ABSTRACT
An attempt is made in this final chapter to design an institutional set–up for an enterprise with the following characteristics.
It makes the income of the workers depend in whole or part on the success of the enterprise as in the cases of the Non–Discriminating Labour Co–operatives and the Capitalist Sharing Firms analysed in Chapters IV and V. It thus preserves any beneficial effects on incentives which may result from this principle.
It avoids the dangers that may arise in a Capitalist Sharing Firm from undue rigidity or stickiness of the shares of the firm's revenue which may be allotted to labour and to capital. The proposed institutional set–up achieves the appropriate flexibility through an automatic inbuilt adjustment of these shares.
It thus removes the large element of direct conflict of interest between labour and capital which, as we saw in Section (h) of Chapter V, can arise from share rigidities; and in this way it makes it easier to arrange for labour's participation with capital in decision–making about the firm's plans for investment and employment.
It avoids the instabilities which were found in Chapter IV to be a feature of Non–Discriminating Labour Co–operatives.
It mitigates the undue reliance on ease of entry and exit of firms into and out of the market which was also found in Chapter IV to be a feature of Non–Discriminating Labour Co–operatives.
It avoids also the undue concentration of risk which we also saw in Chapter IV as a possible result of a Non–Discriminating Labour Co–operative, particularly if it were set up in a capital–intensive type of activity.
It has as favourable an effect on the stability of employment and a more favourable effect upon the levels of employment that might result from Capitalist Sharing arrangements.
