Profit Shares as Virtual Equity: Short-Run Isomorphism of Share & Wage Systems
Bibliographic record
Abstract
An important argument in favor of public policy to promote profit-sharing arrangements – and one that distinguishes it from the canonical wage system – is that it creates a macroeconomic externality in the form of short-run excess demand for labor. In this paper we provide insights new in the literature to show that the two systems are isomorphic. We consider the most plausible basis for the distribution of the profits between labor and capital to be one that is conceptually consistent with the functional role of labor as a residual claimant. We postulate a sharing rule that is based on the recognition that in a profit-sharing system a portion of labor’s contribution is a form of equity – virtual equity – analogous to shareholder equity. With this interpretation, if the share parameter of worker pay is endogenously determined then we show that, eschewing any independent productivity effects, a profit-sharing system is not consistent with said macroeconomic externality. This analysis provides a framework to assess recent public policy initiatives and legislative proposals on both sides of the Atlantic, arguing that their advocation can be based on distributive but not efficiency grounds.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.007 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.001 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.001 | 0.004 |
| Scholarly communication | 0.004 | 0.007 |
| Open science | 0.001 | 0.003 |
| Research integrity | 0.001 | 0.002 |
| Insufficient payload (model declined to judge) | 0.012 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".