These results are interpreted by Meade as implying a misallocation of resources in an LM economy and he concludes: “Fully independent labour-managed co-operatives are thus appropriate only in those industries in which there is room for many small-scale enterprises of an efficient scale and in which entry for new competing concerns is easy” (1974, p.824). Meade argues that the range of policy choices for correcting these inefficiencies is very limited: either entry of new firms is substantially