Cooperative Enterprise: The Libertarian Case


It has often been assumed that a libertarian society would consist of predominantly corporate businesses managed by employers and CEOs. Seeing the way our economy is organized in the present day it would make sense to make such assumptions. However, is it not possible that a laissez-faire economy with predominantly worker-run businesses could exist? This isn’t to say that worker ownership is the default. Nor am I saying that corporate businesses need to be abolished for there to be freedom. What I am explaining in this article is a means by which a cooperative enterprise could be more frequent in an economy; a means best known as freedom.

When one asks about the harmful conditions of the workplace, the immediate response by the pro-libertarian is “workers can always start their own businesses.” What the pro-libertarian fails to recognize is that currently existing markets are not truly free markets and should be treated as such. In a truly free market economy anyone could start their own business, but in today’s market economy government regulations make it difficult for new businesses to operate. This isn’t to say that regulations are the only factor in the prevention of new business of being created, but it can’t be denied that the play a big role.

You may be asking yourself: “what does any of this have to do with worker control over industry?” The answer is more than you think. To understand what I am talking about, let’s consider a situation where all regulations that had previously prevented individuals from starting their own business, had all been abolished. Now individuals who were originally workers for bigger companies are now self-employed. However, since production can require cooperation between several people, the now self-employed individuals must become employers to new workers. Unlike the employers of the bigger companies, these new employers will have a greater role in the labor side of production. The cycle repeats itself until the economy becomes more decentralized and employer-employee relationships dissolve.

To sum it all up in a sentence: abolishing regulations that restrict entry into the market will lead to greater competition between businesses in the labor market. As such, the differences between workers’ wages and employer salaries will diminish. This isn’t a new idea and these arguments aren’t new either. Historically, the liberty movement was composed of individuals like Benjamin Tucker and Lysander Spooner who believed that state interference in the market was the primary cause of poor worker conditions. As such, they believed that free market anarchism was the best way to end the poor conditions of the working class. Today, free-market anarchist think tanks like the Center for a Stateless Society (c4ss for short) echo the ideas of the original liberty movement as they also believe that freedom in the market is the best way to achieve freedom for the workers.

The point of this article isn’t to say that cooperatives are a necessity or that they are in fact the natural outgrowth of free market. Rather my point is that co-ops might be the natural outgrowth of a free market and if they in fact are, libertarians shouldn’t reject them. Libertarians that defend inequality in our system, fail to see just how state sponsored the inequality in our system is.

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Bhavin Patel is a student in high school as well as a geolibertarian (Georgist libertarian). He plans to major in computer science and minor in economics when he gets into college.