Re: Mondragon: Mondragon papers

[Shann Turnbull <sturnbull@mba1963.hbs.edu>]

Dear Dan

I agree that "voice" is important, if not a vital element of 
ownership.  This is why I would like to see the COG mission statement 
changed to include the word "control" as well as "ownership".

Ironically, shareholders of publicly traded companies have "voice" in 
theory but one that can be ignored in practice unless they own a 
significant percentage of shares.  A further irony is that many of those 
with significant ownership, like financial institutions, do not even bother 
to vote to use their voice.  As a result, fiduciary capitalism is degrading 
democracy.  So I agree with David Ellerman's later posting that "2. 
capitalist ownership is, in a certain sense, less than is conventionally 
thought."  I also agree with his comments about partnerships.

It would seem that what is described as "employee ownership" in the US 
might more accurately be described as "employee financial 
participation"!   But if this is described as "employee ownership" then 
Mondragon meets this description.

However, Mondragon provides much more than financial participation as it 
includes worker control.  Mondragon in my language provides Employee 
Governance with financial participation and contingent ownership.  Or 
perhaps for David Ellerman I should use the phrase "contingent residual 
claimants"?  Stakeholders in OTCs are "deferred residual claimants and 
owners" but their status is not contingent.

If we do not use words precisely we will not be able to distinguish the 
different forms of "employee ownership" such as found at Enron.  Enron 
executive "share ownership" yielded millions while employee "share 
ownership" did not provide a return and they also lost their pensions.

The point is we need to develop a typology and lexicon of ownership and 
control to identify the nuances of the various arrangements. If we cannot 
define what we mean by ownership or control then it is difficult to have a 
rigorous analysis or meaningful  discussion or further the mission of COG.

Regards

Shann


At 01:41 AM 5/4/2002, you wrote:
>Dear Shann,
>
>Allow me to express my view regarding the issue of whether or not
>Mondragon represents employee ownership.
>
>The Mondragon Cooperatives definitely fit under the broadly used
>term "employee ownership". Here in the US, for better or worse,
>we refer to companies as employee-owned whenever they have an ESOP.
>
>The ESOP may only own 3% and have no pass-through of voting rights,
>yet when we say there are over 10,000 employee-owned companies in the
>US, we are including such companies in the count.
>
>I do not believe that the distinction between individual and collective
>claims is relevant to whether or not an enterprise is employee-owned.
>
>If employees choose to organize their ownership in a collective way,
>that is their choice.
>
>On the other hand, when attaching certain public benefits like tax
>breaks or government loans to a form of ownership, I agree that the
>object of the assistance should be more narrowly defined.
>
>In my opinion, the important characteristics of ownership are a voice
>in the governance of what is owned (which the MCC employees have); and
>a share in the profits generated (which the MCC employees have).
>
>It is acceptable for employees to agree to certain restrictions on
>the traditional ownership rights if they believe this serves their
>collective interests.
>
>Dan
>--
>Dan Bell
>International Program Coordinator
>Ohio Employee Ownership Center
>Kent State University
>Kent, OH 44242
>(330) 672-0333 << Direct number!
>(330) 672-3028 general office number
>(330) 672-4063 fax
>dbell@kent.edu
>http://www.kent.edu/oeoc/
>http://cog.kent.edu

Shann Turnbull  Ph.D.
P.O. Box 266 Woollahra, Sydney, Australia, 1350
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