Can employee ownership save capitalism?

In researching purpose-driven companies over the past few years, I've often come back to one conclusion: employee ownership is one of the most important levers we have to overcome economic inequality.

So I was excited to see the new book Ownership: Reimagining Business, Capitalism, and Who Owns What by Corey Rosen and John Case. Rosen is the founder of the National Center for Employee Ownership, a nonprofit organization that has been supporting the employee ownership community since 1981. Case is a former NCEO board member and veteran author.

In talking to the authors, they highlighted the contrast between employee-owned businesses and the traditional model of economic growth. The traditional model, they point out, “divided labor and capital. Capital providers are well rewarded when their investments pay off and absorb risk if they don't. Everyone else depends on their salary and what they can save. Inequality is built into this model, and some inequalities may even be necessary to provide incentives for risk taking. »

This is an extremely important point. While there are many ways for businesses to be sustainable and socially responsible, businesses organized with traditional ownership structures (e.g. publicly listed, VC/PE owned, family owned, LLC) will channel systematically a disproportionate amount of gains go to these owners and thus only increase the economic inequalities that plague our world. So while their products may be environmentally friendly and ethically produced, ultimately companies with traditional ownership structures will also contribute to increased economic inequality.

But Corey and John argue that “there is another model that eliminates this problem entirely. stagnant in real dollars since the 1970s, is rarely enough to accumulate substantial ownership) but through their work.Companies share ownership with employees as a benefit and employees earn it through greater engagement and contributing ideas to help their business grow. In fact, data decisively shows that employee-owned businesses grow faster and provide far more wealth to their employees and communities than non-employee-owned businesses. . »

I am grateful to the many executives of employee-owned companies I have interviewed over the years, such as at Global Prairie, Fireclay Tile and