I work for Symbiota (https://symbiota.coop/), the UK-based worker co-op behind the Dandelion events platform (https://dandelion.events/) and I take huge satisfaction from working in a co-op!
Elle, it is the day before the Trump US Presidential inauguration. This article resonates with MAGA ideas. Maybe the US will move in this direction as the dust settles from Trumps cleansing actions. Food for thought and something to consider.
Okay so I finally got round to reading this and it puts forward a good case for the mass-cooperative model.
My biggest criticism, I guess, is how we get from here to there - there's a clear destination but no obvious path to get there. Whether this is an impenetrable obstacle or merely a hurdle to overcome - well, I suppose we won't know until we try!
Coming to this a bit late from ACX. The question foremost in my mind is: how do they hire and fire people? It's great that within their selected group of employees they are so collegial and still manage to make a profit. But sustaining that collegiality while still succeeding in a competitive market demands the ability to exclude people who aren't going to be net positive contributors for whatever reason. And that exclusion inherently limits how egalitarian they can really be in the larger scheme of things.
Mondragon does have the ability to lay people off, and in some cases they have also offered early retirement packages. But laid off people also have the right to appeal.
As people don’t become members until two years after working at the company, it is unlikely that they would become laid off after that point. It would be more likely that they would reskill or join other parts of the organization to which they are better suited.
Ok, but those are the easy cases. What I mean is things like:
— How do they screen during hiring for people who will actually work productively despite not being able to make 10x money for 10x productivity?
— How do they fire people (fire for cause, not lay off) who either have an attitude problem or some other issue that caused them to become unproductive or negatively productive (e g. malfeasant)?
If they claim the latter case never happens I call BS. You can make it rarer with good management (including very selective hiring!) but you can't avoid it entirely in any org of sufficient size.
Been daydreaming about a similar concept for a while. I have never heard of Mondragon until now! Thank you so much for this write up. Really opens my eyes to a proven framework. Excited to learn more about Mondragon and how I can attempt to replicate their systems here in the US.
Elle, you say in your post , "Knowledge about the company is limited to educational materials, a sparse Wikipedia page, and a spattering of articles that extol the benefits of cooperatives without really explaining how they work". I don't want to sound nasty and school-marm-ish here, but actually a lot has been written about Mondragon, mostly by academics, but also in the last few years in the general media, say, by Nick Romeo for the New Yorker and P. Goodman in the New York Times. The Financial Times I believe also sent a journalist here in recent years. Here's a list of just a few.
Arando, S., Freundlich, F., Gago, M., Jones, D. C., & Kato, T. (2011). Assessing Mondragon: Stability and Managed Change in the Face of Globalization. In E. J. Carberry (Ed.), Employee ownership and shared capitalism: New directions in research (pp. 241–272). Labor and employment relations association at the University of Illinois Urbana-Champaign.
Arregi, A., Gago, M., & Legarra, M. (2022). Employee Perceptions About Participation in Decision-Making in the COVID Era and Its Impact on the Psychological Outcomes: A Case Study of a Cooperative in MONDRAGON (Basque Country, Spain). Frontiers in Psychology, 13. https://www.frontiersin.org/articles/10.3389/fpsyg.2022.744918
Azkarraga, J., & Cheney, G. (2019). Mondragon: Cooperatives in Global Capitalism. In S. Berger, L. Pries, & M. Wannöffel (Eds.), The Palgrave Handbook of Workers’ Participation at Plant Level (pp. 205–220). Palgrave Macmillan US. https://doi.org/10.1057/978-1-137-48192-4_11
Basterretxea, I., Cornforth, C., & Heras-Saizarbitoria, I. (2022). Corporate governance as a key aspect in the failure of worker cooperatives. Economic and Industrial Democracy, 43(1), 362–387. https://doi.org/10.1177/0143831X19899474
Bretos, I., & Errasti, A. (2017). Challenges and opportunities for the regeneration of multinational worker cooperatives: Lessons from the Mondragon Corporation—A case study of the Fagor Ederlan Group. Organization, 24(2). https://doi.org/10.1177/1350508416656788
Cheney, G. (1999). Values at work: Employee participation meets market pressure in Mondragon. ILR Press, Cornell University.
