Recent calls to ‘seize the means of production’ raise questions about collective economic models and their real-world track record
In June 2025, New York City voters handed the Democratic mayoral nomination to State Assemblyman Zohran Mamdani, a self-described socialist and vocal advocate for economic redistribution. Mamdani, whose policy agenda includes city-run grocery stores and publicly controlled housing, came under renewed scrutiny after a resurfaced 2021 video showed him describing “the end goal of seizing the means of production” as a core tenet that socialists should champion, even when politically unpopular.
The phrase, often associated with Karl Marx and 20th-century communist regimes, sparked outrage among former refugees from socialist countries, several of whom described the rhetoric as “dangerous and scary” in interviews with the New York Post. Others noted the irony of such language gaining traction in America’s largest city, a financial and corporate capital built overwhelmingly through private enterprise.
Mamdani’s nomination has renewed interest in a recurring question: if collectivist economic models offer a superior alternative to capitalism, why have they so rarely resulted in the creation of large, competitive businesses? Specifically, where are the Fortune 500-sized companies built entirely by workers, equally owning and operating the enterprise from day one?
The Myth of “Employee-Owned” vs. “Employee-Created”
To many voters, “employee-owned” businesses are seen as progressive, equitable, and morally preferable to traditional corporate structures. In Vermont, several companies have adopted the employee ownership model through ESOPs (Employee Stock Ownership Plans), including King Arthur Baking Company and Gardener’s Supply. Gardener’s Supply, however, filed for Chapter 11 bankruptcy in June and is expected to be sold to an Indiana-based firm, marking a possible end to its locally controlled ownership model. But these are not businesses that were launched from scratch by employees acting collectively. They were created under traditional ownership, built over time, and then transitioned into employee ownership after decades of capital formation.
By contrast, the notion of an “employee-created” enterprise — where a group of workers pool resources, assume shared risk, and build a competitive company from the ground up — is exceptionally rare. In practice, there are few documented cases of large-scale success under this model. Most worker cooperatives in the U.S. are small-scale and local: bakeries, home care agencies, or small tech collectives. Few surpass $10 million in annual revenue. Fewer still make it to national markets.
One often-cited exception is the Mondragon Corporation in Spain, a federation of worker-owned cooperatives founded in the 1950s. While Mondragon employs tens of thousands today, it was seeded under unusual postwar circumstances with external financial backing and legal protections that helped it scale — conditions not easily replicated elsewhere. Even within Mondragon, new employees typically do not gain equal ownership immediately, and some subsidiaries operate under conventional hierarchies.
Incentives, Risk, and Organizational Scale
Economists and business historians cite several reasons why large collectivist ventures struggle to materialize.
First, risk and capital formation remain obstacles. Founders of successful businesses typically take on personal financial risk, invest significant time, and forgo short-term income to pursue long-term payoff. Equal ownership structures can dilute incentives and create coordination challenges, particularly in the early stages when strategic decisions need to be made quickly.
Second, merit-based systems tend to outperform egalitarian ones in high-skill sectors. Competitive industries reward innovation, efficiency, and strong leadership — qualities that are often slowed down by group consensus models. When rewards are evenly distributed regardless of performance, the incentive to innovate or outperform diminishes.
Third, collective ownership does not inherently solve for competitiveness or scalability. Businesses that grow beyond a certain size often require centralized decision-making, defined roles, and compensation models that reflect differing responsibilities — features that conflict with strict egalitarian frameworks.
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Cultural Undercurrents and Local Echoes
While Mamdani’s remarks reignited debate over state control of industry, similar ideological signals have appeared at the cultural level. In Vermont, a University of Vermont economics professor recently drew headlines after suggesting that “everybody shoplifts,” framing acts of petty theft and informal exchange as natural responses to capitalist systems rather than criminal behavior. While not a formal policy position, it reflects a growing tolerance for undermining market norms — in this case, property rights — under the banner of social critique. The professor’s comments echoed a broader trend in academic and activist circles where traditional structures like private ownership, pricing, and profit are increasingly viewed as sources of inequity rather than engines of production.
These arguments, like Mamdani’s, position themselves as bold alternatives to capitalism — but in both cases, large-scale evidence of success remains absent. If redistribution or informal resistance to market systems leads to better outcomes, there’s little real-world proof. What does exist is the economic consequence: increased costs, weakened incentives, and the erosion of the systems that make widespread prosperity possible.
A Question Still Unanswered
Supporters of democratic workplace structures often respond by pointing to structural barriers: lack of access to capital, legal complexity, and a business culture that favors traditional hierarchies. While these are real constraints, they don’t explain the absence of even a handful of large, voluntarily formed worker collectives at national scale — especially given decades of ideological enthusiasm and academic advocacy.
In the end, Mamdani’s call to “seize the means of production” may spark debate. But it also highlights a gap between rhetoric and reality. If collective ownership is the future, the burden of proof isn’t just moral — it’s practical. The economic question remains unanswered: where are the examples of large-scale success built by the model being promoted?
Until such examples materialize, the conversation will likely remain aspirational, not operational.
Dave Soulia | FYIVT
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