COMMEEDALISM by Mwaura Samuel

Author:Mwaura, Samuel
Language: eng
Format: epub
Published: 2022-12-16T00:00:00+00:00

03. Meet the underwriter, the missing link

Thus far, in an effort to deal with the tragedy of the common profruit, we have subset social production from a mammoth activity organised at the societal or indeed global level, which is essentially a non-starter hence the tragedy, to one carried out within companies. Within each company, however, we still have a common profruit. This means that the tragedy of the common profruit yet remains across the entire system and social production consequently remains in jeopardy. How is this tragedy to be dealt with?

Consider, first, the original Hardinian private property solution. We will use this to develop our exposition to explain how the protoentrepreneur role comes about. We will later argue against privatisation given further institutional developments have meant that ultimate responsibility is now not solely held by the protoentrepreneur and responsibility is not necessarily predicated upon private ownership.

Indeed, rather controversially, Hardin suggested that while it can itself lead to more damage through negative externalities, privatisation of commons would be effective as it was associated with “intrinsic responsibility” to see to it that the resource is suitably optimised but not destroyed. If we follow this logic, the common here that is to be privatised is the common profruit, at the company level which in turn translates to the system level.

The person that becomes the private owner of the company’s profruit, we hereby posit, is the protoentrepreneur. This is done through precontracted payment guarantees where the protoentrepreneur undertakes to pay a negotiated remuneration to the specified factors of production operating within the firm. This happens before the actual profruit has been established - when the product is finally transferred to a paying customer finally bringing production to fruition.

In effect, the protoentrepreneur contracts to buy the marginal profruit of factor inputs at the prices agreed with the owners of these inputs. The protoentrepreneur thus assumes ownership of the profruit of the company before it has materialised. Whether it goes on to sell to ultimate consumers for a higher or lower price is a subsequent matter.

What this arrangement does is that it effectively transforms production from a purely conjunctional activity, that could easily fall through due to uncertainty and discontent, to one that has an additional transactional element. The later has built-in pay guarantees to factor inputs, agreed through bargain with the factor owners. Factor inputs here have a contractual obligation to deliver on their part of the bargain for the agreed price and it is this dynamic that makes social production more stable and reliable. The transactional element in wider production comes about as you have factor inputs on one side carrying out production in conjunction with each other, and the protoentrepreneur on the other side of the transaction as the buyer of the common profruit thereof.

Ultimately, however, all the protoentrepreneur does as the owner of the uncertain profruit of the firm is simply underwrite production. In doing so, protoentrepreneurs ensure that social production that would otherwise have been “touch and go” is carried out with more stability.

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