Comments Elsewhere

Posner: “The economic literature on worker cooperatives identifies decisive objections to that form of organization that are fully applicable to university governance. The workers have a shorter horizon than the institution. Their interest is in getting as much from the institution as they can before they retire ….”

This attempt at a nutshell summary of a brief against worker co-operatives seems to commit a serious economic fallacy.

It’s true that workers (industrial, professional, or otherwise) generally have “a shorter horizon” than the “institution” that they work for. But that’s true of all mortal human beings, not just employees, and the “institution” makes no decisions and takes no actions independently of the decisions and actions of mortal human beings.

So the proper comparison here is not between the horizons and incentives of workers as against the horizons and incentives of the institution, but rather the horizons and incentives of shareholding workers as against the horizons and incentives of shareholders not working for the institution (henceforward: absentee shareholders), and if your concern is for the long-term flourishing of the institution, the questions at hand become (1) whether absentee shareholders have longer “horizons” than shareholding workers, or vice versa; (2) whether absentee shareholders are less likely than shareholding workers to milk the institution for personal gain within the “horizon” of their own relationship to the institution at the expense of the long-term flourishing of the institution, or vice versa; (3) whether absentee shareholders are more willing and/or better able than shareholding workers to discover the best means of serving the interests of the institution within their short-term horizons, or vice versa; and (4) whether absentee shareholders are more willing and/or better able than shareholding workers to discover the best means of serving the interests of the institution beyond the short-term horizons of their personal relationship to the University.

These questions are important, and I think not obviously to be answered in favor of control by absentee shareholders, at least not in every imaginable case. (And since the structure and goals of the University make it an atypical case compared to factories, restaurant chains, shipping companies, and other for-profit enterprises, it seems like special caution is needed here.)

But they remain unasked as long as we pretend that the mystical body of The Institution will somehow be making decisions once mortal workers are no longer playing a substantive role in decision-making.

You’re going to need a much stronger case before you can justify such a radical set of policy proposals as the “accountable to none save the Board” platform for University CEOs that you’ve outlined here.