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Article

John Bonin

This essay is a tribute to Jaroslav Vanek who spent 32 years at Cornell University where he founded the Program on Participation and Labor-Managed Systems (PPLMS) in 1970…

Abstract

Purpose

This essay is a tribute to Jaroslav Vanek who spent 32 years at Cornell University where he founded the Program on Participation and Labor-Managed Systems (PPLMS) in 1970, which became the home for economic research on these issues in the US. It is a brief intellectual history of a multi-dimensional scholar.

Design/methodology/approach

Vanek's seminal work in the American Economic Review in 1969 marked the culmination of a decade of work on labor management inspired by his brother Jan's work on Yugoslavia, considered then to be a worker-managed economic system. In two rapidly following tomes, Vanek laid out the landscape for the development of a new subfield in economics by providing precursors to many of the results to follow. In that previous decade, Vanek produced papers in traditional economic theory, e.g. international trade and economic growth.

Findings

Vanek's mindset persists in the interplay between the emerging theory of labor-managed firms and traditional economic literature that takes seriously the role of organizational form. This essay develops that cross-pollination and seeks to identify the remaining questions and issues for future work that the economics profession owes to Jaroslav Vanek.

Originality/value

Connection of strands of literature in the economic theory with the literature on labor-managed firms and worker-managed economies tracing the evolution of the latter to the work of Jaroslav Vanek.

Details

Journal of Participation and Employee Ownership, vol. 3 no. 2/3
Type: Research Article
ISSN: 2514-7641

Keywords

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Book part

Mario Ferrero

This paper revisits the early-20th-century British blueprint for Guild Socialism and discusses its similarities and differences with labor managed firm (LMF) theory and…

Abstract

This paper revisits the early-20th-century British blueprint for Guild Socialism and discusses its similarities and differences with labor managed firm (LMF) theory and with the historic Yugoslav system. It finds that the Guild Socialist vision of a corporatist workers’ state based on universal, non-anonymous, multi-party negotiation of incomes, prices, and quantities comes much closer to anticipating the real-world Yugoslav experiment in worker-managed market socialism than the market-syndicalist utopia embodied in the Western economic model of the LMF and economy.

Details

Participation in the Age of Globalization and Information
Type: Book
ISBN: 978-0-76231-278-8

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Article

PETER J. LAW

There is now a considerable literature on the Illyrian firm (that is, the firm which is assumed to maximise income per worker), and it has been argued that the analysis…

Abstract

There is now a considerable literature on the Illyrian firm (that is, the firm which is assumed to maximise income per worker), and it has been argued that the analysis may have relevance for the labour‐managed or co‐operative enterprise. Significant contributions to this literature have been made by Domar (1966), Vanek (1970), Meade (1972, 1974) and others but the seminal paper is generally recognised to be that of Ward (1958).

Details

Journal of Economic Studies, vol. 4 no. 1
Type: Research Article
ISSN: 0144-3585

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Book part

Derek C. Jones

Existing theoretical and empirical evidence is inconclusive concerning the comparative performance of labor-managed firms (LMFs) and conventional firms. By assembling and…

Abstract

Existing theoretical and empirical evidence is inconclusive concerning the comparative performance of labor-managed firms (LMFs) and conventional firms. By assembling and analyzing new data for a sample of 51 conventional firms and 26 producer cooperatives in the Italian construction industry during the period 1981–1989 we provide additional evidence. Except for organizational form, the cooperatives in our sample are fairly comparable to our conventional firms. Based on our production function estimates, and unlike some previous econometric studies, we find no significant productivity advantage of cooperatives over conventional firms. Our ordinary least squares (OLS) point estimates generally indicated that output would be lower in a cooperative than in an otherwise identical conventional firm. The only statistically significant measure of financial and decision-making participation is collective reserves. We conclude by offering some possible explanations for why our results may differ from some previous findings, especially those for Italian producer cooperatives. In particular we suggest that research methods that are new to the study of cooperatives are needed to help to resolve these questions.

Details

Cooperative Firms in Global Markets
Type: Book
ISBN: 978-0-7623-1389-1

Content available
Article

David Ellerman

This paper will discuss two problems that have plagued the literature on the Ward-Domar-Vanek labor-managed firm (LMF) model, the perverse supply response problem and the…

Abstract

Purpose

This paper will discuss two problems that have plagued the literature on the Ward-Domar-Vanek labor-managed firm (LMF) model, the perverse supply response problem and the horizon problem. The paper also discusses the solution to the horizon problem and the alleged “solution” of a membership market.

Design/methodology/approach

This is a conceptual paper so it analyzes the two problems and shows how they can be resolved. It also shows how one alleged “solution” (membership market) is based on several conceptual mistakes about the structure of rights in a democratic firm.

Findings

The perverse supply response is based on the assumption that the members of a democratic firm can expel for no cause some members when it would benefit the remaining members. It is shown that the same perverse behavior happens conceptually and historically in a conventional firm under the same assumptions. The horizon problem is resolved by the system of internal capital accounts (ICAs) that has been independently invented at least four times.

Research limitations/implications

The idea of a democratic firm is quite often dismissed by conventional economists: “At first it seems like a good idea but unfortunately it is plagued by structural problems such as the perverse supply response and the horizon problem.” Hence it is important to see that the first is not a problem under ordinary assumptions and that the second is a solved problem.

Practical implications

The perverse supply response problem can be reproduced in a conventional firm under similar assumptions, and the horizon problem is real problem for social or common ownership firms but is solved in the Mondragon-type worker cooperatives by the system of ICAs. This has been known and published since the early 1980s, but conventional economists ignore the solution and still cite it as an inherent structure problem of a democratic firm.

