The Firm Exemption and the Hierarchy of Finance in the Gig Economy

13 Pages Posted: 30 Jul 2019

See all articles by Sanjukta Paul

Sanjukta Paul

Wayne State University Law School

Nathan Tankus

Modern Money Network; Clarke Business Law Institute

Date Written: July 24, 2019

Abstract

Worker-owned or controlled firms face a little-studied threat from antitrust law that typifies much broader problems with the current antitrust paradigm, namely that it favors coordination through concentrated ownership and control while disfavoring coordination through democratic participation, for example by workers. Our existing system for provisioning credit reinforces, at multiple levels, antitrust’s criteria for allocating economic coordination rights. The so-called gig economy illustrates these problems especially acutely. Incorporation by workers, producers, or service-providers is not—without structural reforms—a solution to the antitrust paradoxes created by the gig economy. We show that a firm created and controlled by ride-share drivers or other individual service-providers would have difficulty qualifying for antitrust’s firm exemption under existing law. More, this differential legal obstacle is exacerbated by the hierarchy of finance. In contrast to dominant firms, which have relied on venture capital and now the financial markets to invest in molding their regulatory environments, worker-controlled firms will not be able to access finance in analogous ways—for reasons that largely track and reproduce antitrust's firm exemption itself.

Keywords: antitrust, price-fixing, theory of the firm, firm exemption, worker cooperatives, finance, hierarchy of finance, gig economy

Suggested Citation

Paul, Sanjukta and Tankus, Nathan, The Firm Exemption and the Hierarchy of Finance in the Gig Economy (July 24, 2019). Available at SSRN: https://ssrn.com/abstract=3426230 or http://dx.doi.org/10.2139/ssrn.3426230

Sanjukta Paul (Contact Author)

Wayne State University Law School ( email )

471 W. Palmer Street
Detroit, MI 48202
United States
1.313.577.3952 (Phone)

HOME PAGE: http://https://law.wayne.edu/profile/gk8520

Nathan Tankus

Modern Money Network ( email )

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