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This presentation is based on the arguments developed by ELLERMAN D. in Property and Contract: The Case for Economic Democracy (1992, Cambridge MA: Blackwell), http://www.ellerman.org/Davids-Stuff/Books/P&C-Book.pdf
• In English, the creation or initiation of a property right is called « appropriation ».
• Economics focuses on the transfer of property rights in the marketplace. But to be transferred, a property right must first be created or initiated and it will be eventually terminated.
• To avoid confusion (specially in French), we suggest to use the neologism « neopropriation »
1 - The initiation of a property 1 - The initiation of a property rightright
• “Let the liabilities generated by an activity lie where they have fallen, and then let the party which assumed the liabilities claim any appropriable new assets resulting from the activity.” This party is named the “firm”.
In every-day life, there is an automatic market mechanism
operated by an “Invisible Judge”
1 - The initiation of a property 1 - The initiation of a property rightright
• Because, if property rights to assets are generally alienable rights, i.e. property rights that could be transferred on a market,
• The initial property right to an asset is an inalienable property right, i.e. a property right that cannot be transferred even with full, free and informed consent against a salary!
Why is it illegitimate?
1.3 - The illegitimate machinery of the employment contract
1 - The initiation of a property 1 - The initiation of a property rightright
In the capitalist democracies, there is a schizophrenic mixture of alienable
and inalienable rights!
1. The distinction is carefully recognized and enforced between inalienable and alienable rights.
2. The specific inalienable nature of the voting right is carefully maintained in order to prevent the possibility of power accumulation within of few number of beneficiaries.
1. The distinction is carefully hidden and neglected between inalienable and alienable rights.
2. The specific alienable nature of the initial property right is wrongly imposed in order to allow the possibility of capital accumulation within a few number of beneficiaries.
1. That people are allowed to individually or collectively renounce their democratic rights in the workplace and voluntarily become the subjects of a ruler (i.e., the employer) or ruling association (i.e., the share-holders),
1. While the employer is not the delegate, representative, or trustee for those who factually work in the workplace.
• The employment contract is a contract of alienation, not delegation!
2.2 – The employment contract is a contract of subjection
In a DEMOCRATIC FIRM, the bundle of shareholders’ property rights must be broken down into two distinct categories of rights attached to two distinct basic roles human beings can play within an economic and social system:
An alienable property rightProperty certificate• Transferable on the market• Giving no right to control the Firm
Two inalienable membership rights
of the workers-membersMembership certificate• One voting right per member• Delivered when joining the Firm• Destroyed when leaving the Firm• Not transferable on the market
The alienable property right to the means of production.
3. Net asset property right
The personal inalienable right of property to the whole product (Q, -K, -L).
2. Whole product property right
The personal inalienable right to self-determination and self-government.
It is generally a necessity for a DEMOCRATIC FIRM to own assets to operate smoothly.
How is it organized?
How is the transferable (alienable) property right to the net asset organized amongst the workers-members with due recognition of their individual property right?
What happens when a worker-member decides to terminate his (her) employment with the firm?
2 – Workplace Democracy2 – Workplace Democracy
This is an alienable property right of whoever owns the means of production, i.e., an external
1. Realizes the democratic principle of self-government in its assignment of voting rights to those who are governed, currently and in the future.
2. Realizes the principle of private property appropriation (neopropriation – becoming the first owner of the result of one’s labour) in the assignment of net income rights, currently and in the future.
3. Internal capital accounts recording net asset value, does not force workers to sacrifice fruits of their past labour reinvested in the firm.
4. There is no “shareholder’s equity”. Nobody can purchase the firm to control it. An external investor can only lend capital to the firm without getting the right to control it.
5. The principle of “limited liability” is abolished. There are no longer “rights without responsibilities”(*).
6. There is no restriction as to who is the client of the firm: the client could be “private” or “public”.
(*) Refer to the excellent contribution by Dr Dan Plesch and Dr Stephanie Blankenburg, Corporate Rights and Responsibilities: Restoring Legal Accountability. https://eprints.soas.ac.uk/5707/1/RSA_Corporate_Rights-Plesch_and_Blankenburg.pdf