In 1921 there was an experiment in England called the Scott Bader Commonwealth. An entity was founded, but it was slightly different from the ones we are used to. This one had limitations put on it BY ITSELF, not a state.

When the company was chartered, several items were critical in its constitution's creation:

1) A size limitation of 350 workers. If it grows beyond that, a new enterprise is founded upon these principles.
2) A Maximum salary no greater than 7 times the lowest salary, regardless of age, sex, race, etc.
3) The workers function as partners, not employees (i.e., no dictatorial hierarchy)
4) The board of directors is responsible to the workers and the workers have the right to appoint and dismiss directors as they see fit via a general membership assembly.
5) 60% of the net profits are retained for taxes and self-finance (investment in capital, resources, etc), the remaining 40% to be divided into 2 halves: 1/2 to workers as bonuses, the other 1/2 to outside charities or public works.
6) none of the products of the commonwealth are to be sold for the purposes of war.

With these six items, you have the foundation for a non-monopoly cooperative that operates on a partial-capitalist (via use of markets) and partial-socialist (through worker control) system that can expand indefinitely as many small companies.

350 is not an arbitrary number. 350 people is assumed to be around the maximum number of people that you can know fairly well without having a massive system where no one knows anyone else (e.g., MNCs). This allows the workers to be slightly empowered by retaining some knowledge of who they are appointing to leadership positions.

The maximim salary of 7 times the minimum has a purpose as well. First, it limits the class division to a mere factor of 7, not infinity, or rather the limit of the value of resources exploited. Second, it serves a capitalist drive to attain more by gradation of the wage. Third, it doesn't erode class solidarity in the way our current system does, where the sky is the limit.

That every worker is a partner or member in the commonwealth dictates a method of avoiding illegitimate authority within the workplace that scatters creativity, turns people into drones, and alienates workers in the workplace. Removing the power imbalance and classist division further strengthens solidarity between workers, raising morale and making a more fulfilling atmosphere.

Allowing Workers to elect their own representative body to govern their business gives workers a taste of workplace democracy on the same sort of foundations as the Industrial Workers of the World, an anarcho-syndicalist labor union in the US. Beyond that, as the representatives are mandated to do the workers desires, this is a form of indirect participatory democracy, where workers themselves make the policies. This also reverses the alienation (disempowering) processes within capitalist enterprises and gives workers a reason to put effort into it; they have a stake in it.

The division of the profit is to ensure (1) that the commonwealth always improves its capital (facilities, machines, software, etc), (2) rewards workers for their contribution to the productive process, and (3) humanizes the economic system by both giving workers a stake in the enterprise and involving it with the community.

And finally, in the arsenals of war you will not find implements from any commonwealth enterprise for the sole purpose that workers of all countries and none have the same interests, and should not raise arms against each other to fight the ruling classes' wars. Of course, Ernst Bader, founder of the Scott Bader Commonwealth didn't have that idea in mind. He was more interested in seeing peace between all cultures. But that peace necessitates that the people on the local level of all localities see national aggression and "national interest" for what it really is: class conflict between bureaucrats, capitalists, and monarchs.

Now do I support these enterprises? I think they would make an excellent transitionary institution for its common ownership, but ultimately markets will have to be replaced by localized planning for the purposes of sustainability in a world of finite resources, social justice in economics, and the creation of classless (and therefore stateless) societies.


Source: Small is Beautiful: Economics as if People Mattered - E.F. Schumacher