Hostname: page-component-cd9895bd7-gxg78 Total loading time: 0 Render date: 2024-12-24T00:20:38.607Z Has data issue: false hasContentIssue false
  • English
  • Français

The labor-managed firm, Oliver Williamson, and me

Published online by Cambridge University Press:  07 June 2021

Gregory K. Dow
Gregory K. Dow*
Affiliation:
Department of Economics, Simon Fraser University, Burnaby, British Columbia, Canada
*
Corresponding author. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

More than 30 years ago, I engaged in a debate with Oliver Williamson over the theoretical structure of transaction cost economics (TCE). This debate had its origins in our conflicting views of the labor-managed firm (LMF). Williamson believed that such firms were rare due to their inefficiency while I believed they might be rare due to market failures. Here I clarify my criticisms of TCE and contrast Williamson's view of the LMF with my own approach. I discuss empirical evidence that can distinguish between these two approaches and take up Williamson's challenge to identify policy interventions that could yield net social gains.

Keywords

Organizational behaviorproperty rightstransaction costsD23
Type
Research Article
Information
Journal of Institutional Economics , Volume 18 , Issue 2 , April 2022 , pp. 219 - 236
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of Millennium Economics Ltd.

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adelstein, R. (2010), ‘Firms as Social Actors’, Journal of Institutional Economics, 6(3): 329–349.10.1017/S1744137410000044CrossRefGoogle Scholar
Arando, S., Gago, M., Podivinsky, J. M. and Stewart, G. (2012), ‘Do Labour-Managed Firms Benefit from Agglomeration?’, Journal of Economic Behavior and Organization, 84(1): 193–200.10.1016/j.jebo.2012.07.014CrossRefGoogle Scholar
Bartling, B., Fehr, E. and Herz, H. (2014), ‘The Intrinsic Value of Decision Rights’, Econometrica, 82(6): 2005–2039.10.3982/ECTA11573CrossRefGoogle Scholar
Baudry, B. and Chassagnon, V. (2010), ‘The Close Relation Between Organization Theory and Oliver Williamson's Transaction Cost Economics: A Theory of the Firm Perspective’, Journal of Institutional Economics, 6(4): 477–503.10.1017/S1744137410000147CrossRefGoogle Scholar
Burdín, G. (2014), ‘Are Worker-Managed Firms More Likely to Fail Than Conventional Enterprises? Evidence from Uruguay’, Industrial and Labor Relations Review, 67(1): 202–238.10.1177/001979391406700108CrossRefGoogle Scholar
Chassagnon, V. and Hollandts, X. (2014), ‘Who are the Owners of the Firm: Shareholders, Employees or No One?’, Journal of Institutional Economics, 10(1): 47–69.10.1017/S1744137413000301CrossRefGoogle Scholar
Coase, R. H. (1937), ‘The Nature of the Firm’, Economica, 4(16): 386–405.10.1111/j.1468-0335.1937.tb00002.xCrossRefGoogle Scholar
Coase, R. H. (1960), ‘The Problem of Social Cost’, Journal of Law and Economics, 3(October): 1–44.10.1086/466560CrossRefGoogle Scholar
Dow, G. K. (1987), ‘The Function of Authority in Transaction Cost Economics’, Journal of Economic Behavior and Organization, 8(1): 13–38.10.1016/0167-2681(87)90019-9CrossRefGoogle Scholar
Dow, G. K. (1993), ‘Why Capital Hires Labor: A Bargaining Perspective’, American Economic Review, 83(1): 118–134.Google Scholar
Dow, G. K. (2002), ‘The Ultimate Control Group’, Journal of Economic Behavior and Organization, 49(1): 39–49.10.1016/S0167-2681(02)00057-4CrossRefGoogle Scholar
