Daniel Shapiro has questions for left-libertarians. He suggests that an economy of worker-owned firms will degenerate into a hierarchical capitalist one:
It will be irrational for workers to concentrate their portfolio in their own firm, lest it go under. So they will want to sell some of their shares in their own firm and buy shares in other firms. Once that happens it is not hard to see how those who don’t work in the firm will come to own considerable shares of the firm...Those who will supply considerable capital will tend to want some way to monitor that their capital is being used in an efficient manner, which means some kind of say over how the firm is run...
We get the scenario of outsiders coming to have full ownership rights in the firms, and it’s not hard to see how this will lead fairly quickly to an economy which is dominated by capitalist firms.
He's right that it would be irrational for workers to put all their eggs in one basket, and that they'd like to have shares in other firms. But this needn't lead to hierarchical capitalism.
For one thing, Workers who own shares in other firms might well believe that the best protection of their interests is not voice but exit; if they fear firms will be poorly managed, or their interests neglected, they'll prefer to sell rather than insist upon control rights. This is the predominant way in which shareholders protect themselves today. Why should it be otherwise in a left-libertarian economy?
This is especially so because by the time people are smart enough to want a left-libertarian economy, they'll be smart enough to realize that hierarchical management is very often a poor safeguard of shareholders' interests, both because of its inefficiency* and because of the opportunities it gives to rent-seekers.
It may be a firm needs to reach a certain size in order to be efficient, and that too little hierarchy can impede efficiency.
Up to a point.Staffan Canback has estimated that diseconomies of scale usually set in at quite small scales of firm size. This is consistent with the actual size distribution of companies. In the UK, only 0.4% of businesses have more than 250 employees. Daniel's right that access to cheap equity capital can give firms an advantage if they are trying to grow. But this advantage is swiftly counter-acted by the diseconomies of scale - not to mention the fact that, very often, firms' growth strategies fail for other reasons.
Daniel then asks:
Firms which are financed largely by equity will, in a freed market, be those that maximize shareholder value, and how do we know that a substantial number of those firms won’t be hierarchical firms?
The key feature of a left-libertarian economy is that workers will have more choice where or whether to work; this is because there'll be (initially!) a large coop sector and a citizens' basic income which gives workers an outside option. This will put repressively hierarchical firms at a disadvantage. To attract workers to less pleasant working conditions, they'll have to either pay higher wages or employ mindless drones**. Either way, they have higher costs and lower productivity. Will these disadvantages offset other advantages hierarchy might have? Let competition decide!
Now, I don't say this to pretend to that a left-libertarian economy would be a utopia. No economy would be. And here's a problem. Could it be that opposition to such economies is motivated in part by the sort of status quo bias that causes us to prefer present evils over potential alternatives? Put it this way. Say we actually had some kind of egalitarian economy, and some argued for hierarchy. They'd then face the retort: "What? You want to give hundreds of millions of pounds to people like Chuck Prince or Fred Goodwin so they can destroy the economy. Are you bonkers?" Doesn't hierarchy look more absurd when viewed from the egalitarian perspective than egalitarianism does when viewd from the hierarchical one?
* Imagine most national economies where heavily centrally planned. How difficult would you find it to argue that central planning was inefficient? A similar problem afflicts the question of assessing the inefficiency of corporate hierarchy.
** Some people don't like working at John Lewis because, when everyone's your boss, it's harder to shirk.