The American(+) Tradition of Employee Ownership
Democratic thinking on ownership, old and new
Background: Inspired by a conversation with one of you, dear readers, I decided to consolidate the list of big-name political thinkers who have advocated for employee ownership and/or a broad distribution of asset ownership in democracies.
This isn’t a new idea. In a 2013 interview, Joseph Blasi and Richard Freedman shared research on the American founding fathers’ views on ownership from their book The Citizen’s Share. That tradition extends through democratic thought today.
An update: It’s not unusual to find that someone has already been thinking about a topic. David Ellerman and Tej Gonza, it turns out, have their own (awesome) list of Less-Known Supporters of Workplace Democracy. the most glaring admission from the list below is probably John Dewey, who argued for democracy everywhere. He spent less time talking about the workplace the about educational institutions, but he did argue for “a system of cooperative control of industry” and against “the present system of exclusion.” Read more from Ellerman and Gonza here.
1. The American Founders (and John Locke)
George Washington, according to Blasi and Freeman, “said broad-based ownership would insure ‘the happiness of the lowest class of people because of the equal distribution of property’… Washington gave tax incentives to New England cod fishers to rebuild their fleets after the Revolutionary War on the condition that the captains and the crew sign contracts ensuring broad-based profit sharing among all workers. He also favored grants of substantial land to veterans of the Revolutionary War to make them into self-sufficient property-owners.”
James Madison “warned that inequality in property ownership would subvert liberty, either through opposition to wealth (a war of labor against capital) or ‘by an oligarchy founded on corruption’ through which the wealthy dominate political decision-making (a war of capital against labor).”
“John Adams favored distribution of public lands to the landless to create broad-based ownership of property, then the critical component of business capital in the largely agricultural U.S. Current levels and trends in inequality would almost certainly have terrified the founders, who believed that broad-based property ownership was essential to the sustenance of a republic… Adams favored ‘preserving the balance of power on the side of equal liberty and public virtue (by making) … the acquisition of land easy to every member of society.’”
Thomas Jefferson “wrote to Madison that ‘legislators cannot invent too many devices for subdividing property’ [and] made the Louisiana Purchase to allow for more land ownership by citizens.”
John Locke, famous for the phrase life, liberty, and property which Thomas Jefferson cribbed for the American Declaration of Independence, was no libertarian: he believed that ownership came from “co-mingling” your labor with the land, and that your right to property ownership stopped where your neighbor’s right to subsistence begins.
2. The 19th and Early 20th Century
Alexis de Tocqueville, though he didn’t touch on employee ownership directly in Democracy in America (1835/1840), he admired the widespread equality he observed among Americans and believed that the more equal distribution of property in America than Europe underpinned its success. “Among a democratic people, where there is no hereditary wealth, every man works to earn a living… and, working, he gains the taste for order and the habit of regularity, he wrote.”Tocqueville feared that growing industrialization and the resulting concentration of wealth would undermine American democracy.
John Stuart Mill, as Chris Michael highlights in one of the first written articles on employee ownership trusts, argued that worker ownership “would be the nearest approach to social justice, and the most beneficial ordering of industrial affairs for the universal good.”
Galusha Grow, according to Blasi and Freeman, “managed the Homestead Act through the Congress for Abraham Lincoln, [and] believed that the future of the homestead idea was in workers owning shares of corporations.”
Jane Addams, the Progressive reformer, believed that work relationships should reflect the democratic values of mutual respect, shared purpose, and moral responsibility—not domination. Addams is more about industrial democracy, but her arguments could serve as the foundation for an argument about financial ownership, too.
3. 20th Century Democratic Theorists
Gabriel Almond and Sidney Verba, who helped shape the field of political science, argued in The Civic Culture (2963) that people learned how to participate in democratic society in non-political institutions: families, churches, neighborhoods, schools, etc.
Carole Pateman famously argued in Participation and Democratic Theory (1970) that democratic habits are learned through everyday experiences, including at work. Democratizing workplaces → democratizing society.
John Rawls is often cited as the most important political theorist of the 21st century. In 2001, Rawls and an editor-co-author published Justice as Fairness: A Restatement, in which Rawls advocated for property-owning democracy (more on that here), where capital is widely held enough that all citizens can participate meaningfully in political life.
Robert Dahl’s works are read in every college course on democracy. In A Preface to Economic Democracy (1985), he turned his attention to economics, worrying that inequality and coercive workplaces would undermine democracy and pluralism.
4. Late 20th and 21st Century Thinkers
Elinor Ostrom, Nobel prizewinning economist, showed how communities could self-govern shared resources without centralized control. This insight could apply to workplaces and other communities, where self-governance might prove more effective than your Econ 101 professor might believe.
Michael Sandel’s work has helped revive a tradition that balances considerations of efficiency with those of shared and contested values. His work highlights that market logic can’t solve thorny societal-level policy problems. A logical extension of that might be that inside of organizations, market logic might similarly blind us to more collaborative solutions to problems.
Thomas Picketty revived and popularized the economic case for asset redistribution. In Capital and Ideology, he calls for “participatory socialism” with mechanisms for worker representation and wealth diffusion.
Helene Landemore, Isabelle Ferreras, and Julie Battilana are at the center of a group of scholars reimagining democracy and ownership in the workplace.
But it’s not all roses: Jason Spicer, building on work by Jessica Gordon Nembhard, argues that explaining why the United States has relatively fewer worker cooperatives is straightforward: when cooperatives saw moments of growth elsewhere, backlash against their racially equalizing potential strangled their development.
5. The Anti-Democratic Contrapositive*
Adolf Hitler, in a 1932 speech to executives in Dusseldorf, rejected democracy in the firm and the state you wouldn’t let your company be run by the mediocre masses, he told them—shouldn’t a country be run by a strong CEO, too?
Hitler Would Have Hated Workplace Democracy
When talking about workplace democracy, SMU professor of business ethics, Josh Crabill makes an unusual reference—to a speech by Adolph Hitler.
Employee ownership is not a novel or radical idea. It is a deeply rooted democratic ideal and promoted by some of our most influential political thinkers. As wealth and power concentrate again in the hands of a few, returning to this tradition might offer a new, more democratic economic paradigm. For more on what that could look like, read on:
*I believe this is the first time I’ve correctly used this word! Thanks for reading.
