Labour commanded: Micro-credit, the employment relation and the property rights constraint

ABSTRACT. Systems of property rights, employment relations, and other economic institutions may be evaluated both on efficiency and on equity grounds. Here, I explore the accounts which alternative philosophical and economic approaches may provide of one non-standard employment relation which, rather than in the labour market, is established via a debt-credit contract. The purpose is both to derive some useful insights into the nature of this relation, and -at the same time- to understand alternative positions and their respective merits, in the light of their analytical and normative arguments concerning the case at hand. In the second part of the paper, I illustrate how the credit channel may be turned from an instrument of “command” over labour into a powerful lever, instrumental to a general project to overcome the “property rights constraint”, which lies at the root of many employment relations.