Cornell Law Review Volume 92 Issue 5

What Kinds of Stock Ownership Plans Should There Be? Of ESOPS, Other SOPS, and “Ownership Societies”

Present-day advocates of an “ownership society” do not seem to have noticed the means by which, since the 1930s and 1960s respectively, America has become an ownership society already where homes and human capital are concerned. Nor have those advocates considered whether these same means, which amount to publicly facilitated private financial engineering, might be employed to spread shares in business firms as widely as we have spread homes and higher educations.

This Article, the third in a trio of pieces devoted to exploring what a contemporary ownership society consistent with American values, endowment psychology, and legal tradition would be, endeavors to begin the process of filling that gap. First, it shows that there is indeed a gap to be filled—that firm ownership remains nowhere near as widespread as home and humancapital ownership. Next, the Article shows that the Employee Stock Ownership Plan (ESOP) can be viewed as a tentative, but incomplete, first step toward filling that gap.

The Article accordingly generalizes from the ESOP along two salient dimensions—patronage and credit—in order more fully to replicate our federal home and higher education financing programs in the realm of stock ownership plans. It first proposes a number of analogues to the ESOP grounded upon nonlabor patronage forms. It then sketches a “capital mortgage” financing program that is the full analogue to our present-day methods of home and higher education finance.

Our fuller ownership society, the Article concludes, is a would-be “threelegged stool” that awaits its third leg.


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