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Voice Without Say: Why More Capitalist Firms Are Not (Genuinely) Participatory, Justin Schwartz
Voice Without Say: Why More Capitalist Firms Are Not (Genuinely) Participatory, Justin Schwartz
Justin Schwartz
Why are most capitalist enterprises of any size organized as authoritarian bureaucracies rather than incorporating genuinely employee participation that would give the workers real authority? Even firms with employee participation programs leave virtually all decision making power in the hands of management. The standard answer is that hierarchy is more economically efficient than any sort of genuine participation, so that participatory firms would be less productive or efficient and lose out to more traditional competitors. This answer is indefensible. After surveying the history, legal status, and varieties of employee participation, I examine and reject as question-begging the argument that the …
It Ain’T Necessarily So: The Misuse Of “Human Nature” In Law And Social Policy And The Bankruptcy Of The “Nature-Nuture” Debate, Justin Schwartz
It Ain’T Necessarily So: The Misuse Of “Human Nature” In Law And Social Policy And The Bankruptcy Of The “Nature-Nuture” Debate, Justin Schwartz
Justin Schwartz
Debate about legal and policy reform has been haunted by a pernicious confusion about human nature, the idea that it is a set of rigid dispositions, today generally conceived as genetic, that is manifested the same way in all circumstances. Opponents of egalitarian alternatives argue that we cannot depart far from the status quo because human nature stands in the way. Advocates of such reforms too often deny the existence of human nature because, sharing this conception, they think it would prevent changes they deem desirable. Both views rest on deep errors about what it is to have a nature …
Where Did Mill Go Wrong?: Why The Capital Managed Firm Rather Than The Labor Managed Enterprise Is The Predominant Organizational Form In Market Economies, Justin Schwartz
Justin Schwartz
In this Article, I propose a novel law and economics explanation of a deeply puzzling aspect of business organization in market economies. Why are virtually all firms are organized as capital managed and owned (capitalist) enterprises rather than as labor managed and owned cooperatives? Over 150 years ago, J.S. Mill predicted that efficiency and other advantages would eventually make worker cooperatives predominant over capitalist firms. Mill was right about the advantages but wrong about the results. The standard explanation is that capitalist enterprise is more efficient. Empirical research, however, overwhelmingly contradicts this. But employees almost never even attempt to organize …