November 2010

Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30        


MBM Principal Sources

Blog powered by Typepad

« Close Shave or Cut Throat? The Imperative of Creative Destruction | Main | Who's in Charge Here? »

02 November 2007


Bill Conerly

Here, here. It's a great book. Two other good books on property: Richard Pipes, Property and Freedom, and Hernando De Soto's The Mystery of Capital.

Pat Peterson

A few points of consideration. Community-based property can work--though limitations on growth may be needed. I lived in a community (commune) for nearly 20 years, and know it is possible--though it may rely on a religious or other strict community structure.

What do you do with first-level employees who have no decision rights? The RR&Es may be slightly different than a similar co-worker, but there is really nothing they "own" as a part of the Koch/GP workforce.

Alastair Walling

Bethell's book does discuss community property and the appropriate conditions under which it can succeed. Successful communes are rare, but not unheard of. Bethell gave three conditions that appear to overcome the free-rider problem and make a successful commune possible:
1. Small size—the magic number for a successful commune is no more than about 150. This small number allows members to watch each other and know each other personally, which creates the necessary bonds for community.
2. Some sort of religious zeal or enthusiasm is also needed to create the necessary spirit of self-sacrifice.
3. Celibacy: Ok, this seems a little weird, but the creation of individual families can divide the community. Individuals may be willing to engage in self-sacrifice for themselves, but this sense of self-sacrifice for the community should be overcome by the desire to self-sacrifice for the family—children in particular.

These appear to be the conditions for a successful commune. Of course, we all experience communal living during our lives—the family is a commune. However, anything beyond the family will probably require these three elements. Monasteries certainly embody all three, as have some religious cults. Of the three, celibacy is probably the most optional. Bethell gave the example of Hutterite communities, which somehow make communal living work without celibacy, but they do satisfy the first two conditions. Their zeal is strong and a new colony is created every time old ones grow past 150.

So, you are right, under certain strict conditions and on a small scale, communes can function. Historically, the problem has been when planners have attempted to impose communal property on a much larger scale. Only private property can create the incentives necessary for larger populations to grow the recourses needed for comfortable living.

In regards to your second point, most (if not all) Koch/GP/INVISTA employees should have some sort of decision rights. They “own” what they are directly responsible for, and also own a piece of whatever whole process they are involved with. We “own” what we do, and everyone (hopefully) does something. There may be exceptions, but I cannot think of any right now. Secondly, even if an employee has few decision rights, RR&Es are still needed. For starters, the managers can put all their employees’ RR&Es together in order to make sure that everything she is responsible for is covered. At the same time, when the manager and employee sit down together to review performance, the RR&E provides an excellent reference point to remind the manger and employee what “good” looks like. This makes it easier to determine what rewards or additional decision rights the employee maybe due. One last thing, this is merely a rough description of how things are supposed to work using MBM. However, we know that this may not always be the case. Managers may treat employees like they have no decision rights (do as I tell you), and employees may think they have none (I do only what I am told). This is the command and control environment that MBM tries to displace. Sadly, it probably still exists in too many places, but we are working on it.

Hope I got everything, and if not, then please let me know,


Pat Peterson

Alistair, thank you for your response. The additional insights from Bethell's book were escellent--I will look for the book. And wading into Libertarian waters in my post-communal experiences helps me appreciate such important concepts as property rights.

As far as decision rights and RR&Es, it may be something that can be expressed more completely in reviews (tying the two together) in situations where an employee may be in a ground-level position. In considering your response, I can see places where I personally have decision rights that have not been explicitly discussed in regards to my RR&Es, and would help to open that document up even more in my day-to-day work.

The comments to this entry are closed.