A firm can be defined as an organized set of individual agents who participate in a common production process and sell the resulting output on a market. A fundamental issue is who chooses the top managers within the firm. In most large firms, capital suppliers have the authority to hire and fire top managers. In some firms, however, labor suppliers take on this managerial role. Chapter 1 frames a central question facing advocates of labor-managed firms: if workers' control is economically beneficial, why is it so rare? The chapter describes a number of ways in which LMFs differ from conventional capitalist firms, develops methodological principles, and sketches the theoretical argument of the book. A key point is that capital is alienable while labor is inalienable. This difference, together with a variety of market imperfections, can explain many of the observed asymmetries between firms managed by capital suppliers and labor suppliers. The chapter discusses related literature, including previous work by the author, a number of theoretical traditions in the study of LMFs, and the connections between this literature and research on worker participation in conventional firms.