Discussions of economic reform focus on two strategies for tempering corporate excess and mobilizing corporations for growth and prosperity: restructuring markets via competition policies and various forms of countervailing power. Populists, Progressives, and New Dealers looked to antitrust, regulatory states, and unions as counterweights to corporations. Contemporary efforts look to not-for-profit watchdogs, NGO certification and standard setting, privatization, and corporate governance reform to upgrade markets and deflect corporations from low road paths. This essay recovers a third strategy for regulating and reforming corporate capitalism: promoting organizational diversity via the formation of parallel systems of cooperative, mutual and local, state-owned enterprises. During the “era of corporate consolidation,” producer and consumer groups in the US formed tens of thousands of such enterprises in just in agriculture, but also in banking, insurance, and technologically advanced industries like electricity and telephones. These efforts produced enduring systems of cooperatives and kindred enterprise in the American economy, creating alternatives to corporations and organizational legacies for present day problem solving. They provided regulators and policy makers with new options and capacities for state intervention. And they demonstrated possibilities for using mixed organizational systems to discipline firms, create and upgrade markets, foster competition, and otherwise solve vexing problems of economic development.
Marc Schneiberg, Toward an Organizationally Diverse American Capitalism? Cooperative, Mutual, and Local, State-Owned Enterprise, 34 SEATTLE U. L. REV. 1409 (2011).