Originality/value

It has not been previously shown in the LMF literature that the perverse supply response can be reproduced in a conventional corporation under similar assumptions since the maximand for the conventional firm is not total market value but that value per current shareholder. The solution to the horizon problem using ICAs has long been “known” but never acknowledged in the conventional literature as if it was a necessary feature of workplace democracy. The idea of a membership market is analyzed and criticized.

Details

Journal of Participation and Employee Ownership, vol. 3 no. 2/3
Type: Research Article
ISSN: 2514-7641

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Book part

Katherine Sobering

Collectivist organizations like worker cooperatives are known for requiring high levels of participation, striving toward community, and making space for affective…

Abstract

Collectivist organizations like worker cooperatives are known for requiring high levels of participation, striving toward community, and making space for affective relationships among their members. The emotional intensity of such organizations has long been considered both an asset and a burden: while personal relationships may generate solidarity and sustain commitment, interpersonal interactions can be emotionally intense and, if left unmanaged, can even lead to organizational demise. How do collectivist-democratic organizations manage emotions to create and sustain member commitment? This study draws on long-term ethnographic fieldwork in a worker-run, worker-recuperated business in Argentina to analyze the emotional dynamics of a democratic workplace. First, the author shows how members of the cooperative engage in emotional labor not only in their customer service, but also through their participation in lateral management and democratic governance. An analysis of individual feeling management, however, provides only a partial picture of emotional dynamics. Drawing on the theory of interaction ritual chains, the author argues that workplace practices like meetings and events can produce collective emotions that are critical to maintaining members’ commitment to the group. Finally, the author shows how interaction ritual chains operate in the BAUEN Cooperative, tracing how symbols of shared affiliation circulate through interactions and are reactivated through the confrontation of a common threat. The author concludes by reflecting on implications for future research on emotions in collectivist organizations and participatory workplaces more broadly.

Details

Organizational Imaginaries: Tempering Capitalism and Tending to Communities through Cooperatives and Collectivist Democracy
Type: Book
ISBN: 978-1-83867-989-7

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Article

Leon Grunberg

The idea that worker co‐operatives offer the possibility of increasing productivity without sacrificing workers' safety and health is investigated. Ten worker…

Abstract

The idea that worker co‐operatives offer the possibility of increasing productivity without sacrificing workers' safety and health is investigated. Ten worker co‐operatives and four conventional capitalist firms in the Pacific Northwest plywood industry are studied. Co‐operatives have worse productivity and safety records than conventional firms. Lower productivity is due to the unexpected behaviour that emerges in co‐operatives relying heavily on hired labour. Higher levels of accidents are due to different reporting practices arising from different social relations in production. Co‐operatives tend to over‐report their accidents whereas conventional firms under‐report accidents.

Details

International Journal of Sociology and Social Policy, vol. 6 no. 4
Type: Research Article
ISSN: 0144-333X

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Book part

Mark Klinedinst

Looking at data for over a hundred years on democratic economic institutions in the U.S., there seems to be a clear pattern of initiatives growing strongly, peaking and…

Abstract

Looking at data for over a hundred years on democratic economic institutions in the U.S., there seems to be a clear pattern of initiatives growing strongly, peaking and then falling off. The broad range of data used in this paper allows an investigation of these long-range patterns. These institutions show a life-cycle pattern and appear to be filling in more niches in the economy. The connections between different democratic economic institutions across sectors have historically been weak, but there is evidence of umbrella organizations playing a more active role as a supporting structure to encourage growth.

Details

Employee Participation, Firm Performance and Survival
Type: Book
ISBN: 978-0-76231-114-9

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Article

Gregory K. Dow

The purpose of this article is to summarize the relationship between the research of Jaroslav Vanek on labor-managed firms (LMFs) and the research of Gregory K. Dow on the…

Abstract

Purpose

The purpose of this article is to summarize the relationship between the research of Jaroslav Vanek on labor-managed firms (LMFs) and the research of Gregory K. Dow on the same topic.

Design/methodology/approach

The article reviews the research of Jaroslav Vanek in the 1970s and explains how this influenced the publications of Gregory K. Dow extending from the 1980s to the present. A particular focus involves Dow's book “The Labor-Managed Firm: Theoretical Foundations” published by Cambridge University Press in 2018. The methodology is to present an intellectual history in narrative form. The scope of the paper is the economic theory of the LMF.

Findings

The article finds that Dow's interest in LMFs was stimulated by Vanek's publications from the early 1970s. However, Dow's publications in the 1980s were motivated to a large degree by efforts to overcome the limitations of Vanek's theory of the LMF, a goal that shaped much of Dow's later research in the field.

Originality/value

The paper illuminates the strong intellectual influence Jaroslav Vanek exerted on the economic theory of the LMF. Readers who want information about the influences on Dow's work may also find it useful.

Details

Journal of Participation and Employee Ownership, vol. 3 no. 2/3
Type: Research Article
ISSN: 2514-7641

Keywords

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Article

DID IT REALLY take 24 persons to decide that there was need to regulate the granting of vocational qualifications whose report last month proposes what must surely be the…

Abstract

DID IT REALLY take 24 persons to decide that there was need to regulate the granting of vocational qualifications whose report last month proposes what must surely be the most super of super‐quangoes?

Details

Work Study, vol. 35 no. 6
Type: Research Article
ISSN: 0043-8022

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