Fostering Worker Cooperatives with Blockchain Technology: Lessons from the Colony Project

In recent years, there has been an expansion of policy support in the European Union to promote worker ownership of companies. Discussions on the revitalization of worker ownership have been a recurring topic in the discourse on the future of work and the sharing economy, driven by concerns about the restructuring of job nature and the decline of standardized employment contracts. However, the existence of worker-owned enterprises, such as worker cooperatives, remains relatively scarce. This paper aims to explain the appeal of worker cooperatives and examine why they continue to be relatively rare. Taking Henry Hansmann's hypothesis that "organizational innovation enables worker ownership, which was previously impossible," as a clue, this paper explores the potential of organizational innovations such as decentralized autonomous organizations (DAOs) in promoting the growth of worker cooperatives. Through a case study of the blockchain project Colony, this paper aims to establish a decentralized self-organizing enterprise that derives decision-making power from high-quality work. The proposed capital and governance structures of Colony, based on technological and game theory insights, can provide valuable lessons for worker cooperatives seeking to connect globally dispersed workers in an online workplace. From this prefigurative structure, worker cooperatives may be able to avoid some of the major pitfalls associated with labor management and, potentially, activate the formation of cooperative forms by expanding their bylaws to include self-responsibility institutional rules.

This is interesting!