Abstract: Themain purpose of this study is to present evidence on the thesis that the failure to pay a scarcity-reflecting remuneration for the use of collectively owned capital is responsible for the frequently short life-span of producer cooperatives (PCs).[1] First we give a brief account of the theory as developed by Vanek. Next we give background information on the particular participatory species which we investigate- the long-established British producer cooperative. To test implications of the theory we estimate production functions[2] and present comparative information on output, size, investment and factor proportions for British PCs and capitalist firms in the footwear industry during the post-war era. Throughout we proceed as if British PCs were what Vanek calls purely worker-managed. In the third section we recognise that British PCs are not purely worker-managed and examine whether or not implications of the theory of financing are supported once variations in key characteristics associated with that form are taken into consideration. In a brief final section the main findings of the paper are recalled and major implications of the study presented.

　　Subjects: DEMAND (Economic theory); SUPPLY & demand; PRODUCTION functions (Economic theory); FOOTWEAR industry; COOPERATIVE societies; PRODUCER cooperatives; ECONOMIC forecasting; PRODUCTION (Economic theory); CAPITAL productivity; INDUSTRIES; Footwear Merchant Wholesalers; Shoe Stores; Other Footwear Manufacturing; Footwear and Leather Goods Repair; GREAT Britain