Worker Cooperatives and Other “Cooperatives”

Abstract

This paper argues that the use of hired workers in non-worker cooperatives violates the moral standards that should be exemplified in cooperatives. All cooperatives (as opposed to conventional corporations) allocate membership rights as personal rights (rather than property rights) to those who patronize the cooperatives—which is evidenced by the one-person one-vote rule. However, most cooperative organizations today do not exemplify any cooperative activity; non-worker cooperatives do not represent any cooperative activity of the members since the only joint activity of the organization is carried out by employees. The idea that cooperatives are democratically governed does not apply to non-worker cooperatives (based on the employment relation) since the members are not choosing the managers or governors of their own activity but of the activity of the people working in the cooperative.

Keywords: Cooperatives, worker cooperatives, employment contracts, democratic governance, personal rights, property rights

JEL Classification: P13, J54, M54, D63, N31, L30