Greg Dow - Labor-Managed Firms

Labor-Managed Firms

I have written two books on this subject, both published by Cambridge University Press:

Governing the Firm: Workers' Control in Theory and Practice (2003)

The Labor-Managed Firm: Theoretical Foundations (2018)

The 2003 book has no math and is designed to be accessible to non-economists. It includes a discussion of philosophical issues (democracy, equality, community); case studies of workers' cooperatives; an overview of how economists think about firms; a survey of various economic ideas about why worker-controlled firms are rare; a theoretical synthesis; and a policy proposal to facilitate employee buyouts of conventional firms.

The 2018 book is more oriented toward economists and includes quite a bit of math, but also has several verbal chapters that introduce the subject, review the empirical literature, summarize the theoretical argument, and discuss policy issues.

In both books, the main goal is to explain why firms controlled by labor suppliers tend to be rare in comparison to firms controlled by capital suppliers. A secondary goal, especially in the 2018 book, is to explain why these two kinds of firms differ in their distributions across industries, their responses to economic shocks, their productivity and survival characteristics, and other features. I argue that the central reason for such asymmetries is the fact that capital is alienable while labor is inalienable. But I also argue that well-designed public policies could expand the number of worker-controlled firms and improve productivity by correcting market failures.

For a short print interview about my 2018 book, click here.

I gave a Zoom seminar discussing labor-managed firms to the European Network of Workplace Democracy in June 2022. This was an informal and non-technical talk with a 30-minute initial presentation and 60 minutes of questions and answers. If you want to see the video, click here. If you want to download the written notes I used as the basis for this talk, click here.

My 2018 book received an honorable mention for the 2022 Joyce Rothschild prize, given for books that make "a very significant contribution to economic democracy". Click here for my two-minute acceptance speech.

The 2018 book includes updated versions of my earlier journal articles on labor-managed firms. The book chapters are often simpler and more user-friendly than the original articles. My advice is to read the book rather than the old articles. Nevertheless, I give links to these articles below.

Thus far I have published three articles on LMFs since the 2018 book. All are non-mathematical and discuss the intellectual history of the subject. These are listed below with links to each. The 2020 and 2022 articles discuss some debates I have had with other economists. The 2018 article from Annals of Public and Cooperative Economics provides a broad review of how the field has evolved since 1958. It is a good starting point for newcomers to the subject.

Here is a complete chronological list of my publications on LMFs.

The labor-managed firm, Oliver Williamson, and me, Journal of Institutional Economics 18(2), April 2022, 219-236.

The labor-managed firm, Jaroslav Vanek, and me, Journal of Participation and Employee Ownership 3(2/3), 2020, 123-134.

The theory of the labor-managed firm: Past, present, and future, Annals of Public and Cooperative Economics, 89(1), March 2018, 65-86.

The Labor-Managed Firm: Theoretical Foundations, New York, Cambridge University Press, 2018.

Partnership markets with adverse selection, Review of Economic Design 18(2), June 2014, 105-126; published online June 20, 2013, DOI 10.1007/s10058-013-0145-y.

Workers' control in action (I) and (II), in John Pencavel, ed., The Economics of Worker Cooperatives, Edward Elgar Publishing Ltd, Cheltenham, U.K., 2013 (originally in Gregory K. Dow, Governing the Firm: Workers' Control in Theory and Practice, chs. 3-4, Cambridge University Press, Cambridge, U.K., 2003, 45-91).

Worker participation and adverse selection, ch. 10 in Gregory K. Dow, Andrew Eckert, and Douglas West, eds., Industrial Organization, Trade, and Social Interaction: Essays in Honour of B. Curtis Eaton, University of Toronto Press, Toronto, 2010, 203-222.

Collective choice and control rights in firms (with Gilbert Skillman), Journal of Public Economic Theory 9(1), February 2007, 107-125.

Governing the Firm: Workers' Control in Theory and Practice, New York, Cambridge University Press, 2003.

The ultimate control group, Journal of Economic Behavior and Organization 49(1), September 2002, 39-49.

Allocating control over firms: Stock markets versus membership markets, Review of Industrial Organization 18(2), March 2001: 201-218.