Economic Systems

People care about the organization of firms. Their concerns include alienation in the workplace and participation in decision-making, wage and job security, the risks associated with employee stock ownership and profit-sharing, and a host of other matters. Alienated workers are unlikely to contribute their best efforts to the success of the firm. Employees may wonder whether the information they reveal now will be used against them later, or whether authority delegated today will be revoked tomorrow. Information technology may make worker knowledge the most important input to the production process, but workers who fear downsizing may be reluctant to invest in skills that would only be valuable at their current job. Globalization expands export markets but simultaneously poses risks to wages and jobs. Employee stock ownership is often claimed to increase productivity, but employees may well hesitate to place their life savings in the hands of their own employer.

Many of these dilemmas would be mitigated or eliminated if workers had ultimate control over the firms to which they supply their labor. Presumably if workers ran their own firms they would feel less alienated; they would willingly disclose information that might improve efficiency; they would be less worried about layoffs, downsizings, or plant closures; and they would closely monitor how their savings were used by the firm. Why not, then, adopt an economic system in which workers rather than investors hold ultimate authority within firms? Why not implement a system of workers' control?