In the spring of 2008 I wrote eighty pages arguing that the job I have now should not exist.
The thesis was called "More Productive, More Just: The Argument for Free Market Democracy." Its central claim was that hiring someone for a wage amounts to renting a human being, and that a fair economy would let employment as we know it disappear. Every company would be owned and run by the people who worked in it. Labor would hire capital, instead of the other way around.
I was a senior at Denison University, majoring in philosophy, politics, and economics, a program that let you pick your own classes and bend the major toward whatever you cared about. I cared about what makes an economy fair, and I had found an adviser who cared about it even more. Ted Burczak taught economics at Denison and wrote books in a tradition you could call libertarian socialist, a phrase most people hear as a contradiction and I hear as a description of myself. His course was on economic justice, but the ideas leaked into every class he taught, and from there into me. He once laid out the mechanics so plainly that I still repeat them: a company earns a profit because people rent themselves to it for less than they are worth, and whoever controls the company keeps the difference.
It was the first time I liked school. For years someone had handed me a prompt (write about Tom Sawyer) that every other student was also answering, and the grade went to whoever answered it best. The thesis had no prompt. It pulled together every philosophy and economics class I had taken, and it felt like thinking something new. I wrote it in the library and in empty classrooms around campus, pulled a couple of all-nighters, and skipped parties to work on it. Readers of my last essay will know that skipping things was a habit I brought from high school. Skipping fun was new.
Stand or Fall Together
The argument marches through six theories of justice, one per section, like a lawyer who does not know which judge he will draw. Kant says never treat a person merely as a means, and the employment contract, I wrote, treats a worker as a tool. Rawls, I argued, would pick worker ownership from behind his veil of ignorance. Mill predicted that cooperatives would end the standing feud between capital and labor. Marx worried that work under capitalism cuts people off from what they make. I even drafted Robert Nozick, the libertarian philosopher, who would have hated the paper. He had admitted that his ideal free society would let a person sell himself into slavery, and I pounced: if you cannot accept voluntary slavery, you cannot accept wage labor, because "capitalist labor and voluntary slavery stand or fall together."
I would not write that sentence today. At the time I believed the loudest word in a paragraph did the most work.
The thesis is honest about its own slant. It says, in so many words, that I had not set out to present an unbiased analysis, which may be the most accurate line in it. The table of contents has two section 22s. The bibliography misspells Aristotle's Nicomachean Ethics.
None of that stopped it from earning an A, the best grade I got in college. Burczak encouraged me to go into academia and keep going. I was tempted, because it would have been fun. But I had just spent a year summarizing other people's treatises on how the world should work, and what I wanted was to make one of them happen.
The Plan Required Reading This Paper
The last section of the thesis offers a solution, and I am still a little proud of it. The problem was money. Most workers do not have collateral, so banks will not lend them enough to buy a company, at any interest rate. Most workers also cannot afford to bet their savings on a startup. My answer was a nonprofit venture capital fund. It would give founders the money to start a business, on one condition: the company had to be owned and run by its workers, permanently. In exchange the fund would take a small passive stake (perhaps five to ten percent), enough to see the books, earn dividends to fund the next company, and give its managers a reason to pick winners.
Two sections earlier, the same thesis explains why nobody would take the deal. Equity is the reward on both sides of a new company. The founder gets it for the idea and the work, the investor gets it for the money, and the investor usually walks away with more of the control. Both want to keep as much equity and control as they can, and the workers, who own none of it, collect less than their work is worth, which is the difference Burczak had described.
I saw the hole and patched half of it. The fund took care of the investor's side, because a nonprofit asking for a small passive stake had no interest in control. For the founder, the fund would try to take a stake small enough to make up for what he was giving up, and if that fell short, "it would be necessary for the entrepreneur to believe in the moral arguments set forth in this paper." The business model depended on founders reading my senior thesis. Few have. I also predicted that once the fund had created a critical mass of worker-owned companies, the workers would take up the movement themselves. I wrote "if, or rather once," and I meant it.
One Semester at NYU
My plan after graduation was to become a consultant to worker cooperatives, or to start the fund. The thesis had already explained, in its own section on entrepreneurs, why that plan would fail. Almost nobody starts worker cooperatives, so almost nobody needs a consultant for them.
