Theory and Vision · 9 min read

Imagine a factory is about to shut down. The owners are ready to walk away, and the workers are about to lose their jobs and collect unemployment. Italy’s Marcora Law, passed in 1985, asks a simple question: instead of paying those workers to sit at home, why not let them use that same money to buy the factory themselves and keep it running — this time as their own cooperative?

Illustration of workers taking collective ownership of a factory.



The Core Idea



Named after Giovanni Marcora, the Italian minister who championed it, the law lets laid-off workers put their accumulated unemployment benefits toward capitalizing a worker buyout cooperative — essentially cashing in future unemployment payments as startup capital. The state backs this up through dedicated funds that provide the financial and technical support workers need to purchase a failing company’s assets and relaunch it as a worker-owned cooperative.

The logic, as one of the fund directors later put it, was that unemployment benefits were money being spent to keep people idle when it could instead expand production and put people to work through cooperative self-management. Rather than a safety net that catches people after a fall, it’s a bridge from job loss straight into ownership.

It hasn’t been static: the law ran into trouble with the EU in the 1990s over state-aid rules and was reworked in 2001 to survive that challenge, then broadened over time to cover not just brand-new cooperatives but existing worker and social cooperatives too.

Italian law also gives workers a right of first refusal when a company is being sold or leased during bankruptcy — the business must be offered to its workers first, and only if they decline does it go on the open market. That right dates to the original 1985 law, was dropped in a 2001 reform, then restored in 2014.



Beyond Saving Jobs



When governments respond to business closures, the default approach is often reactive: unemployment insurance, retraining programs, and economic relief.

The Marcora framework asks a different question: what if workers didn’t have to become unemployed in the first place?

Instead of treating workers solely as recipients of assistance, the Marcora model recognizes them as capable owners and entrepreneurs. Say ten workers at a closing factory are each entitled to €30,000 in unemployment benefits — €300,000 combined. Instead of drawing that money out month by month while unemployed, they pool it upfront and form a worker cooperative. The cooperative uses the €300,000 to buy the factory’s machinery, inventory, contracts, or other productive assets. A cooperative financing institution then steps in with additional investment, loans, and business support on top of that. The factory reopens — but now the workers collectively own and manage it.

The contrast is between two paths. The default one: company closes → workers become unemployed → government pays benefits → productive capacity disappears. And the one Marcora tries to produce instead: company closes → workers pool benefits → public financing helps them → workers buy the business → jobs and production continue.

Public investment is directed toward preserving productive enterprises rather than simply managing their collapse. Workers are not merely labor to be protected — they are stewards of productive assets, local knowledge, and community wealth.



Want more theory like this in your inbox?



New posts every week on cooperative economics, solidarity economy theory, and the ideas driving the movement. No spam — ever.

Subscribe at solidarityecono.my →



Why It Works



Worker buyouts preserve something that traditional bankruptcy often destroys: institutional knowledge. Employees already understand production processes, customer relationships, supplier networks, and operational challenges. Rather than rebuilding an enterprise from scratch, worker cooperatives retain this knowledge while replacing absentee ownership with democratic governance.

Italy’s worker buyout ecosystem has shown remarkable resilience, particularly during periods of economic crisis, as documented in Euricse’s report on Italian worker buyouts. Its success comes from combining three ingredients: supportive public policy, cooperative finance, and strong cooperative institutions working together with workers themselves.

This ecosystem matters. Democratic ownership alone is powerful, but democratic ownership supported by institutions is transformative.

At its core, the law is about redirecting money the government was already committed to spending. Rather than paying unemployment benefits solely to support workers while they search for another employer, it uses that same money to help them become their own collective employer instead. The state isn’t spending more — it’s spending differently, betting on ownership instead of just income replacement.



“The idea behind the law was to consider the ever increasing and huge use of forms of unemployment benefits as a diversion of resources that could instead be used to expand the production base and involve unemployed workers into a productive function through forms of co-operative self-entrepreneurship and management.” — Camillo De Berardinis, Managing Director of Cooperative Finance Enterprise (CFI)



A Different Kind of Industrial Policy



The Marcora Law is often described as an employment policy, but it is equally a form of industrial policy.

Instead of allowing productive businesses to disappear because owners retire or companies face temporary financial distress, it preserves manufacturing capacity, technical expertise, and regional economic ecosystems. Communities retain employers. Workers retain dignity. Capital remains rooted locally rather than extracted elsewhere.

For advocates of the solidarity economy, this offers an important lesson: democratic ownership doesn’t flourish simply because people want it. It requires legal frameworks, financing mechanisms, and public institutions intentionally designed to support it.

Markets are not natural phenomena — they are designed. CECOP, the European federation of industrial and service cooperatives, has documented how worker buyouts across Europe preserve businesses and local economies. The Marcora framework demonstrates that public policy can be designed to encourage cooperation instead of concentration.



Lessons for Cooperative Codebase



At Cooperative Codebase, we often focus on building the digital infrastructure for the solidarity economy: open-source governance software, interoperable cooperative platforms, shared accounting tools, and digital commons that reduce the cost of democratic enterprise.

But software alone cannot build a cooperative economy. We also need institutions that make democratic ownership practical.

Imagine adapting Marcora-inspired policies beyond Italy: public investment funds dedicated to worker buyouts and cooperative conversions; technical assistance networks that help employees navigate ownership transitions; open-source legal templates, governance tools, and financial software that reduce the complexity of cooperative formation; municipal and state policies that prioritize worker ownership when businesses face closure or owner retirement.

Technology can dramatically lower the transaction costs of cooperation, but public policy creates the conditions in which cooperation can scale. For Cooperative Codebase, this is where digital commons and institutional commons intersect. We can build software that simplifies cooperative governance, streamlines legal formation, manages democratic decision-making, and shares best practices across communities. But those tools are most powerful when paired with public policies that actively support democratic ownership.

A recent policy report from The Democracy Collaborative, Right to Own, argues that adapting Marcora-style legislation could dramatically expand worker ownership in the United States. The Marcora Law reminds us that a solidarity economy is built from both code and policy.



From Rescue to Regeneration



Perhaps the greatest lesson of the Marcora Law is that it changes how we think about economic crises.

A business closure does not have to mean the end of an enterprise. It can become the beginning of a democratically owned one.

As many countries face a growing wave of retiring small business owners, alongside increasing corporate consolidation and economic inequality, worker buyouts represent more than an emergency intervention. They offer a practical pathway toward broader economic democracy.

The solidarity economy is sometimes dismissed as aspirational or experimental. The Marcora Law demonstrates otherwise. For more than forty years, it has shown that when governments, cooperative institutions, and workers collaborate, they can preserve jobs, sustain productive enterprises, and expand democratic ownership — not as isolated successes, but as a repeatable economic strategy.

The United States should adopt its own version of the Marcora Law. When a company closes, relocates, or is sold, workers should have the first opportunity to buy it — supported by upfront access to unemployment benefits, public financing, and technical assistance. Instead of spending public money to manage unemployment after jobs disappear, we should invest that same money in helping workers preserve those jobs through cooperative ownership. Workers who built a company deserve the chance to own its future.



Keep Going





This is part of our Theory and Vision series — big ideas, frameworks, and the philosophy behind the new economy. Want to go deeper? Join the Solidarity Economy platform and be part of building it.



Written by the Cooperative Codebase team — Aaron, Israel, and Jamie. Part of the Solidarity Economy Marketplace. Last updated: July 2026.