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

to decide higher wages, or to sustain higher employment, than
would be warranted by profit maximisation in the same market conditions.
Such case lies outside the Ben-Ner and Jones framework (see
Nuti, 1997). (The same opportunity to exploit other shareholders
arises also for stakeholders other than employees, when shareholders
who have an individual share smaller than their proportional
stake have a controlling interest.)
6.4 An alternative framework
Mario Domenico Nuti 97
The minor and major objections raised in the previous section, plus
some additional considerations developed below, are summarized in
Figure 6.1. This figure also visualizes a pattern of enterprise types that
emerges from the proposed conceptualization of participation schemes.
Enterprises are bunched into distinct groups which are strictly separated
from each other. In Figure 6.1, employee participation in control
along the horizontal axis goes from zero to industrial democracy to
entrepreneurial control (non-dominant control becoming dominant
beyond a point which is enterprise-specific). The top left hand cell contains
the traditional capitalist enterprise (OA1 in Table 6.1); on its
right, up to the threshold between non-dominant and dominant control,
we find Mitbestimmung and equivalent arrangements (OA2 and
OA3). The top right cell is labeled ‘desert’ to stress the non-sustainability
of dominant entrepreneurial control and lack of participation in
returns (see above).
Along the vertical axis, participation in returns goes from zero to
participation only in net profit, to participation in both profit and capital
gains. A value of one signifies full participation in both; another
‘desert’ labels the unlikely combination of significant participation in
returns without some participation in control. Participation in profits
only takes the form of profit-sharing (without control or, at any rate,
with non-dominant control, with OA6, OA7, OA10). Dominant control
plus participation in profits only is to be found in traditional cooperatives
(OA4, OA8, OA11, OA12, OA16), as well as in ‘Illyrian’ enterprises
(that is Yugoslav type ‘associationist’ firms which Ben-Ner and Jones
1995 unduly exclude from their taxonomy); strictly speaking, all cases
of non-transferable capital rights of employees find their place in this
cell. There remains the bottom right cell for various degrees of entrepreneurial
control, and up to 100 per cent participation in profit and
capital gains. This is the standard case of shareholding employees, as
long as a controlling interest is exercised by individuals holding a
smaller share of equity than labour (including OA5, OA9, OA13, OA14,