Freundlich, F., Leceta Ruiz de Alegría, I., Loyola, A., & Legarra, M. (2023). The Mondragon Corporation and its member company Soraluce: The accomplishments and challenges of broad, networked employee ownership over six decades. In G. Hernández & R. Zuloaga (Eds.), Ownership in the Americas: A Path to Shared Prosperity. ITESO-Instituto tecnológico y de estudios superiores de occidente.
Kasmir, S. (1996). The myth of Mondragón: Cooperatives, politics and working-class life in a Basque town. State University of New York (SUNY) Press.
Mathews, R. (1999). Jobs of our own: Building a stake-holder society. Pluto Press Australia.
Stikkers, K. W. (2020). Institutionalizing the Common Good in Economy: Lessons from the Mondragon Cooperatives. Humanistic Management Journal, 5(1), 105–115. https://doi.org/10.1007/s41463-020-00093-8
Whyte, W. F., & Whyte, K. K. (1991). Making Mondragon. The Growth and Dynamics of the Worker Cooperative Complex (2nd edition). ILR Press.
You are so right, and I read some of these materials in my research. I admit that I lumped many of these into my "educational materials" point which was maybe too vague. What I meant more specifically is that, though Mondragon has been a successful working model for decades, the case study still isn't as well known internationally as it should be. Apart from a few articles written in the mainstream media (the ones you point out), most of these are PDFs written for academic and niche journals. My point was that there need to be a lot more of us working to make Mondragon a much better understood and more widely known model internationally, because it's very much one we should all be learning from. I apologize if that wasn't clear, and I appreciate you pointing out these additional resources for other readers who want to research the model and dig deeper.
Hi. Very interesting exchange. Thanks to Elle and the other participants. I've been working in Mondragon for many years and most managers I've heard talk about this say quite openly that they created foreign subsidiaries to protect employment / the co-ops at home in the Basque Country. If their conventional competitors located in low-wage countries and significantly lowered their production costs, then the co-ops are, at some level, obligated to do so. ... though it is a complicated debate. Many agree with German Lorenzo about the lack of suitable legal structures (and financing mechanisms) for worker co-ops in many countries, though some commentators argue that other kinds of legal structures could be used to share ownership in those places. Other multinationals that share owneship broadly with employees in their home countries have found ways to do it in at least some of their foreign subsidiaries. W. L. Gore (of Goretex fame) is an example. ... Many think it is partly a question of priorities and risk aversion. The issue has arisen several times over the years in Mondragon group-wide debates, but serious action has not been taken. Some enteprising, committed Mondragon co-op will have to "take the plunge" at some point if others are to begin to be persuaded. It's a tough one.
Thank you so much for this perspective Fred, I so appreciate it! I'm very curious about the idea of how this model can be replicated both within and outside of Mondragon so this is helpful to understand.
What a concept! I have always promoted employee owned businesses. Out goal and process should become activist in pursuit of this kind of reality. Wonderful essay!
I can't decide what I love more, here! The article itself or the comments discussion! I feel like I'm reading a Cliff's Notes of economic evolutionary thought in late stage capitalism and what comes next for local, state, and global economics and finance. I want to spend time digesting all of this and researching more. And this kind of avid engagement and dialogue is exactly why I will keep throwing money at this work. The capitalist in me appreciates exchanging my funds for the services and goods being provided here and the optimistic futurist in me recognizes the enormous potential of this collaborative creation and distribution of knowledge by all of us who engage with Elle's products and services. Thank you!!
Lee, I can't tell you how much this means to me. Thank you so much for taking the time to thoughtfully engage with my work. I so resonate with the struggle of, "yes capitalism is the best economic theory we've experienced so far, AND it could work so much better!" I'm still piecing together what that could look like, but I'm grateful to explore that here with so many incredibly smart people!
