Property and Contract in Economics: The Case for Economic Democracy

by David P. Ellerman

This book argues that the recently deceased Capitalism-Socialism debate was wrong-headed from the beginning - like a 'debate' over private or public ownership of slaves. The question was not private or public slavery, but slavery versus self-ownership. Similarly, this book argues that the question is not whether people should be private employees (capitalism) or public employees (socialism) but whether people should be hired or rented as employees at all versus always being jointly self-employed as employee-owned companies. Being a genuine work of political economy, the book re-examines the basic principles of private property and contract to obtain results at odds with the employer-employee relation and in favour of universal self-employment or economic democracy. Joint self-employment in the firm is the economic version of joint self-determination or political democracy in society. Private property should be based on people getting the fruits of their labor, but that only happens under joint self-employment. Market contracts should only apply to what can be transferred, but a person's labor is not really transferable (as we easily recognize for hired criminals). This book traces these ideas - the labor theory of property and the notion of inalienable rights - from ancient Stoics through the Reformation and Enlightenment, and restates the ideas in modern terms with critical applications to economic theory.

Genres: Economics

275 pages, Hardcover

First published January 1, 1992

Reviews

[David Z · Rating 4 out of 5]

Really interesting book; Ellerman talks about how the question of whether industries and firms are publicly or privately owned is incorrect, and that we should instead focus on the employer-employee relationship within those firms as the real problem, advocating for economic democracy and universal self-employment.

He doesn’t actually advocate how a universal system of self-employment would work in principle, or give ideas of the specific firm structures, but instead uses democratic theory, the labor theory of property, and de inalienable rights theory (with lots of intellectual history) to argue that the current institutions we have in the workplace constitute a legal fraud.

He presents really strong arguments (albeit confusing and dense at times) which, interestingly, use classic liberal forms of reasoning to dismantle liberal arguments (like those of John Locke especially).

I got kind of lost when he used mathematical models to talk about capital theory and input-output, but otherwise this was a really insightful economic and philosophical work.