Liberal Democrats are, at our best, a party of power and of how it is used, utilising social-democratic and liberal ideas.

We have long understood that freedom is not secured simply by declaring rights. It depends on how power is distributed across society; who holds it, who can challenge it, and whether it is accountable. That instinct has shaped our commitment to constitutional reform, civil liberties, and the decentralisation of the state.

But there is one area where this liberal insight remains underdeveloped: the economy.

We pride ourselves on living in a democratic society. Yet for most people, the place where they spend a third of their lives, the workplace, remains one of the least democratic institutions they encounter. Decisions about how work is organised, how profits are distributed, and how firms are run are typically made without meaningful input from those most affected.

Traditional social democrats have responded to this through trade unions, and rightly so. Unions remain an essential part of a fair economy, giving workers a voice and protection within existing structures. But even at its best, this model operates within a system that separates labour from ownership, requiring workers to organise collectively to negotiate with those who ultimately hold power.

A liberal social-democratic approach invites us to go one step further. It asks not only how we protect workers within the system, but how we design the system itself so that power is more evenly distributed from the outset.

This is where worker cooperatives deserve renewed attention.

A worker cooperative is a firm owned and governed by its employees. That matters because ownership is not just about profit; it is about control. When workers are owners, authority, incentives, and rewards are aligned, rather than divided between labour and capital.

This speaks directly to a core liberal social democratic concern: not just mitigating inequality after the fact, but shaping institutions so that power, voice, and reward are more fairly shared from the beginning.

As Harris and Jervis observe, modern democracy largely confines participation to the political sphere, leaving economic decision-making in the hands of private actors. In practice, this means that while citizens may have a vote in Westminster, they often have little meaningful voice in the institutions that shape their daily lives.

Cooperatives offer one way of extending democratic principles into that space.

Within a market economy, different forms of ownership can coexist. Cooperatives are one such form, and an important one. As Normark argues, they contribute to institutional diversity and can help counter concentrations of market power, particularly where weaker actors would otherwise struggle to compete.

For Liberal Democrats, this should resonate strongly. We have always been sceptical of concentrated power, whether in the state or in the market. We champion competition not as an end in itself, but as a means of preventing domination and widening opportunity.

Worker ownership fits squarely within that tradition.

There is also a deeper connection to the liberal idea of community politics. Cooperatives tend to root economic activity locally, anchoring jobs and retaining wealth within communities rather than extracting it to distant shareholders. As Kaswan highlights, this can strengthen both economic resilience and democratic participation at the local level.

This aligns with our belief that power should not only be dispersed, but also devolved, closer to the people it affects.

None of this requires us to abandon pluralism. A liberal economy should not be built around a single model of ownership. Investor-owned firms, public enterprises, and social enterprises all have their place. Nor should we pretend that cooperatives are without challenges. They face real constraints in access to capital, governance, and operating in competitive markets, and they can drift towards more conventional structures over time.

But acknowledging these limits is not a reason to sideline them. It is a reason to take them seriously.

At present, cooperative enterprises are too often treated as marginal. The legal and financial frameworks of our economy are still designed primarily around investor-owned firms, leaving democratic ownership models at a structural disadvantage.

A Liberal Democrat approach would not mandate outcomes. It would do what we do best: reform the system to make better outcomes possible.

That means:

• making it easier to start and scale cooperative businesses
• supporting employee buyouts and transitions to worker ownership
• ensuring fair access to finance
• recognising cooperative models within industrial strategy and local economic development

This is not about replacing capitalism. It is about making it more genuinely democratic.

If liberal social democracy is about the dispersal of power, then it cannot stop at the state. It must also shape the economy.

Democratic capitalism should not stop at the ballot box. For Liberal Democrats, it should, where possible, extend into the workplace itself.

* Jack Meredith is a member of the Welsh Liberal Democrats and an active campaigner and canvasser with Swansea and Gower Liberal Democrats. His writing focuses on democratic reform, social justice, trade unionism, economic democracy, and the institutional foundations of effective government. He has written for the Fabians, Lib Dem Voice, Liberator, Nation Cymru, Bylines Cymru, and Centre Think Tank.