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Rotation & Lottery

Rotation & Lottery. A Democratic Decision Making Mechanism for Workers’ Co-operatives Conall Boyle Economics Department Swansea University. R & L in 3 rd World. Fisheries eg Kerala, S India— padu Strip farming, Scotland— runrig. Ancient oddities, no relevance?.

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Rotation & Lottery

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  1. Rotation & Lottery A Democratic Decision Making Mechanism for Workers’ Co-operatives Conall Boyle Economics Department Swansea University

  2. R & L in 3rd World • Fisheries eg Kerala, S India—padu • Strip farming, Scotland—runrig Ancient oddities, no relevance?

  3. The cavil in the Durham coalfield On Cavilling day, hewers' names would be drawn out of the foreman's hat, the order of draw determining the place at which each pair of hewers would extract coal for the next three months.

  4. The cavil as an ‘institution’ • Cavil = an evolved institution –origin: –sustained (despite alternatives): –demise: Adds to the credibility of R & L in use Institutional Economics

  5. The Cavil — ‘uneconomic’ • Imposes costs (on workers) > benefits • Payoff: • Fairness, • Justice • (Rawls Veil of Ignorance) • (fewer strikes in Durham <> S. Wales)

  6. Kremer (1997) Why are workers co-operatives so rare? NBER Working paper 6118 -------------------------- Standard economics: “greed is good” Co-op = democracy Median voter choose to compress wages diffs Best workers leave Mistrust & disputatiousness Answer: neutral arbiter. An Economist’s view of workers Co-ops

  7. Experimental economics: Ultimatum game: Inter-personal values of fairness matter, have a value (£) Explains why the Cavil worked Rational self-interest always significant, but Reciprocity, esp within groups recognised Don’t wish to see fellow workers lose out Lottery: all treated equally and impartially Economics recognises life

  8. More experimental results • Narrowing wage diffs • leads to more harmony (esp face to face) • Highly competitive conds • Crowds out co-op values eg S Wales

  9. Lottery — the neutral arbiter? • One-off could be gruesome • Eg school places, medical treatment • But, add repeated chances • Rotation of jobs like the cavil • Different opportunities as they arise • Specialist training • Assignment to favoured locations • Office space, equipment • Hence the true democracy of fair chances • And it’s cheap! No endless discussions about who deserves what.

  10. Random choosing = duds? • Minimal pre-screening • Human judgement very unreliable • So a lottery hardly any worse • And may produce ‘grit in the oyster’

  11. Co-operatives and Democracy • Ancient Greek idea — ‘democracy’ • Rarely based on voting. • Instead used the lottery and rotation, including most public appointments.

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