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

organisation.

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 “gemeinnützige GmbH” (public

interest Ltd.), and even a “gemeinnützige 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: http://steadystate.org/enough-is-enough/

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.