Fairness and efficiency in a collective enterprise

The distribution of the social product between non-identical members of a collective enterprise requires criteria of fairness that recognize not only the entitlement of each member to the output produce, but also the contribution of each member in working time and effort to the production of the social product. They must also recognize that in a collective enterprise the size of the social product itself is determined by the rules according to which it is distributed between its members. The paper examines guidelines for the selection of these rules in a collective enterprise that organizes the production and governs the distribution of the social product on the basis of predetermined rules specified in its constitution. Decisions on working time and effort are made, however, individually although they are influenced by the distribution rules themselves as well as by the individual choices between income and leisure. The paper explores also alternative organizational arrangements for the distribution of the social product and the work effort.