I think that you are recalling the theoretical Benjamin Ward model rather than actual practice of worker-managed firms. The empirics are a much more complicated business and there are places such as Slovenia where the employment record has been quite good. Evidence is also good for stability of employment in places like the Northwest US plywood coops.
As Bonin, et al in the JEL 1993 showed, the big problem for worker-owned, worker-managed firms under a generally standard capitalist system is financing, not free rider problems or inefficiency. Barkley Rosser On Sat, 22 Aug 1998 11:14:31 -0700 Brad De Long <delong at econ.Berkeley.EDU> wrote:
> >Brad De Long wrote:
> >
> >>Which is different from "fight for social democracy" how, exactly?
> >
> >Well for one, the workers should control the conditions of their labor, not
> >a bunch of elite technocrats.
> >
> >Doug
>
> And to accomplish this we modify the goals of social democracy... how?
> Bigger tax breaks for ESOPS? Tax exemptions for workplaces organized along
> the Yugoslav model?
>
> ESOPS seem to be remarkably hard to encourage, and even when you have them
> collective-action and free-rider problems seem to make the degree of worker
> control that is exercised far from ideal...
>
> Caucus and discussion-based systems seem to produce a different sort of
> system: rule by those who don't have a life, and so can go to meeting after
> meeting after meeting...
>
> The Yugoslave model seemed to have the fatal flaw that successful and
> profitable enterprises did not expand but shrank their production:
> expanding production, after all, meant more workers, and more worker meant
> that the old workers' take-home profits fell...
>
> Every concrete step I can think to try to take beyond the limits of social
> democracy seems to me to be blocked: to have already been tried with
> less-than-desirable results...
>
> Brad DeLong
>
>
-- Rosser Jr, John Barkley rosserjb at jmu.edu