Equality, Participation, Transition: Essays in Honour of Branko Horvat

5
Illyrian Theories of Cooperative
Rent-Sharing and Their Application
in Real Life*
Dinko Dubravcaić
5.1 Introduction
In this paper we review some long-standing Illyrian propositions and
identify cooperative rent-sharing as their essential component. We
compare rent-sharing in producer cooperatives with rent appropriation
by organized labour in real life developments in Western economies.
We also evaluate the possible application of Illyrian theories to new
domains, such as acquisition of capital by joint-stock companies, or
immigration policies of modern states.
5.2 The d-maximand and co-operative
rent-sharing in Illyrian firms
The introduction of self-management into the enterprises of former
Yugoslavia in the early 1950s has offered economic scholars a new field
of research. The theoretical reflection of real-life self-management – the
labour-managed firm (LMF) – was created with the postulate that it
maximizes income per worker (dI/L), instead of absolute profit (),
as done by the textbook entrepreneurial firm (EF). On that basis, the
theory of the firm and some other chapters of economics have been
reworked – the Illyrian 1 theories were the result.
The d-maximand seemed logically acceptable, even inevitable, for a
LMF, since it satisfied the aspiration of each member of the cooperative
to attain the highest personal income. These aspirations appeared just
* An early draft of this paper was presented at the Fifth International Conference on the
Economics of Self-Management held in Vienna in 1988 under the title ‘Illyrian theories in
Quest for Application’. I would like to thank the participants of the conference, especially
Jan Svejnar and Branko Horvat, for their valuable comments.
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