areas and branches. Despite the fact that the NGO has been operating internationally with a vision characterized by action-driven international aid, this project will enhance the potential strategy of the NGO by adapting the ‘smart’ use of the ICT, energy, mobility, education, health, gender and governance advancements jointly with a participatory and experimental methodology. Hence, this project envisages an update for the way the NGO Ayuda en Acción operates as an international organization for development and humanitarian aid.

This applied research project consists of three phases: state-of-the-art, fieldwork research, and modelisation. The fieldwork research will be undertaken by using three techniques: visual ethnography, in-depth interviews, and Living Labs in combination with focus groups. This project shows a policy commitment in renewing strategic and operatively the intervention model of the NGO Ayuda en Acción by including ultimately some lessons learnt from the ground for both infrastructure and community capacity building. This project will seek a strategic alignment with some supranational institutions in this field, such as BID (Inter-American Bank for Development – Banco Interamericano de Desarrollo), EU, UN and OECD, among others.
Description of the nature of participants and fieldwork methodology:

In the two aforementioned cases, participants are local residents in rural and remote communities. The research is particularly interested in analysing their perceptions and how their daily life could be improved by scaling up from technological advancements. However, the fieldwork will substantially identify groups of stakeholders in order to examine their mutual inter-dependency in enhancing the community empowerment stemming from opportunities provided by smart strategies and co-operative social economic formation from scratch.

As such, two groups of stakeholders will be given particular consideration alongside the process of intervention: Millennials (young people with highly transformative capacities) and women (emancipating and empowering them in the community’s collective decision-making processes). For the first group of stakeholders, particularly in Colombia, it is remarkably challenging that young entrepreneurs are returning from the cities to their villages after a long period of being absent in their communities, due to the conflict. In Mozambique, the role and the way the project could engage women is intriguing given the agriculture associations run collectively by them. In both cases, there is great potential about the participation of these target groups.

Ultimately, the project attempts to encourage local residents/natives to initiate their own entrepreneurial ideas by being supported with experts and technical professionals. In this endeavour, participants will take part in diverse research activities in their community in reflecting collectively on their present and future living and working conditions overall.

The fieldwork research will be scientifically conducted by the University of Oxford, Urban Transformations ESRC, led by Dr Igor Calzada, MBA and the spin-off TransLoKal. In this process, a group of professionals from Mondragon Co-operatives, such as LKS, Alecop, and Mundukide, among others, will additionally take part, also giving technical advice to the communities in the fields of engineering, education, co-operation and co-operativism.