I’m curious what makes this a capitalist model? It seems like it’s an instantiation of the idea of workers control on the means of production. And is perhaps inspired by the anarcho-syndicalist organizational forms that rose up during the Spanish civil war?
I see that they have clearly had to think about how to build productive companies in a larger capitalist context. But the capitalist class structure where a small group of employers control most of the wealth at the expense of the majority sounds absent from their community based on the description. Their emphasis on creating new mindsets toward life and wealth also has a revolutionary feel, and strikes me as resistant to a number of aspects of capitalist culture (prioritizing self interest, consumerism).
Just a few thoughts. I’m curious why folks think this is capitalism?
I think the misunderstanding here is in how we think about capitalism. It is often thought of in the same vein as communism, as a way to structure society, but capitalism is really far more observational than prescriptive. Our (western) society really isn't capitalistic in the way a communist society is communist.
Current society really doesn't care or prescribe how companies should be run or owned. You can start companies with a single owner, owned by many shareholders, owned by nobody as non-profits, or indeed employee owned, society really doesn't care either way.
But we can observe than when people get this freedom to structure companies however they want, the vast majority end up structured by the capitalistic model with owners and employees. There can be many reasons for this, and we can think that this is an unfortunate outcome, but the really interesting question is if there could be a better model, and if more people knew about it, could it eventually take over as the dominant model.
Employee owned companies are interesting because they could potentially end up being that better model.
This is very well said. Capitalism isn't an ideology like socialism or communism, it's what naturally evolved out of our desire to trade with one another. Companies compete on the market, and the owners of them become wealthy (or not) in the process, but how the company is configured on the backend doesn't really matter to that process.
However, we are starting to realize that there are alternative ways of configuring companies on the backend that might be better, and there are things our governments can do to incentivize those models (even while the other ones still exist.) Until now, there has been an incentive to wind up with the "owners and employees" model because of the simple fact that the other models didn't exist as a business structure. At some of its subsidiary plants in China, for example, Mondragon isn't legally able to make those plants cooperatives so they have to give those workers their "profit sharing" through annual bonuses. Cooperatives and employee owned businesses only started getting these incentives in the last few decades!
Thankfully, I think we are starting to see these as better alternatives and we are seeing that reflected in government policies!
I actually think that employee owned businesses are much more common than we are usually aware of. It is easy to look at cooperatives like Mondragon, and notice how different they are, but employee owned businesses are actually all around us and have been around since the start of capitalism. They are just not noticed, because they are largely reserved for high-skill/high-compensation businesses, like law, accounting, finance, and medicine.
General Partnerships are a very (if not the most) common way to structure businesses composed of high-skilled individuals, and are all around us. There may be some variation in their structure, some with all employees as partners and some with distinction between partners and salaried employees, but all are without external ownership.
Some, like Venture Capital, even have found ways to get outside investment without giving up ownership and control. They do this in the form of Limited Partners (LPs), that invest money in the business to get a share of the profit, but without getting any say in how the business is run.
I think it could be very interesting to do a deeper dive on the similarities and differences between this and the co-op model. There might be a more encompassing model to be found in the intersection.
It's true that there are plenty of cooperatives and employee-owned businesses, but that doesn't make them common. Today there are roughly 6,322 employee owned companies in the US. There are 1,030 in the UK. And as I show in this post, there are only 11.1 million worker-owners globally, out of 3.39 billion total workers—that’s only 0.33% of the working population. Very miniscule.
General partnerships are interesting, but that doesn't mean they provide equity to employees. There are certainly prominent tech companies that do, and you're right that it would be great if we could include some of those in our stats—I'll look into that. Still, most equity packages are reserved for senior employees, not all employees. And at private companies most employees won't see the benefits of that equity unless the company sells or goes public so it's kind of imaginary until then. But you are very right that it's a segment worth investigating.
I think that General Partnerships are easily overlooked as a model of employee ownership. Alone in the US there are approximately 450.000 law firms (and then there are also all the accounting, finance and medical parctices structured like this).
