The Second Mystery: Employee Ownership and the Democratic Economy

James Luchte: Philosophy

employee

This essay, which is quite different than most of my other essays (especially as it unavoidably includes mathematical equations) explores that which is deemed here as the ‘second mystery’, which concerns why there are not more employee owned firms, given that they have been shown to be objectively more productive.  The first mystery, which was the focus of an investigation by Roger McCain in his ‘The Mystery of Worker Buyouts of Bankrupt Firms,’ examines the reason why workers will take over a bankrupt firm, even if it means a short-term fall in wages.  His conclusion is that the Neo-Classical economic theory of John Bates Clark, which depends on the notion of rational self-interest among workers, sets forth a false conception of the interests of the worker as a ‘one-dimensional man’ (Marcuse), and thus, cannot explain the complexity and depth of the decision-making process of workers in the crisis situation of…

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