Producer-owned and Employee-owned Businesses

In this chapter the focus changes and we look directly at the needs of people who are producing goods and services through MOBs, either as self-employed business people or as employees. There are two basic types. First, there are businesses owned by self-employed people who need to co-operate together to provide themselves with services that aid their own production process. Second, there are businesses owned by their employees that are designed so that the value added to the business from the production process is captured by the workforce. Call them, for convenience, producer-owned businesses (POBs) and employee-owned businesses (EOBs). Sometimes the difference between the two is a fine one, particularly in co-operatives that are set up by professional people such as architects, graphic designers or investment managers. Here, the decision to be employees or to be self-employed is not all that important; what is important is that the MOB helps people to be productive and to share the costs of production. Similarly, in developing countries handicraft co-operatives are common, and it is often unclear whether their workforce is employed or self-employed. The best test is whether the returns from their labour are based on the value added to an individually or a collectively produced product; a sculpture co-op is likely to be a POB, a pottery co-op an EOB.