Democratic Firms
Democratic Firms
Assets for the Long Term
This chapter presents a proposal to promote firms run by their employees and extensive employee involvement in the governance of conventional firms. Democratic firms build up capital for future generations, keep more profit in the firm, and have more powerful incentives to keep the firm in operation in the medium and long term than investor-owned firms. They involve younger generations in decisions. Although labour-managed firms may not necessarily be environment-friendly without appropriate regulation, their negative impact is likely to be lighter than that of conventional firms. Democratic firms may also indirectly benefit future generations by limiting unchecked firm growth and the loss of skills and jobs that can have dramatic compounded effects on communities far into the future. Labour-managed firms are efficient, but incentives for individual entrepreneurship may have to be retained in a labour-managed economy. Multi-stakeholder governance is proposed in sectors that are not appropriate for private ownership.
Keywords: firms, governance, labour-managed firms, labour-managed economy, employee participation, employee ownership, worker co-operatives, workplace democracy
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