Wednesday, January 12, 2011

Ecological Economics: Enough is Enough CASSE Report

10. Enough Excess Profits: Rethinking Business
and Production
Alternative Forms of Business Organisation
Not all forms of business organisation have the growth impulse found in profitmaximising
shareholder corporations. There are at least three other types of
business organisation that do not need to pursue growth: co-operatives, foundations,
and low-profit limited liability companies:
Co-operatives: Co-operative organisations are a very old and successful form
of firm. As legal entities, co-operatives pre-date the modern corporation by some
hundred years; they were first formalised as legal entities in 18th century Europe
and North America. The Rochdale Pioneers and Philadelphia Contributorship are
well-known early examples. Co-operatives are built around a common goal that
is beneficial for their members, and are based on equal control of organisational
decisions by all members. In a sense, they resemble a household turned into an
In recent years, co-operatives have seen a renaissance in economic life. In the
UK, John Lewis (a co-operatively owned department store) recovered from the
recession more quickly than many of its rivals,143 and membership of The Cooperative
(the UK’s biggest farmer) is increasing.144 In Germany, there was a
major and favourable overhaul of co-operative law in 2007, which now allows for
limited liability co-operatives. The Mondragon co-operatives in Spain were
established in the mid 1950s. As of 2006 there is even a European Co-operative:
the Societas Cooperativa Europaea (SCE).
Foundations: Foundations are another rather old legal form of organisation. By
definition, a foundation is a non-profit organisation, often with charitable
purposes. Some corporations, such as Robert Bosch in Germany, are owned by
foundations (in this case the Robert Bosch Foundation). Others, such as Mozilla
Corporation, have transferred their patents and copyrights to a foundation (i.e.
the Mozilla Foundation). The engineering and design firm Arup is wholly owned
in trust for the benefit of its employees and their dependents.
Low-profit limited liability companies: A low-profit limited liability company
(L3C) is a rather new form of business that is a hybrid between a non-profit and
for-profit organisation. An L3C runs like a regular business and can be profitable,
but its primary focus is not to make money. Instead, an L3C focuses on
achieving socially beneficial aims with profit-making as a secondary goal. In the
UK, these businesses take the form of Community Interest Companies (CICs). In
Germany there is a similar legal form called “gemeinn├╝tzige GmbH” (public
interest Ltd.), and even a “gemeinn├╝tzige Kapitalgesellschaft” (public interest
corporation). These legal forms often benefit from lower corporate taxes, or even
no tax at all (in the German case).
To support the transition to a steady state economy, policy makers should
encourage these alternative forms of business by (1) making it simpler to set up (or
change to) these forms, and (2) by taxing excess profits in shareholder corporations....

see the full document at:

from O’Neill, D.W., Dietz, R., Jones, N. (Editors), 2010. Enough is Enough: Ideas for a
sustainable economy in a world of finite resources. The report of the Steady State Economy
Conference. Center for the Advancement of the Steady State Economy and Economic
Justice for All, Leeds, UK.

No comments:

Post a Comment