Content area
Full Text
1. Introduction
Jaroslav Vanek was a pioneer in the study of the labor-managed firm (LMF). Every economist who has done serious research in this field over the last 50 years has been affected by Vanek's ideas in one way or another. To make this point, I will use my own career as a case study. I have been a professional economist for 40 years, and I have devoted much of that time to the theory of the LMF. Here I will describe both my own work and Vanek's influence on it.
Section 2 describes my initial encounter with Vanek's writing. In Sections 3–7, I sketch the theoretical framework I have developed for thinking about the LMF. In Section 8, I return to Vanek's role and offer a few closing remarks.
I use the following terminology throughout the paper. In a LMF, the top managers are chosen by labor suppliers, often through a board of directors elected by the workers. In a capital-managed firm (KMF), the top managers are chosen by capital suppliers, often through a board of directors elected by the investors. My use of the letter K in the latter case reflects the standard economic notation for capital. I ask for the indulgence of readers who prefer other acronyms for the two kinds of firm.
2. The beginnings
In 1975, I was finishing a bachelor's degree in sociology at Amherst College and starting a master's degree in public policy at the University of Michigan. I had recently attended a public lecture by Sam Bowles in which he criticized the hierarchical authority structure of capitalist firms, and I had heard from a sociology professor named Norman Birnbaum that workers could control their own factories.
These seeds sprouted in fertile soil. I had been politicized by the Vietnam War in the late 1960s, and had become deeply skeptical about American capitalism by the early 1970s. At the same time, Soviet communism was anathema for anyone who believed in democracy. On a more practical level, I had spent several summers working to finance my education, including stints in a shoelace factory and two plastics factories. Many of my coworkers had been doing such jobs for decades. I learned from these experiences that workplaces were often unsafe and...