Thoughts on arrangements of property rights in productive assets

Abstract

State ownership, worker ownership, and household ownership are the three main forms in which productive assets (firms) can be held. I argue that worker own-ership is not wise in economies with high capital-labor ratios, for it forces the worker to concentrate all her assets in one firm. I review the coupon economy that I proposed in 1994, and express reservations that it could work: greedy people would be able to circumvent its purpose of preventing the concentration of corporate wealth. Although extremely high corporate salaries are the norm today, I argue these are competitive and market determined, a consequence of the gargantuan size of firms. It would, however, be possible to tax such salaries at high rates, because the labor-supply response would be small. The social-democratic model remains the best one, to date, for producing a relatively egalitarian outcome, and it relies on solidarity, redistribution, and private ownership of firms. Whether a solidaristic social ethos can develop without a confla-gration, such as the second world war, which not only united populations in the war effort, but also wiped out substantial middle-class wealth in Europe-thus engendering the post-war movement towards social insurance-is an open question. © 2013, Lucius & Lucius, Stuttgart.