The Promise and Circumscribed Potential of Worker-Owned Businesses « naked capitalism

Yves Smith writes about The Promise and Circumscribed Potential of Worker-Owned Businesses

While our prolonged economic downturn is concentrating power and wealth in fewer and fewer hands, it is also stimulating efforts to create more democratic business models.

Smith thinks that the standard reference model of the Mondragon Corporation is successful because it may in part be a reflection of Basque culture which did not have a Feudal system.

One city, Richmond, California, is promoting worker co-operatives. The main difficulty is that these co-operatives cannot find funding. Banks are suspicious of such ventures.

Smith quotes from the Financial Times:

According to the US Federation of Worker Co-operatives, these businesses are mostly in urban areas, at businesses such as restaurants and cab companies. In other industries, such as home healthcare, co-ops have helped to prevent employee attrition and provide more reliable care for the elderly. “The worker co-op takes a profession that is low pay, low morale, and high turnover and makes people worker-owners so they’ve got a vested interest in that business,” says Liz Bailey, interim chief executive of the National Cooperative Business Association.

Emphasis Mine