This morning I found myself in the unusual position of not only disagreeing with a columnist in Cityam,  but one from the Adam Smith Institute no less. The item in question was this piece, in response to Nick Clegg’s speech calling for more John Lewis style cooperatives.

Now I have a fondness for the partnership/cooperative model, indeed I’d describe myself as a free-market mutualist rather than a free-market capitalist. (I don’t really have time tonight to go into this in depth, but would heartily recommend this book on the subject for  an idea of where I’m coming from. One of my aims for this year is to write more on this subject) What really annoyed me in JP’s piece was this part:

Thirdly, it is extremely difficult to run a commercial company jointly on a day-to-day basis. If you are a member of any group, you will realise how difficult it is to take decisions. A large company can afford professional executives – a small one can’t. Part owners would be unlikely to accept joint or democratic command at all times. Decision-taking would be an endless trial.

Erm, hello? Does he really think John Lewis involves all staff in every decision? Of course there are managers  and a board of directors as in a PLC (see wiki for a brief summary of the organisation) the only difference is that instead of shareholders they are responsible to their colleagues.

JP also states ‘there are so few large ones in the UK, beyond John Lewis and the Co-operative Group’- ignoring the entire building society sector, historical institutions like our oft-mentioned friendly societies, and huge international groups like Gore (one of the best firms in the USA to work for)

It does seem that there is a bit of hostility to co-op’s in the free market movement, which is understandable given how historically they have been linked to the trade unions and socialists. And it is true employee ownership does make more sense if you believe in the labour theory of value. However co-ops can fit in very well with an Austrian perspective, given how being a partner gives better incentives than being an employee. Overall I got the feeling that this piece was written to appeal to Cityam’s main readership directors who would most likely not be as well paid in an economy dominated by co-ops and to reinforce their existing prejudices.

I was at least also glad today to see a more positive attitude from JP’s college at the ASI Dr Eammon Butler.