Funding Self-management

Abstract

Despite the many advantages that cooperatives are supposed to bring, there are relatively few of them under capitalism. In section 4 of chapter one consideration was given to some possible theoretical explanations for this fact. These explanations turn on the question of financing the self-managed firm, and the conclusion of this discussion was that the success of a self-managed economy or a self-managed sector under capitalism depends upon firms being largely externally financed. Successful self-managed firms do in fact appear to have a substantial measure of external financing. The Mondragon cooperatives are partially financed by a bank, the Caja Laboral Popular, while Danish cooperatives are, to some extent, financed via trade union and labour movement institutions. Both the Mondragon and the Danish cooperatives are discussed in chapter four, which also considers more detailed empirical evidence supporting this view of financing.