The Ownership of Enterprise

by Henry Hansmann

The investor-owned corporation is the conventional form for structuring large-scale enterprise in market economies. But it is not the only one. Even in the United States, noncapitalist firms play a vital role in many sectors. Employee-owned firms have long been prominent in the service professions - law, accounting, investment banking, medicine - and are becoming increasingly important in other industries. Farmer-owned producer cooperativese dominate the market for most basic agricultural commodities. Consumer-owned utilities provide electricity to one out of eight households. Occupant-owned condominiums and cooperatives are rapidly displacing investor-owned rental housing. Mutual companies owned by their policy-holders sell half of all life insurance and a quarter of all property and liability insurance. And nonprofit firms, which have no owners at all, account for 90 percent of all nongovernmental schools and colleges, two-thirds of all hospitals, half of all daycare centers, and a q