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Chapter 18: The Emergence and Viability of Participatory Firms
Efficient production typically requires cooperation, but cooperation opens the possibility that some of the cooperating parties have an opportunity to exploit others, using means that reduce the total output. The ‘governance’ structure of a company is the means it uses to combat and control output-reducing exploitation. In this chapter, we discuss the governance of worker-controlled and capitalist firms. Exploitation in worker-owned firms takes the form of a free rider problem where workers do not put forth the efficient amount of effort. In a capitalist firm, the exploitation we focus on is that by the top management.
We offer some explanations for the pattern of worker ownership in industries and identify where ...