Democratic firms and socialism

Abstract

The distinction between „internally‟ and „externally‟ financed democratic firms was first drawn by one of the most renowned theoreticians of democratic firm control, Jaroslav Vanek (1971a and 1971b), and is generally read as contrasting self-financing firms with those funding investments with third-party capital. In point of fact, the distinction that really matters is that between as) LMFs, i.e. cooperatives that remunerate capital separately from labour and use publicly owned means of production on the one hand and, b) cooperatives which allocate all their revenues (labour and capital incomes) to the partners (specifically, those engaged in production in the period of time concerned from time to time) and do not remunerate capital owners as such. The latter are WMFs, which use privately owned means of production. 1