REVIEW article
Front. Behav. Econ.
Sec. Culture and Ethics
Volume 4 - 2025 | doi: 10.3389/frbhe.2025.1625353
This article is part of the Research TopicCapitalism, Conflict, and Cooperation: In Honor of Herbert GintisView all 3 articles
The Labor-Managed Firm, Herbert Gintis, and Me
Provisionally accepted
- Simon Fraser University, Burnaby, Canada
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Gintis co-authored an influential series of journal articles and book chapters with Samuel Bowles on the nature of the capitalist economy and the prospects for labor-managed firms (LMFs). Their theoretical model highlighted the lack of external contract enforcement in the labor and capital markets. Specifically, it is hard to have legally enforceable contracts about the effort of workers or the risks taken by borrowers. Hence, these relationships often rely upon contingent renewal, where the employer or lender offers an enforcement rent and threatens to end the relationship if unsatisfactory behavior is detected. The model suggested that LMFs would have advantages in the labor market but disadvantages in the capital market. Here I review the Bowles and Gintis model, compare it with research of my own, and conclude that the main empirical predictions about LMFs made by Bowles and Gintis have stood the test of time. I am grateful to Gilbert Skillman for comments on an earlier draft. He bears no responsibility for my errors or opinions.
Keywords: Labor-managed firm, Capital-managed firm, contested exchange, Herbert Gintis, Samuel Bowles
Received: 08 May 2025; Accepted: 11 Aug 2025.
Copyright: © 2025 Dow. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Gregory K. Dow, Simon Fraser University, Burnaby, Canada
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