Market socialism, labour market domination, and the state as employer of last resort

ABSTRACT This paper assesses the claim that to avoid labour market domination we must be market socialists committed to an extensive sector of worker-owned firms. The labour republican tradition offers three perspectives on this argument: Ellerman argues that non-domination demands that all workplaces be worker owned. Hockett has argued that it demands a policy that the state function as the employer of last resort. Taylor argues that all that republicanism requires is a strengthened exit right for workers. This paper develops the claim that mandatory market socialism would be illiberal by thinning the market for labour and removing the fair value of exit rights. The most reasonable view, overall, accepts that the state must be the employer of last resort so as to eliminate labour market domination, but this is a macro-level commitment that does not place any meso-level restrictions on the nature of the firm.