Robert C. Hockett of Cornell Law School has posted an interesting article, What Kinds of Stock Ownership Plans Should There Be? Of ESOPs, Other SOPs and “Ownership Societies” which is forthcoming in 92 Cornell Law Review (2007). The article is the third in a trilogy that examines the ideal of, and the paths to, an “ownership society” in America. This third piece looks at corporate equity ownership as the missing piece of a three-legged stool that could support an ownership society. Here is the abstract:
Present-day advocates of an ownership society (OS) do not seem to have noticed the means we have already employed to become an OS where homes and human capital (higher education) are concerned. Nor do they appear to have considered whether these same means – which amount to publicly enhanced private credit markets – might be employed to spread shares in business firms, with a view to completing our OS. This article, the third in a series, seeks tentatively to fill that gap. It does so first by demonstrating how the Employee Stock Ownership Plan, or ESOP, in effect replicates our home and education spreading programs in piecemeal fashion. But piecemeal replication, the article shows, is not sufficient; a completed OS requires complete replication. So the article, second, generalizes from the ESOP along two salient dimensions – what it labels the patronage and credit dimensions – in order both to complete SOP-financing’s replication of our federal home- and higher-education finance programs, and with that our OS itself. Our OS is, in effect, a three-legged stool that awaits its third leg.