'Divergent Equilibrium' in a Labour-Managed Economy

Abstract

This note demonstratres a potential theoretical problem in achieving general equilibrium in an economy composed of competitive firms maximizing income per worker, under conditions of fixed capital; a problem which might suggest that disequilibria in some markets might be a rule rather than exception. The result reinforces the view that a number of behavioral peculiarities in labour-managed firms may have serious repercussions on the behaviour of the labour-managed economy in general equilibrium.

Keywords: workers management, labor management, socialism, general equilibrium

JEL Classification: J5, L2, M54, C6, D5