It is common to see the firm characterized
by the power to settle issues by
fiat, by authority, or by disciplinary action
superior to that available in the conventional
market. This is delusion. The firm
does not own all its inputs. It has no
power of fiat, no authority, no disciplinary
action any different in the slightest degree
from ordinary market contracting between
any two people. I can "punish" you
only by withholding future business or by
seeking redress in the courts for any failure
to honor our exchange agreement. That is
exactly all that any employer can do.