Democratic firms, labor-managed firms, and antitrust analysis

Abstract

The economic literature has spent decades on analytical analysis in order to provide theoretical and empirical evidence on the behavioral differences between firms managed by capital (conventional capitalist firms) and firms managed by labor (including cooperatives and professional associations), mainly with respect to their goals. Conventional capitalist firms aim to maximize profits, while the objectives of cooperative firms are employment and output stability. The antitrust policy has replicated the same treatment used to analyze conventional capitalist firms in order to analyze cooperative firms. Such a decision can increase the probability of type I and type II errors. The problem is less severe when the antitrust cases involve "false cooperatives". In terms of public policy, the article concludes that a concentration or coordination between cooperatives or professional associations is not,per se, a necessary and sufficient condition to cause competitive harm. The idiosyncrasies of these types of organizations require specific analysis and application of the rule of reason. Finally, the article provides a method to filter and to distinguish between real and "false cooperative" behaviors.

Keywords:
Antitrust; Competition; Cooperatives; Monopolies; Cartels