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Worker self-management

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In worker self-management, each productive enterprise is controlled by those who work there. Workers are responsible for the operation of the facility, including organization, discipline, production techniques, and the nature, price, and distribution of products. Decisions concerning distribution are made democratically. Problems of authority delegation are solved by democratic representation. Management is chosen by the worker, not appointed by the State, not elected by the community at large and not selected by a board of directors elected by stockholders. Ultimate authority rests with the enterprise's workers, following the one-person, one-vote principle.

According to veteran World Bank economic adviser David P. Ellerman it's the employment contract that needs to be abolished, not private property. In other words, "a firm can be socialized and yet remain 'private' in the sense of not being government-owned." In his book, "The Democratic Firm", Ellerman stated:

In the world today, the main form of enterprise is based on renting human beings (privately or publicly). Our task is to construct the alternative. In the alternative type of firm, employment by the firm is replaced with membership in the firm. Economic democracy requires the abolition of the employment relation, not the abolition of private property. Democracy can be married with private property in the workplace; the result of the union is the democratic worker-owned firm.

Alternately, in Schweickart's model, workers control the workplace, but they do not "own" the means of production. Productive resources are regarded as the collective property of the society. Workers run the enterprise, use its capital assets as they see fit, and distribute the profits among themselves. Here, societal "ownership" of the enterprise manifests itself in two ways: 1) All firms pay tax on their capital assets, which goes into society's investment fund. In effect, workers rent capital assets from society. 2) Firms are required to preserve the value of the capital stock entrusted to them. This means that a depreciation fund must be maintained to repair or replace existing capital stock. This money may be spent on capital replacements or improvements, but not to supplement workers' incomes. 

Italy's Legacoop and Spain's Mondragon multi-sectoral worker-cooperatives have both been able to reach significant scale and demonstrate long-term sustainability. According to a study conducted by Massachusetts Institute of Technology, the greatest lesson to be learned from these European experiences is the importance of developing an economically integrated network of cooperatives rather than a single cooperative. The report goes on to say:

In a market based economy the cooperative business form suffers from several strategic challenges when operating independently. One worker cooperative on its own is most likely doomed to fail in a highly competitive global economy. However, an ecosystem of several worker cooperatives and support organizations can create an infrastructure that leads to sustained growth and expansion. In Mondragon the cooperative network expanded from a single cooperative polytechnic school to a network of 256 industrial, retail, finance, educational, and research and development firms


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