The term “co-op” evokes images of collective farming or crunchy craft breweries. But Virginie Perotin of Leeds University Business Schoolsynthesized research on “labor-managed firms” in Western Europe, the United States and Latin America, and found that, aside from the holistic social benefits of worker autonomy, giving workers a direct stake in managing production enables a business to operate more effectively. On balance, Perotin concludes, “worker cooperatives are more productive than conventional businesses, with staff working ‘better and smarter’ and production organized more efficiently.”

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Contrary to stereotype, the European co-op sector is generally as diverse as any other type of ownership structure, including full-scale factories. Though co-op conversion is often seen as a way to rescue “failing” firms, Perotin’s research reveals that in France from 1997 to 2001 more than eight in 10 worker co-ops starting up during this period were established “from scratch,” not derived from ownership transfers in failing companies (compared to new business formations overall, co-ops had a larger portion of brand-new startups). …

While co-ops vary in form, the underlying philosophy, particularly in Europe, is the co-op asboth democratic enterprise and public trust. Often worker-owned firms are mandated—either by law or corporate bylaws—to reserve a portion of assets for longer-term preservation of the integrity of the co-op model. Even if the owners close or leave the business, these indivisible assets are recycled back into future co-op generations or co-op support organizations. The practice seems less common among American co-ops, but in European co-op culture, Perotin observes, “we set up a collective good, we set up an institution for future generations.”

Worker Cooperatives Are More Productive Than Normal Companies
http://www.thenation.com/article/worker-cooperatives-are-more-productive-than-normal-companies/