The benefits obtained by the new management
are greater if the stock can be
purchased and sold, because this enables
capitalization of anticipated future improvements
into present wealth of new
managers who bought stock and created
a larger capital by their management
changes. But in nonprofit corporations,
colleges, churches, country clubs, mutual
savings banks, mutual insurance companies,
and "coops," the future consequences
of improved management are not
capitalized into present wealth of stockholders.
(As if to make more difficult that
competition by new would-be monitors,
mutiple shares of ownership in those enterprises
cannot be bought by one person.)
One should, therefore, find greater shirking
in nonprofit, mutually owned enterprises.
(This suggests that nonprofit enterprises
are especially appropriate in
realms of endeavor where more shirking is
desired and where redirected uses of the
enterprise in response to market-revealed
values is less desired.)