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

86 Illyrian Theories of Cooperative Rent-Sharing
interest so that the new funds contribute to an increase of profit to be
shared by the stockholders. 18 Various kinds of ‘preferred stocks’ represent
different levels of seniority in the capitalist co-op; similar instruments
are rarely applied in producer co-ops.
Easy marketing of shares and the smooth passage from non-membership
to full membership makes the capitalist co-op very different from
the producer co-op. Although there are some advantages (uncomplicated
sharing arrangements, possibility of risk dispersion or attractiveness
to creditors), Illyrian theories do not seem easily applicable.
Nevertheless, there are some points where an Illyrian approach could
help us to explain phenomena in the real-life stock companies. One
could, for example, argue that the high rate of increase of share prices
in the last few decades is the result of Illyrian behaviour of the capitalist
co-ops: by restricting the emission of new stock capital, the joint-stock
companies act in favour of the ‘old members’ increasing the value of
the existing shares. This obviously corresponds to the restriction of new
membership in successful producer co-ops aiming at securing the rent
to old members.
5.5 The d-maximand and immigration
policies of modern states
The description in Illyrian terms of a model modern state (MS) when
considering its immigration policies may seem bizarre. It does, however,
require little effort to identify similarities between the LMF and
the MS in some aspects of their ‘employment policies’.
If the MS is a democratic country, its citizens will have substantial
control over the government’s management of the economy. The gross
income per head ratio (D) will be their legitimate criterion for the government’s
success in long-term economic policies. D will reflect the
amount of total – individual and other – consumption 19 accessible to
any of them. Citizens of developed MSs, and their democratically controlled
governments, have an interest to defend the above average D
against non-members, that is, immigrants from less developed MSs
who are prepared to supply labour for a lower, market clearing, gross
income per head or ‘wage’ 20 W.
The governments of developed MSs will then follow restrictive immigration
policies with similar consequences as the restrictive hiring policies
of LMFs. In economic activities, MSs will try to substitute the
labour supplying immigrants with other productive inputs. Their
expansion paths will, therefore, be capital intensive and they will use
comparatively more of other inputs – for example, energy.