With law firms, they are actually required by law to be partnerships, as they can only be owned by lawyers, so there can be no outside investors. It even goes further than this, in that in most firms only practicing lawyers can be partners, so if you stop working you have to transition to an "in counsel" role, where you no longer have ownership.
Ironically, this is probably the most anti-capitalist model you can think of, in that only actual workers can be owners, with no room for participants that only offer capital.
This model is easily overlooked, since it can seem a bit elitist, being mostly used in the highest earning segment of business, and also because partnership is rarely extended to all employees (it would be a rare firm where even the receptionist was a partner as well). But there is no intrinsic reason that this couldn't be the case.
It is an interesting model because it has a long history and all the legal infrastructure in place. Almost every country allow general partnerships or something very similar. And in contrast with cooperatives, it has no problems attracting very highly skilled employees.
That makes sense and yes I agree! I think in my view a central feature of the capitalist model is the separation between owners (capitalists) and employees (workers). In that relation the owners have the power over the company and are not really answerable to the workers. The interesting thing to me about this setup is that it breaks down this divide. The workers are the owners, and the people who manage the company are answerable to their democratic power. It seems like a promising approach!
I so agree, I think the breakdown of this divide is really interesting. And it can happen right now within our existing business structures without having to overhaul our whole economic system!
This is super interesting! I feel like I'd vaguely heard of Mondragon before but I definitely didn't know what they did. I hope information about them can be more widely spread in the future, starting with your essay of course!
Their story got me to reflect about capitalism too. Like many, I'm quick to blame capitalism for everything that's wrong with the economy today but it's worth remembering that we might not have to abolish it completely to find a better solution. Thank you!
Brilliant piece!
I work for Symbiota (https://symbiota.coop/), the UK-based worker co-op behind the Dandelion events platform (https://dandelion.events/) and I take huge satisfaction from working in a co-op!
Thank you, and wow that’s very cool!
Brilliant- thank you for this
Elle, it is the day before the Trump US Presidential inauguration. This article resonates with MAGA ideas. Maybe the US will move in this direction as the dust settles from Trumps cleansing actions. Food for thought and something to consider.
Great article, thanks.
Thank you for this piece. Very interesting to learn more about Mondragon.
Glad you enjoyed it!
A truly comprehensive story with beautiful but useful graphics
🙏
Okay so I finally got round to reading this and it puts forward a good case for the mass-cooperative model.
My biggest criticism, I guess, is how we get from here to there - there's a clear destination but no obvious path to get there. Whether this is an impenetrable obstacle or merely a hurdle to overcome - well, I suppose we won't know until we try!
I think the path there is:
1) Incentivizing the model as outlined in this post: https://www.elysian.press/p/founders-can-make-millions-selling-to-workers
2) And with that incentive in place, more founders choosing to make their companies coops and selling them to employees.
Coming to this a bit late from ACX. The question foremost in my mind is: how do they hire and fire people? It's great that within their selected group of employees they are so collegial and still manage to make a profit. But sustaining that collegiality while still succeeding in a competitive market demands the ability to exclude people who aren't going to be net positive contributors for whatever reason. And that exclusion inherently limits how egalitarian they can really be in the larger scheme of things.
Mondragon does have the ability to lay people off, and in some cases they have also offered early retirement packages. But laid off people also have the right to appeal.
As people don’t become members until two years after working at the company, it is unlikely that they would become laid off after that point. It would be more likely that they would reskill or join other parts of the organization to which they are better suited.
Ok, but those are the easy cases. What I mean is things like:
— How do they screen during hiring for people who will actually work productively despite not being able to make 10x money for 10x productivity?
— How do they fire people (fire for cause, not lay off) who either have an attitude problem or some other issue that caused them to become unproductive or negatively productive (e g. malfeasant)?
If they claim the latter case never happens I call BS. You can make it rarer with good management (including very selective hiring!) but you can't avoid it entirely in any org of sufficient size.
By laid off, I mean fire. They can absolutely still fire people.
Been daydreaming about a similar concept for a while. I have never heard of Mondragon until now! Thank you so much for this write up. Really opens my eyes to a proven framework. Excited to learn more about Mondragon and how I can attempt to replicate their systems here in the US.
