We have analyzed the classical proprietorship
and the profit-sharing firms in the
context of free association and choice of
economic organization. Such organizations
need not be the most viable when political
constraints limit the forms of organization
that can be chosen. It is one thing to have
profit sharing when professional or artistic
talents are used by small teams. But if
political or tax or subsidy considerations
induce profit-sharing techniques when
these are not otherwise economically
justified, then additional management
techniques will be developed to help reduce
the degree of shirking.