The Labor-Managed Firm: Theoretical Foundations - CLEO Skip to main content


In this book, Gregory K. Dow asks the question: “Why are labor managed firms rare in modern economies?” Dow emphasizes the fact that capital is alienable while labor is inalienable. This distinction, together with market imperfections, explains the rarity of labor-managed firms. This book uses modern microeconomics, develops formal models, exploits up-to-date empirical research, and constructs a unified theory that accounts for many facts about the behavior, performance, and design of labor-managed firms.

Dow believes that labor managed firms are likely to have productivity advantages over similar capital managed firms in a range of industries, but face obstacles that similar capital managed firms do not confront. Well-designed policies, he argues, could help labor managed firms overcome these obstacles, while enhancing economic efficiency.

This book was recognized with a Joyce Rothschild Book Prize Honorable Mention. View the acceptance speech by author Gregory Dow below: