Re: Mondragon: Mondragon papers

[Dellerman@worldbank.org]

Thanks all for getting off to a good start.  Shann's comment is provocative from
two viewpoints: 1. Mondragon-style ownership may be more than he indicates, and
2. capitalist ownership is, in a certain sense, less than is conventionally
thought.

1. In the old debates, the Mondragon structure of having recoupable retained
profits (in the internal capital accounts) was one of the differentiating
characteristics to separate it from what is called "common-ownership" in the UK.
I remember being demonized (along with Robert O) by some in the UK for
advocating the Mondragon structure over the commonownership structure during the
80s.  A theoretical analysis of what "ownership" or rather "membership" means in
a Mondragon-style coop is given in my "Democratic Worker-Owned Firm" book which
is available in a revised form on my website as "The Democratic Firm" at:
http://www.ellerman.org/Books/demofirm.doc

2. A paper specifically on internal capital accounts and a comparison between
the property rights structures of democratic firms (e.g., Mondo coops) and
conventional firms is developed in the paper:
http://www.ellerman.org/Econ&Pol-Econ/icaccts.doc

This paper goes into the sense in which there is no "ownership of the firm" in
the conventional private property market economy.  Nota bene: I am not saying
that there should not be "ownership of the firm"; I am saying that there is no
such thing in a capitalist economy.  It is an old and important error that goes
back to Marx and his ill-drawn analogy with feudal land rights.  "Ownership" is
not how a market economy differentiates between "being the firm" and "being a
resource provider to the firm."

By the way, one way to rephrase the whole question in more ordinary terms is to
ask it about partnerships.  We could think of a Mondragon-style coop as an
"industrial partnership" (and Robert has used that terminology).  The analogy to
the internal capital accounts are the retained profit accounts in some
partnerships.  When there are sizable capital needs, then partner profits might
be partly retained in named accounts that will be paid out later when there is
less strain on cashflow.  Most of the discretionary features than Shann focuses
on are absent in a partnership.  One cannot sell one's share in a partnership
and an individual cannot at own discretion cash out one's retained profit
account.  Yet I don't find it conceptually helpful to either say that partners
have or don't have "ownership" when the latter notion turns out to be so without
foundation even in the capitalist case.  They are the members of the firm.

Cheers, David
_____________
David Ellerman
Economic Advisor to the Chief Economist
World Bank, Mail Stop MC4-404
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Washington, DC 20433
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Research Site:
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