The ESOP at Thirty: A Democratic Perspective

Summary

A central irony of the ESOP, thirty years after its recognition in the Employee Retirement Income Security Act of 1974, is that it has succeeded best where it has been used in participatory ways for which it was never intended and is poorly designed. This fact, well attested to by a body of empirical data, presents the question: How can the ESOP, or an alternative thereto, be better adapted to democratic uses? The inquiry takes us away from the grandiose expectations of the original ESOP sponsors and present-day proponents of “shared capitalism” and leads instead to a recasting of the legislative scheme to recognize and encourage the modest role played by democratic employee ownership in American business.