Property Rights Of Firm And Fair Income Distribution

The main reason for bigger income gap lies on unfairness of income distribution. The problem of income distribution is actually the problem of fairness and efficiency. To trade off the relation of fairness and efficiency, we can research it in term of three time horizons, that is, short run, medial run, long run. The tools in short run to achieve fairness and efficiency mainly contain taxation; the tools in long run contain education, finance policies and social security. While the function of the tools in mediate run is carried out by various institutions of property rights. The tools in short run and long run basically belong to the confine of redistribution, while because of citizen heterogeneity between our society members and faultiness of taxation, the effect of redistribution to achieve fairly distribution will not come to ideality.To achieve the institutional creation of first distribution through reforming the institution of property rights in firm is the most basic method. Institution of property rights in firm classify in the single capital property institution and the joint property rights institution. The single substance-capital property rights institution, the single country-capital property rights institution, and the single labor union property rights institution is sure to respectively result in polarize and equalitarian, so that they can't work as the microcosmic basis of fair distribution.The joint property rights institution, which protects substance property as well as respect human rights, indicating harmonious of labor and capital, is the common institution of modern firms. The phrase of firm growth is synchronous with the fairness of income distribution. Along with the growth of the firm, human capital property rights and work property rights come into being. In a dynamic system of learning by doing, negotiating between every property rights body gives rise to gradual adjustment of proportion in participating in firm's cooperate surplus, which is represent of fairness of the first distribution. The efficiency of the first distribution mainly exhibits higher wages leading to harder working. The conclusion of our theoretical model is that joint property rights institution is a firm institution which makes fairness and efficiency unified in the first distribution, which is also the microcosmic basis of achieving fair distribution.