Who Owns the Economy

In 2013, one of the world’s most famous worker-owned companies went bankrupt.

Fagor Electrodomésticos, the appliance manufacturer that helped launch Spain’s Mondragon cooperative movement, collapsed under the weight of debt, global competition and Spain’s financial crisis.

For critics, the bankruptcy seemed to settle the debate. Worker ownership, they argued, was an appealing ideal that could not survive the realities of the marketplace.

The critics were half right. Fagor failed.

What happened next is the part Americans rarely hear about.

Rather than abandoning thousands of workers, Mondragon mobilized its cooperative network. Many displaced worker-members were retrained, relocated or absorbed into other cooperatives.

The company disappeared. The system did not.

Which raises a question Americans rarely ask: Who owns the economy?

For decades, America’s economic debates have centered on income. We argue about wages, taxes, inflation, inequality and job creation.

Those are important debates. But they often overlook something more fundamental.

Income determines what people can spend. Ownership determines what people can keep.

Income pays the bills. Ownership builds wealth.

Income helps families get through the month. Ownership creates assets that can appreciate, generate income and be passed to future generations.

Yet American economic policy devotes far more attention to helping people earn income than helping people build ownership.

That imbalance helps explain one of the defining frustrations of modern economic life.

Productivity rises. Corporations prosper. Financial markets reach record highs.

Yet many workers struggle to accumulate lasting wealth.

The dividing line in America is no longer simply between rich and poor. Increasingly, it is between people who own appreciating assets and people who depend almost entirely on wages.

Research consistently finds that employee-owners accumulate more wealth, enjoy greater retirement security and remain in their jobs longer than comparable workers without ownership stakes.

In other words, ownership shapes not only how much people earn, but how much they ultimately keep.

Many Americans still think of employee ownership as a niche idea. The reality is different.

Some of America’s most successful businesses have shown that broad-based ownership can coexist with scale, innovation, and profitability.

Publix, the nation’s largest employee-owned company, generates tens of billions of dollars in annual revenue while employing hundreds of thousands of people.

W.L. Gore & Associates built Gore-Tex into a global brand within a culture of broad employee ownership.

These firms are not charities.

They are not protected experiments. They compete. They innovate.

And they endure.

To be sure, employee ownership is not a cure-all.

Access to capital can be difficult. Ownership structures can be complex. America’s legal, financial, and advisory infrastructure was largely built around conventional shareholder corporations.

But that raises a more interesting question. If employee ownership is so difficult, why does it continue to succeed?

Part of the answer may be that ownership changes how people relate to institutions. People tend to think differently about workplaces when they have a genuine stake in them.

Some Americans hear the phrase “worker ownership” and assume they are hearing an argument against capitalism.

The opposite is closer to the truth.

Employee ownership does not eliminate markets. It does not eliminate competition. It does not eliminate profit. It expands private ownership. It creates more owners.

In many respects, it reflects a deeply American ideal: People who help create prosperity should have the opportunity to build a stake in it.

That idea is becoming more important as millions of Baby Boomers prepare to retire and transfer ownership of the businesses they spent decades building.

Many successful firms will be sold to competitors, private-equity funds or corporate consolidators.

Some of those transactions will make economic sense. Others will move ownership farther away from the employees and communities that helped create the value in the first place.

Yet another path exists.

Employee ownership could become a mainstream succession strategy rather than an afterthought.

Not for every business. But for far more than today.

For decades, America’s economic debates have focused on how prosperity should be distributed after it is created.

The more important question may be who gets the opportunity to own it in the first place.

As millions of businesses change hands over the next decade, Americans face a choice that receives far less attention than debates over taxes, wages, or tariffs.

We can continue treating ownership as the privilege of a relatively small share of the population. Or we can begin expanding it.

The future of American capitalism may depend less on creating more workers than on creating more owners.

What barriers do you think have prevented broader ownership in our nation’s businesses, and what steps can we take to overcome them? I’d love to hear your perspective in the comments.

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