Many thanks to Deven and Orly for organizing this online symposium and for letting me join in. Talent Wants to Be Free is a real tour de force: original and engaging, thoughtful and thought-provoking. Orly is likely the only person who could have written this book, as it deftly combines research from a variety of academic literatures to make novel observations while at the same time remaining understandable and even approachable. As other participants have mentioned, I do hope it gets read by policymakers and thought leaders who are contemplating how to bring more innovation to their city, state, or country. Given the burgeoning interest in entrepreneurship (see, e.g., this program on St. Louis), the book should find a place on many bookshelves.
Since I’m starting in the midst of an already heady discussion, I wanted to build on what Shuba and Vic mentioned about the theory of the firm, as well as Orly’s response. I argue in a forthcoming paper that our notion of “employment” is completely connected to our idea of the economic firm: you can’t have employees without an employer, and the employer is a firm. Why do we have these mechanisms for joint production? The short answer, I think, is that we need firms to facilitate joint production. There’s only so much we can do on our own, and once we start working together we need legal and economic structures to manage that collaboration. Shuba and Vic both discuss how the theory of the firm literature might provide an antithesis to Orly’s thesis in terms of the benefits of organized team structures that, to some extent, constrain individual workers. Orly’s response agrees that firms play a useful role, but she argues that much of the existing theory-of-the-firm literature depends on the “orthodox” model of employer protectionism. However, I think both sides are missing an important aspect of the issue: namely, the governance of firms.
In both academic and popular literature, employers/firms/corporations are characterized as large, faceless institutions that act autonomously in their own self-interest. But firms are just collections of individuals with various economic and legal relationships who are acting together in the context of a legal entity. In other words, employers are people too — not individual persons, but groups of people. Do some of the restrictions we are talking about look less onerous if we think of employers as groups of people? Let’s take, for example, the work-for-hire doctrine. Does that doctrine look less punitive if five people create a firm to work together on a collection of projects, and they jointly agree to share their intellectual property rights with one another? If one of the five breaks the deal and takes off with the rights to a key component of the research, the work-for-hire doctrine looks like it’s pro-employee — at least, for the four other employees involved. Although Orly’s Evan Brown example (pp. 141-44) looks like blatant opportunism by a large corporation, in other instances employees as a whole may end up better off if one of their number can’t defect to the detriment of the joint enterprise.