I also graduated late, and that needs explaining. I had skipped enough of high school (see my last essay) that I did not get into the colleges I thought I would. Denison is an excellent school, but I wanted a famous one, so I did well my freshman year and used the grades to transfer to NYU, which I picked mostly for its place in the U.S. News rankings. I lasted one semester. I did not like NYU. I did like Denison, and I had already fallen for the woman I would marry. I transferred back, happier and a semester behind. Then I took on what Denison calls a triple major, and I finished one math credit short. Since I was not graduating on time, I had not applied for any jobs.
So I took introductory statistics at Georgetown and looked around. Chris Tissue, who is now my chief operating officer, had just been hired into an entry-level job at Callahan & Associates, a Washington firm that does research and consulting for credit unions. Jon Jeffreys, now Callahan's president and CEO, is a Denison graduate. I got an internship.
Credit unions are cooperatives owned by their customers instead of their workers, and they had something worker cooperatives never did. They had Edward Filene, the Boston department store owner who spent a fortune promoting them and had the ear of Franklin Roosevelt, who signed the Federal Credit Union Act in 1934. Thousands of credit unions exist because someone solved their startup problem nearly a century ago. It was the closest living relative of the movement I had written about, and it has turned out to be a big part of the libertarian socialist utopia I still carry around in my head.
Behind the Veil
Eighteen years later I own a company. I bootstrapped CUCollaborate myself, which means I have paid the exact costs the thesis said a worker could not afford, and I have collected the reward it said nobody deserves. Rereading it now is like getting a letter from a smart, sincere person who has never met a payroll.
Some of it was wrong. The thesis argued that worker ownership would spread wealth more evenly, more people would get good educations, more of them would become entrepreneurs, and innovation would rise. I no longer believe the last step. Most people take less risk than I do, and less than most founders, and the cooperatives I know best, credit unions and REI among them, take fewer risks than their for-profit competitors. The profit motive does a lot of the work of pushing people toward risk, and you need risk to get anything new.
Some of it I cannot yet test. The thesis claimed that coworkers who share ownership police each other more cheaply than managers can. I have never worked inside a true worker cooperative, and I have not given away enough equity to know. But the employees who own a piece of CUCollaborate today care a great deal more about how hard everyone else is working, which is at least one data point in my favor.
And some of it I believe as firmly as I did in the library. If you do not own any of the value your work creates, someone is taking advantage of you. The ownership I earned by starting a company gives me power over other people, and I still think that power is unjust, even though I also think I earned it.
Rawls would recognize my problem. He asked people to design a fair society before knowing where they would land in it. I wrote my thesis from exactly that position, owning nothing, so asking founders and investors to give up their equity and control cost me nothing. Now equity in my company is the thing I value most, for the money and even more for the control it gives me over my own work and life. When I offer equity to an employee and they shrug, giving it away gets very hard to do. I assumed in college that most people were wired the way I am. They are not, and I act in my own interest like everyone else, including the author of that thesis.
What I have built instead is a compromise with incentive dynamics, my own included. The target cap table for CUCollaborate is a split in thirds: employees, customers (in my case, the credit unions we serve), and outside capital, so that each group whose effort or money drives the company has a reason to make it fair and a reason to make it grow. We are not there yet. I have turned down venture capital and private equity firms whose money would have made it harder to get there. The Credit Union Formation Fund I am starting now is the thesis's fund, rebuilt around the flaw I found in it. Anyone who puts time or money into a new cooperative earns less than they would owning a company outright. The formation fund gives donors the tax deduction they would get from any other charity, and it gives new credit unions the startup capital nobody else will provide.
I still want to build the original fund, the one for worker-owned companies. It is still on the table. I also still get tied to Marx now and then, and I do not mind. I cannot quote him correctly (something about ability and needs), and plenty of people did terrible things in his name, but the idea that working without owning is unfair has stayed with me since Burczak's classroom.
I spent the next six years at Callahan, first as an intern and later running sales, account management, and product, learning how a cooperative industry works from the inside. That comes next.