Thanks Kade!!! So glad it was helpful! More posts coming....
The audio was great — pls keep including that!
Thank you for this feedback. I'll keep doing that!
Elle, you say in your post , "Knowledge about the company is limited to educational materials, a sparse Wikipedia page, and a spattering of articles that extol the benefits of cooperatives without really explaining how they work". I don't want to sound nasty and school-marm-ish here, but actually a lot has been written about Mondragon, mostly by academics, but also in the last few years in the general media, say, by Nick Romeo for the New Yorker and P. Goodman in the New York Times. The Financial Times I believe also sent a journalist here in recent years. Here's a list of just a few.
Arando, S., Freundlich, F., Gago, M., Jones, D. C., & Kato, T. (2011). Assessing Mondragon: Stability and Managed Change in the Face of Globalization. In E. J. Carberry (Ed.), Employee ownership and shared capitalism: New directions in research (pp. 241–272). Labor and employment relations association at the University of Illinois Urbana-Champaign.
Arregi, A., Gago, M., & Legarra, M. (2022). Employee Perceptions About Participation in Decision-Making in the COVID Era and Its Impact on the Psychological Outcomes: A Case Study of a Cooperative in MONDRAGON (Basque Country, Spain). Frontiers in Psychology, 13. https://www.frontiersin.org/articles/10.3389/fpsyg.2022.744918
Azkarraga, J., & Cheney, G. (2019). Mondragon: Cooperatives in Global Capitalism. In S. Berger, L. Pries, & M. Wannöffel (Eds.), The Palgrave Handbook of Workers’ Participation at Plant Level (pp. 205–220). Palgrave Macmillan US. https://doi.org/10.1057/978-1-137-48192-4_11
Basterretxea, I., Cornforth, C., & Heras-Saizarbitoria, I. (2022). Corporate governance as a key aspect in the failure of worker cooperatives. Economic and Industrial Democracy, 43(1), 362–387. https://doi.org/10.1177/0143831X19899474
Bretos, I., & Errasti, A. (2017). Challenges and opportunities for the regeneration of multinational worker cooperatives: Lessons from the Mondragon Corporation—A case study of the Fagor Ederlan Group. Organization, 24(2). https://doi.org/10.1177/1350508416656788
Cheney, G. (1999). Values at work: Employee participation meets market pressure in Mondragon. ILR Press, Cornell University.
Freundlich, F., Leceta Ruiz de Alegría, I., Loyola, A., & Legarra, M. (2023). The Mondragon Corporation and its member company Soraluce: The accomplishments and challenges of broad, networked employee ownership over six decades. In G. Hernández & R. Zuloaga (Eds.), Ownership in the Americas: A Path to Shared Prosperity. ITESO-Instituto tecnológico y de estudios superiores de occidente.
Kasmir, S. (1996). The myth of Mondragón: Cooperatives, politics and working-class life in a Basque town. State University of New York (SUNY) Press.
Mathews, R. (1999). Jobs of our own: Building a stake-holder society. Pluto Press Australia.
Stikkers, K. W. (2020). Institutionalizing the Common Good in Economy: Lessons from the Mondragon Cooperatives. Humanistic Management Journal, 5(1), 105–115. https://doi.org/10.1007/s41463-020-00093-8
Whyte, W. F., & Whyte, K. K. (1991). Making Mondragon. The Growth and Dynamics of the Worker Cooperative Complex (2nd edition). ILR Press.
You are so right, and I read some of these materials in my research. I admit that I lumped many of these into my "educational materials" point which was maybe too vague. What I meant more specifically is that, though Mondragon has been a successful working model for decades, the case study still isn't as well known internationally as it should be. Apart from a few articles written in the mainstream media (the ones you point out), most of these are PDFs written for academic and niche journals. My point was that there need to be a lot more of us working to make Mondragon a much better understood and more widely known model internationally, because it's very much one we should all be learning from. I apologize if that wasn't clear, and I appreciate you pointing out these additional resources for other readers who want to research the model and dig deeper.
