Comparison With Other Work Organizations
There are significant differences between ends and means between firms where capital controls labour, or firms where the state controls both labour and capital. Worker-ownership has been described as "a Third Way (centrism)." These distinctions are easily seen when measured by essential elements of commerce: purpose, organization, ownership, control, sources of capital, distribution of profits, dividends, operational practices, and tax treatment. The following chart compares the commercial elements of capitalism, socialism, and cooperative worker-ownership. It is based on US rules and regulations.
| Commercial Criteria | Corporations | State-Owned Enterprises | Worker Cooperatives |
|---|---|---|---|
| Purpose | a) To earn profit for owner, to increase value of shares. | a) To provide goods and services for citizens. | a) To maximize net and real worth of all owners. |
| Organization | a) Organized and controlled by investors | a) Organized and controlled by state | a) Organized and controlled by worker-members |
| b) Incorporated under relevant incorporation laws - varies by country | b) Chartered by relevant level of government | b) Incorporated under relevant incorporation laws - varies by country | |
| c) Except for closely held companies anyone may buy stock | c) No stock | c) Only worker-members may own stock, one share per member | |
| d) Stock may be traded in the public market | d) n/a | d) No public sale of stock | |
| Ownership | a) Stockholders | a) State | a) Worker members |
| Control | a) By Investors | a) By state | a) By worker members |
| b) Policies set by stockholders or board of directors. | b) Policy set by government planners. | b) Policy set by directors elected by worker-members, or by assembly of worker-members | |
| c) Voting on basis of shares held | c) n/a | c) One person, one vote | |
| d) Proxy voting permitted | d) n/a | d) Proxy votes seldom allowed | |
| Sources of Capital | a) Investors, banks, pension funds, the public | a) The state | a) By members or lenders who have no equity or vote |
| b) From profitable subsidiaries or by retaining all or part of the profits | b) From net earnings, a portion of which are set aside for reinvestment | ||
| Distribution of Net Margin | a) To stockholders on the basis of number of shares owned | a) To the State | a) To members after funds are set aside for reserves and allocated to a collective account |
| Capital Dividends | a) No limit, amount set by owner or Board of Directors | a) n/a | a) Limited to an interest-like percentage set by policy |
| Operating Practices | a) Owners or managers order production schedules and set wages and hours, sometimes with union participation | a) Managers order production schedules and set wages and hours, sometimes with union participation | a) Workers set production schedules either through elected boards and appointed managers or directly through assemblies |
| b) Working conditions determined by labour law and collective bargaining. | b) Working conditions determined by labour law and collective bargaining. | b) Working conditions determined by labour law and assembly of worker-members, or internal dialogue between members and managers. | |
| Tax Treatment | a) Subject to normal corporate taxes | a) n/a | a) Special tax treatment in some jurisdictions |
Read more about this topic: Worker Cooperative
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