[PEN-L:1854] Re: Re: Social Democracy and Utopia

[PJM0930@xxxxxxx]

In a message dated 12/19/1998 5:43:43 PM Eastern Standard Time,
delong@xxxxxxxxxxxxxxxxx writes:

<< It's certainly the case that worker-managed firms don't lay off their
 members in downturns (very much). But--at least the last time I talked to
 Laura Tyson about this--she did say that it really seemed true that
 worker-managed firms had a very difficult time expanding in response to
 increased demand. But I don't know nearly as much about this as I should...
  >>
Is that because of the scarcity of labor or because of other inputs such as
capital.
Worker owned firms might tend to promote scarcity of labor in the sense
that a low rate of unemployment means no "reserver army". Also the notion of
co-op membership and the fact that most co-operatives understand themselves
as being based in a particularly community mitigates against the mobility of
labor
(something which has social costs of its own).

One of the advantage of worker owned/managed firms is that precisely because
the tend to not lay off workers, if a large enough sector of the economy they
should help smooth out the swings of the business cycle.  This should obviate,
in part, the need to respond to sharp upswings in demand.

-Paul Meyer