Capital and the Debt Trap is a research monograph by Claudia Sanchez Bajo[1] and Bruno Roelants. The first four chapters provide a general summary of the economic instability afflicting the international economy at the time of publication (2011), noting that cooperatives have on average performed better than traditional for-profit corporations. The next four chapters describe four different cooperatives in four countries. The final chapter provides a summary. Cooperatives seem on average to last longer and be more responsive to the needs of customers and the communities in which they operate, because their shared ownership and participative management generally makes labor more flexible while reducing the incentives of upper management to maximize short-term performance at the expense of the long term.
The Great Recession and cooperatives
The Great Recession was described as "The Mother of All Crises" with substantial wealth destruction for most people (ch. 1). The causes are attributed in part to three traps: consumption, liquidity and debt (ch. 2). Another contributor is the separation of ownership and control in modern corporations (ch. 3). This separation creates perverse incentives for senior managers to do things in their own short-term interests at the expense of the performance of their companies, stockholders, employees, and the communities in which they operate. This is particularly true when senior executives can make millions of dollars in based on the short-term performance of their companies without having to return that money if the company subsequently fails due to behavior that is short sighted at best and often fraudulent.[2]