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A theory of revolutionary organizations

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  • Mario Ferrero

    (University of Eastern Piedmont)

Abstract

This paper models a revolutionary organization committed to a project of radical social change over a long time horizon, and therefore, engaged in selling promises to both customers and workers in exchange for current effort and support. To build customer trust and provide members incentives, the organization structures itself as a producer cooperative and sets up a parallel sector that yields cash revenues and provides short-term benefits. This parallel activity, if successful, may represent a temptation away from revolution, but it is subject to competition from other providers or from the state. The main result is that, unlike a profit-maximizing firm, the cooperative reacts to increased competition by shrinking the parallel sector and specializing in revolution; hence, reform expands at the expense of revolution only if the parallel sector approaches monopoly. We find supportive historical evidence in a survey of socialist revolutions and social democracies, nationalist movements, and Islamist insurgencies.

Suggested Citation

  • Mario Ferrero, 2020. "A theory of revolutionary organizations," Economics of Governance, Springer, vol. 21(3), pages 245-273, September.
    • Handle: RePEc:spr:ecogov:v:21:y:2020:i:3:d:10.1007_s10101-020-00238-3
    DOI: 10.1007/s10101-020-00238-3
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    References listed on IDEAS

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    1. Ben-ner, Avner, 1984. "On the stability of the cooperative type of organization," Journal of Comparative Economics, Elsevier, vol. 8(3), pages 247-260, September.
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    Cited by:

    1. Mario Ferrero, 2024. "Left, right, or neither? Islamism as social blueprint," Constitutional Political Economy, Springer, vol. 35(4), pages 500-522, December.
    2. Mario Ferrero, 2024. "The political economy of rights," Public Choice, Springer, vol. 198(3), pages 297-316, March.

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    More about this item

    Keywords

    Revolution; Reform; Producer cooperative; Political competition; Socialism; Nationalism; Islamism;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms

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