Shanxi Top Body Shares System With A System Of Economic Theory

During the Ming and Qing dynasties in order to coordinate the labor-capital relations and arouse the enthusiasm of employee and employer, the Shanxi merchants had adopted labor-sharing system in a widespread range. This system prescribed that the hired hands in Shanxi firms could share out bonus with shareholders. Though they did not have capital, they could supply their labor instead of shares.Professors in this academic circle did many researches and put forward some profound insights about the labor-sharing system created by ShanXi merchants. There were two points arouse special attention. Firstly employer who met the labor-sharing system requirements could share out the bonus, as a result, the amount of labor-sharing of the firm would increase, because of the increase of the labor that join the labor-sharing system or the increase of the shares those who had join the system before. As the increasing of the amount of labor-sharing, it would exceed the capital amount, which will affect rights and interests of the investors. Secondly, the changing trend of labor sharing and capital-sharing altered initial distribution of business title between capital and labor, which unbalanced rights an duties, therefore, the controlling right of people overtook the risk they should bear, the capital was on the contrary. There from, the system efficiency of stock-holding system was dropped. On the basic of others research result, by the way of collecting and analyzing related historical materials, studying the special encouragement and constraint mechanism of labor-sharing system, the writer study how did this system avoid the trend of opportunism and how did it lead to opportunism at later stage.This paper analyze from institutional economics view, the writer put forward some personal thinking and supplements, utilizing property theory of institutional economics. The writer consider the succeed reasons of Shanxi merchant in Ming and Qing dynasties related with labor-sharing system, expect for the abundant capital. The labor-sharing system during this pored belongs to profit sharing encouragement mechanism, which adopt form of property right encouragement, administrative structure encouragement and rights and position encouragement form a reasonable firm property structure. This system applies a good example for the entrust-attorney ship problem in economy. In the later stage, when the environment changed, this system was not adaptable. However, we can not deny the great contribution of the labor-sharing system to the thriving and prosperous of Shanxi exchange shops as well as the merits of labor-sharing system itself. This paper is aimed to afford some experiences and lesson for the development and reform of modern enterprises.