Hi. Very interesting exchange. Thanks to Elle and the other participants. I've been working in Mondragon for many years and most managers I've heard talk about this say quite openly that they created foreign subsidiaries to protect employment / the co-ops at home in the Basque Country. If their conventional competitors located in low-wage countries and significantly lowered their production costs, then the co-ops are, at some level, obligated to do so. ... though it is a complicated debate. Many agree with German Lorenzo about the lack of suitable legal structures (and financing mechanisms) for worker co-ops in many countries, though some commentators argue that other kinds of legal structures could be used to share ownership in those places. Other multinationals that share owneship broadly with employees in their home countries have found ways to do it in at least some of their foreign subsidiaries. W. L. Gore (of Goretex fame) is an example. ... Many think it is partly a question of priorities and risk aversion. The issue has arisen several times over the years in Mondragon group-wide debates, but serious action has not been taken. Some enteprising, committed Mondragon co-op will have to "take the plunge" at some point if others are to begin to be persuaded. It's a tough one.
Thank you so much for this perspective Fred, I so appreciate it! I'm very curious about the idea of how this model can be replicated both within and outside of Mondragon so this is helpful to understand.
What a concept! I have always promoted employee owned businesses. Out goal and process should become activist in pursuit of this kind of reality. Wonderful essay!
Thank you so much! I'm so with you there!
I can't decide what I love more, here! The article itself or the comments discussion! I feel like I'm reading a Cliff's Notes of economic evolutionary thought in late stage capitalism and what comes next for local, state, and global economics and finance. I want to spend time digesting all of this and researching more. And this kind of avid engagement and dialogue is exactly why I will keep throwing money at this work. The capitalist in me appreciates exchanging my funds for the services and goods being provided here and the optimistic futurist in me recognizes the enormous potential of this collaborative creation and distribution of knowledge by all of us who engage with Elle's products and services. Thank you!!
Lee, I can't tell you how much this means to me. Thank you so much for taking the time to thoughtfully engage with my work. I so resonate with the struggle of, "yes capitalism is the best economic theory we've experienced so far, AND it could work so much better!" I'm still piecing together what that could look like, but I'm grateful to explore that here with so many incredibly smart people!
I’m curious what makes this a capitalist model? It seems like it’s an instantiation of the idea of workers control on the means of production. And is perhaps inspired by the anarcho-syndicalist organizational forms that rose up during the Spanish civil war?
I see that they have clearly had to think about how to build productive companies in a larger capitalist context. But the capitalist class structure where a small group of employers control most of the wealth at the expense of the majority sounds absent from their community based on the description. Their emphasis on creating new mindsets toward life and wealth also has a revolutionary feel, and strikes me as resistant to a number of aspects of capitalist culture (prioritizing self interest, consumerism).
Just a few thoughts. I’m curious why folks think this is capitalism?
I think the misunderstanding here is in how we think about capitalism. It is often thought of in the same vein as communism, as a way to structure society, but capitalism is really far more observational than prescriptive. Our (western) society really isn't capitalistic in the way a communist society is communist.
Current society really doesn't care or prescribe how companies should be run or owned. You can start companies with a single owner, owned by many shareholders, owned by nobody as non-profits, or indeed employee owned, society really doesn't care either way.
But we can observe than when people get this freedom to structure companies however they want, the vast majority end up structured by the capitalistic model with owners and employees. There can be many reasons for this, and we can think that this is an unfortunate outcome, but the really interesting question is if there could be a better model, and if more people knew about it, could it eventually take over as the dominant model.
Employee owned companies are interesting because they could potentially end up being that better model.
This is very well said. Capitalism isn't an ideology like socialism or communism, it's what naturally evolved out of our desire to trade with one another. Companies compete on the market, and the owners of them become wealthy (or not) in the process, but how the company is configured on the backend doesn't really matter to that process.
