Social ownership democracy

Debates about alternatives to capitalism in post-Rawlsian political philosophy have focused on property-owning democracy and market socialism as the most promising socio-economic regime types. This paper argues that corporations in property-owning democracy and market socialism remain prone to tendencies to exploitation, either exploitation by investors or exploitation of investors. Hence it argues in favour of a third alternative, which it calls the ‘Social Ownership Democracy’. In such a regime, corporations realize three principles: (i) the anchoring of a non-exploitative social purpose, (ii) the adoption of a control structure aimed at realizing this purpose and (iii) the subordination of profit extraction to this purpose. The paper argues that pure forms of cooperatives and foundation-owned companies best realize these principles, since they remove outside investors who may be financially incentivized to maximize profits by exploiting other stakeholders. In the final part, it also discusses impure forms, which allow outside investment by long-term-oriented private investors, state or family ownership, as well as hybrid forms, where outside investors invest in cooperatives or foundation-owned companies. These may be needed to finance social ownership corporations in the non-ideal situation where they have to compete with regular, investor-owned corporations.