Dow, G. K. (2003), Governing the Firm: Workers’ Control in Theory and Practice, New York: Cambridge University Press.10.1017/CBO9780511615849CrossRefGoogle Scholar
Dow, G. K. (2018), The Labor-Managed Firm: Theoretical Foundations, New York: Cambridge University Press.10.1017/9781316459423CrossRefGoogle Scholar
Dow, G. K. and Skillman, G. L. (2007), ‘Collective Choice and Control Rights in Firms’, Journal of Public Economic Theory, 9(1): 107–125.10.1111/j.1467-9779.2007.00300.xCrossRefGoogle Scholar
Fakhfakh, F., Pérotin, V. and Gago, M. (2012), ‘Productivity, Capital, and Labor in Labor-Managed and Conventional Firms: An Investigation on French Data’, Industrial and Labor Relations Review, 65(4): 847–879.10.1177/001979391206500404CrossRefGoogle Scholar
Fehr, E., Herz, H. and Wilkening, T. (2013), ‘The Lure of Authority: Motivation and Incentive Effects of Power’, American Economic Review, 103(4): 1325–1359.10.1257/aer.103.4.1325CrossRefGoogle Scholar
Hallberg, N. L. (2015), ‘Uncertainty, Judgment, and the Theory of the Firm’, Journal of Institutional Economics, 11(3): 623–650.10.1017/S1744137414000381CrossRefGoogle Scholar
Hansmann, H. (1996), The Ownership of Enterprise, Cambridge, MA: The Belknap Press of Harvard University Press.Google Scholar
Marglin, S. A. (1974), ‘What do Bosses do?: The Origins and Functions of Hierarchy in Capitalist Production’, Review of Radical Political Economics, 6(2): 60–112.10.1177/048661347400600206CrossRefGoogle Scholar
Pikulina, E. S. and Tergiman, C. (2020), ‘Preferences for Power’, Journal of Public Economics, 185(May): 1–19.10.1016/j.jpubeco.2020.104173CrossRefGoogle Scholar
Podivinsky, J. M. and Stewart, G. (2007), ‘Why is Labour-Managed Firm Entry so Rare? An Analysis of UK Manufacturing Data’, Journal of Economic Behavior and Organization, 63(1): 177–192.10.1016/j.jebo.2006.02.001CrossRefGoogle Scholar
Podivinsky, J. M. and Stewart, G. (2009), ‘Modeling Proportions: Random Effects Models of UK Firm Entry’, Singapore Economic Review, 54(3): 367–377.10.1142/S0217590809003380CrossRefGoogle Scholar
Smith, A. ([1776] (1994)), The Wealth of Nations, New York: Random House.Google Scholar
Smith, S. C. (1991), ‘On the Economic Rationale for Codetermination Law’, Journal of Economic Behavior and Organization, 16(3): 261–281.10.1016/0167-2681(91)90014-OCrossRefGoogle Scholar
Williamson, O. E. (1975), Markets and Hierarchies, New York: Free Press.Google Scholar
Williamson, O. E. (1979), ‘Transaction-cost Economics: The Governance of Contractual Relations’, Journal of Law and Economics, 22(2): 233–261.10.1086/466942CrossRefGoogle Scholar
Williamson, O. E. (1980), ‘The Organization of Work’, Journal of Economic Behavior and Organization, 1(1): 5–38.10.1016/0167-2681(80)90050-5CrossRefGoogle Scholar
Williamson, O. E. (1981), ‘The Modern Corporation: Origins, Evolution, Attributes’, Journal of Economic Literature, 19(4): 1537–1568.Google Scholar
Williamson, O. E. (1985), The Economic Institutions of Capitalism, New York: Free Press.Google Scholar
Williamson, O. E. (1987), ‘Transaction Cost Economics: The Comparative Contracting Perspective’, Journal of Economic Behavior and Organization, 8(4): 617–625.10.1016/0167-2681(87)90038-2CrossRefGoogle Scholar
Williamson, O. E. and Ouchi, W. G. (1981), ‘The Markets and Hierarchies Program of Research: Origins, Implications, Prospects’, in Van de Ven, A. H. and Joyce, W. F. (eds), Perspectives on Organization Design and Behavior, New York: Wiley Interscience, pp. 347–370.Google Scholar