The case for employee-owned companies

Our current employment system of renting, hiring or employing people conflicts with the justice principle. In a factory operating under the employment relation, the people working in the factory jointly produce whatever is the product. Consider a company that produces widgets, for example. Those widgets are the positive results of their responsible actions. But to produce the widgets, they must jointly use up raw materials, intermediate goods, machinery and other resources. Those used-up resources are the negative results of their responsible actions.

But the people working in the enterprise do not jointly have legal ownership of the widgets they produce, and they do not jointly bear the expenses for the resources (raw materials, intermediate goods, etc.) they use to produce the widgets. Instead, it is the employer who owns the widgets and pays off the non-labor costs for the used resources. The rented people, the employees, are seen simply as the providers of just another resource — known in this case, as labor services. The employer pays off the liability for using that resource by paying the labor costs — the wages and salaries.

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