Ordinary Jurisprudence and the Democratic Firm: A Response to David Ellerman

Abstract

David Ellerman has proposed an argument for the democratic firm based on a principle of ordinary jurisprudence, the principle of responsibility. The responsibility principle says that people are to be held legally responsible for the results of their intentional deliberate actions. Ellerman contends that laborers ought to constitute the firm and appropriate its whole product, because production is the intentional deliberate action of laborers. The employment contract is thus invalid, and every firm ought to be reconstructed as a partnership of all those who work in the enterprise. This article argues that there are two flaws in his argument. The first flaw is Ellerman's focus on a distinction between people and things, rather than on the varying forms of participation in an action, including participating by contributing tools. An analogy with the concept of criminal accomplices shows that those who contribute capital to an enterprise could share responsibility for production along with laborers. The second flaw is that while responsibility is inalienable, when responsibility produces a property right, that property right is alienable. The employment contract could be reconceived as a type of futures contract, selling a claim on the eventual whole product in return for something like a fixed wage.