The Microeconomics of Conflict and Hierarchy in Capitalist Production

This paper develops a formal model of worker-employer relations within capitalist firms. The results illuminate the effects of property rela tions on the organization of work, the monitoring of workers, the extent of wage hierarchies and incentives and inefficiencies in such firms. A comparison model of a workers' cooperative demonstrates that the nature of the political-economic system, not just technology or information and transaction costs, affects produc tion conditions.