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University of Edinburgh

Economic Democracy: The Cooperative Alternative

University of Edinburgh via edX

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Overview

What would happen if workers ran their own businesses? Would worker-managed firms make the same decisions as their capitalist counterparts? Could such an economy be efficient? What policies could be deployed to promote a cooperative sector?

This course will focus on these central questions as we discuss the internal impact of employee ownership; productivity, governance and management, as well as the external impact of employee ownership; spillovers for health, democracy, and the local economy.

We will also discuss the simple economic theory of the labour-managed firm. Cooperatives have many attractive features, including high productivity. But they account for a relatively small proportion of GDP in most economies. We analyse possible reasons for this apparent paradox. There is widespread interest around the world in cooperatives as an alternative to the capitalist corporation, particularly since the financial crash of 2008. Economics and other social sciences sharpen the debate on cooperatives. After taking this course, you will be better prepared to participate in public discussion on cooperatives, join a cooperative, or even start a new one.

Syllabus

"The form of association ... which if mankind continue to improve, must be expect­ed in the end to predominate, is not that which can exist with capitalist as chief, and workpeople without a voice in the management, but the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations, and working under managers elected and removable by themselves.”
- John Stuart Mill, Principles of Political Economy , 1848

  • Block 1. The internal impact of employee ownership: productivity, governance and management.
  • Block 2. The external impact of employee ownership: spillovers for health, democracy, and the local economy.
  • Block 3. Simple economic theory of the labour-managed firm. The “Pangloss Theorem” (if cooperatives are so wonderful, why aren’t there more of them?). Internal v. external financing.
  • Block 4. Long-term viability. Degeneration thesis and policies to counter it. Kibbutzim, Pacific plywood cooperatives, Mondragon. Performance bonds and wage-earner investment funds.
  • Block 5. Cooperativism in the finance sector (with a comparative international focus): building societies, credit unions, etc.
  • Block 6. Community renewables: economic democracy in action.

Taught by

Donald A. R. George, Rick Woodward, Juliette Summers, Jelte Harnmeijer and David Erdal

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4.0 rating, based on 1 Class Central review

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  • Profile image for Midhat
    Midhat @midhat
    6
    In what ways can cooperative ownership and economic democracy address the systemic inequalities caused by capitalism, and what practical challenges might arise in implementing such a model at a national or global scale?, This course lays out the flaws of market capitalism—not just in its failure to equitably distribute resources, but in how it suppresses genuine democratic participation in economic decisions. Proposes replacing hierarchical firms and profit-driven markets with worker self-management, socially responsible planning, and equitable remuneration.
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