Economic Organizations Associated with European Labor Movements: A Source of Governance Insights for Blockchain-Based Organizations
The blockchain technology offers a rich design space that combines economic incentives, algorithmic commitments, and immediate payments in a secure and verifiable environment. Decentralized autonomous organizations have been continuously developed since 2016 and their owners and participants typically share mutual economic or non-economic interests with each other.
Interesting historical and economic lessons from the European context can be applied to these organizations. This research proposal will investigate three strands: union-owned companies, worker cooperatives, and cooperatives. While many cooperatives have thrived, union-owned companies have often struggled due to mismanagement. The research will analyze the governance models used and examine the historical and economical reasons behind the difference in success between these organizational structures.
What is the objective of the project?
This research proposal builds upon the groundwork developed in the book "Artificial Intelligence and Blockchain for Social Impact", published by Routledge in November 2022.
The proposed research project will conduct a detailed analysis of governance models used in union-owned companies, worker cooperatives, and cooperatives in the European context. These organizations are a rich source of information:
- Union-Owned Companies: Across Europe, there have been examples of unions owning banks, retail companies, printing companies, hotels, and insurance companies. However, some of these organizations have experienced issues, often attributed to mismanagement. The research will trace the history of these cases.
- Worker Cooperatives: In some cases, a group of employees has come together to purchase an organization as the existing owners retire or in an effort to save it from bankruptcy. Several high-profile cases of worker cooperatives have emerged in recent years. It will be interesting to analyze how they decide on the profit distribution and strategic decisions.
- Cooperatives: There are also examples of cooperatives in which a group of individuals own production facilities, banks, or purchasing cooperatives. These are often tied to unions or the wider labor movement. These organizations have been found to be more resilient and long-lasting, with many still flourishing today. Many of these cooperatives were founded with the goal of joint activity or the pooling of resources for a specific purpose, such as fighting the South African Apartheid system or for the purpose of purchasing power. For example, Nobel laureate Muhammad Yunus has cited the German Raiffeisen system as a source of inspiration for the modern Grameen Bank.
The examination will include meeting notes, governance mechanisms, and articles of association as well as annual reports and secondary literature to determine the key success factors for the most effective governance structures and how they can be adapted to the Ethereum ecosystem.
By analyzing successful and unsuccessful governance structures in the European context, the project aims to provide a broader perspective on the factors that contribute to their outcomes and the potential for these organizations to learn from each other.
What are the outcomes?
The most important outcome of the research proposal is a study outlining the most effective governance mechanisms. This will be helpful for developers and entrepreneurs to think through the implications of different governance structures. Projects can also be expected to be more successful when the governance structures are more efficient.
What is the grant scope?
This project entails analyzing the governance structures and mechanisms of at least 100 economic organizations that are associated with labor movements or unions. In addition to conducting this analysis, the project also involves reviewing and interpreting the findings and presenting them in the form of a report.
Who is responsible?
Wolfgang Spiess-Knafl will be solely responsible. He will work 8 months (2 days per week) on the data collection, the analysis as well as the publication of the research paper.
Wolfgang has published extensively on related topics ranging from blockchain, to policy development for the social and employment sector and social finance. The list is a selection of the publications.
What is the methodology?
The research methodology comprises both primary and secondary literature. The primary literature refers to meeting notes, articles of association, and other data pertaining to governance mechanisms as well as annual reports. The secondary literature includes an analysis of the historical evolution of labor movements and unions as well as the development of economic organizations associated with them. Additionally, the research will review literature that covers the economic aspects of these organizations.
The project has a duration of 8 months, divided into three phases.
The first two months are dedicated to collecting both primary and secondary literature. The subsequent four months will be focused on analyzing the gathered data, including conducting interviews with individuals of interest, such as managers or supervisory board members. The final two months will be dedicated to compiling the research report and creating informative infographics.
The staff costs to conduct the project is $35,000.