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

In recent years, there has been growing policy support for expanding worker ownership of businesses in the European Union. Debates on stimulating worker ownership are a regular feature of discussions on the collaborative economy and the future of work, given anxieties regarding the reconfiguration of the nature of work and the decline of standardised employment contracts. Yet, worker ownership, in the form of labour-managed firms such as worker cooperatives, remains marginal. This article explains the appeal of worker cooperatives and examines the reasons why they continue to be relatively scarce. Taking its cue from Henry Hansmann's hypothesis that organisational innovations can make worker ownership of firms viable in previously untenable circumstances, this article explores how organisational innovations, such as those embodied in the capital and governance structure of Decentralised (Autonomous) Organisations (D(A)Os), can potentially facilitate the growth of LMFs. It does so by undertaking a case study of a blockchain project, Colony, which seeks to create decentralised, self-organising companies where decision-making power derives from highquality work. For worker cooperatives, seeking to connect globally dispersed workers through an online workplace, Colony's proposed capital and governance structure, based on technological and game theoretic insight may offer useful lessons. Drawing from this pre-figurative structure, selfimposed institutional rules may be deployed by worker cooperatives in their by-laws to avoid some of the main pitfalls associated with labour management and thereby, potentially, vitalise the formation of the cooperative form