However, we are starting to realize that there are alternative ways of configuring companies on the backend that might be better, and there are things our governments can do to incentivize those models (even while the other ones still exist.) Until now, there has been an incentive to wind up with the "owners and employees" model because of the simple fact that the other models didn't exist as a business structure. At some of its subsidiary plants in China, for example, Mondragon isn't legally able to make those plants cooperatives so they have to give those workers their "profit sharing" through annual bonuses. Cooperatives and employee owned businesses only started getting these incentives in the last few decades!
Thankfully, I think we are starting to see these as better alternatives and we are seeing that reflected in government policies!
I actually think that employee owned businesses are much more common than we are usually aware of. It is easy to look at cooperatives like Mondragon, and notice how different they are, but employee owned businesses are actually all around us and have been around since the start of capitalism. They are just not noticed, because they are largely reserved for high-skill/high-compensation businesses, like law, accounting, finance, and medicine.
General Partnerships are a very (if not the most) common way to structure businesses composed of high-skilled individuals, and are all around us. There may be some variation in their structure, some with all employees as partners and some with distinction between partners and salaried employees, but all are without external ownership.
Some, like Venture Capital, even have found ways to get outside investment without giving up ownership and control. They do this in the form of Limited Partners (LPs), that invest money in the business to get a share of the profit, but without getting any say in how the business is run.
I think it could be very interesting to do a deeper dive on the similarities and differences between this and the co-op model. There might be a more encompassing model to be found in the intersection.
It's true that there are plenty of cooperatives and employee-owned businesses, but that doesn't make them common. Today there are roughly 6,322 employee owned companies in the US. There are 1,030 in the UK. And as I show in this post, there are only 11.1 million worker-owners globally, out of 3.39 billion total workers—that’s only 0.33% of the working population. Very miniscule.
General partnerships are interesting, but that doesn't mean they provide equity to employees. There are certainly prominent tech companies that do, and you're right that it would be great if we could include some of those in our stats—I'll look into that. Still, most equity packages are reserved for senior employees, not all employees. And at private companies most employees won't see the benefits of that equity unless the company sells or goes public so it's kind of imaginary until then. But you are very right that it's a segment worth investigating.
I think that General Partnerships are easily overlooked as a model of employee ownership. Alone in the US there are approximately 450.000 law firms (and then there are also all the accounting, finance and medical parctices structured like this).
With law firms, they are actually required by law to be partnerships, as they can only be owned by lawyers, so there can be no outside investors. It even goes further than this, in that in most firms only practicing lawyers can be partners, so if you stop working you have to transition to an "in counsel" role, where you no longer have ownership.
Ironically, this is probably the most anti-capitalist model you can think of, in that only actual workers can be owners, with no room for participants that only offer capital.
This model is easily overlooked, since it can seem a bit elitist, being mostly used in the highest earning segment of business, and also because partnership is rarely extended to all employees (it would be a rare firm where even the receptionist was a partner as well). But there is no intrinsic reason that this couldn't be the case.
It is an interesting model because it has a long history and all the legal infrastructure in place. Almost every country allow general partnerships or something very similar. And in contrast with cooperatives, it has no problems attracting very highly skilled employees.
That makes sense and yes I agree! I think in my view a central feature of the capitalist model is the separation between owners (capitalists) and employees (workers). In that relation the owners have the power over the company and are not really answerable to the workers. The interesting thing to me about this setup is that it breaks down this divide. The workers are the owners, and the people who manage the company are answerable to their democratic power. It seems like a promising approach!
I so agree, I think the breakdown of this divide is really interesting. And it can happen right now within our existing business structures without having to overhaul our whole economic system!
This is super interesting! I feel like I'd vaguely heard of Mondragon before but I definitely didn't know what they did. I hope information about them can be more widely spread in the future, starting with your essay of course!
Their story got me to reflect about capitalism too. Like many, I'm quick to blame capitalism for everything that's wrong with the economy today but it's worth remembering that we might not have to abolish it completely to find a better solution. Thank you!
We definitely need these ideas spread far and wide, because we certainly don't need to abolish our entire economic model to make it better!
If only revolution & anarchism weren't so romantic... (kidding)
Honestly though, I think some people think that way!