Research On The Co-operation Between The Labor And The Capital Of The Firm Based On The Property Rights Institution Evolution

Labor-Capital relationship refers to the social and economic relations formed bythe capital owners and workers in the labor process for the purpose of achieving theireconomic interests. Labor-capital relationship manifests the form of conflict orcooperation or other combinations between the two extreme forms. At present, theconflict and confrontation of labor and capital in our country enterprise is graduallyincreasing, the acrimonious labor-capital relationship directly affects the normalproduction and operation activities of enterprise. This paper selects the research forthe institution of cooperation between labor and capital from the perspective ofenterprise property rights institution change.This paper argues that the nature of enterprise has become an organiccombination with human transited from the gather of material capital, laborer playsmore important role in the development of the enterprise. In the current enterpriseproperty right institution, capital owners enjoy residual claims of the enterprise, andlaborers only get wages. This institution severely reduces the enthusiasm of laborer,and causes inequality of status between the labor and capital. The unequal status andcapital owners’ monopoly of the surplus value cause conflicts and confrontation oflabor-capital relationship in the internal enterprise. Therefore, in order to change theconflict status of labor-capital relationship, it has to change the property rightinstitution of enterprise.The property rights institution are divided into two dimensions，one of which is aright arrangement in the process of cooperation between the enterprise production andcreation, and it reflects the institutional arrangement in the operation and managementof enterprise. The second one is the institutional arrangements of the allocation of thenet cooperation surplus of company. Through structuring labor-capital game model,the paper has concluded that achieving cooperation between labor and capital in theinner of enterprises must meet the flowing two principles: the first one is equalityprinciple, and the second one is the principle of maximizing long-term return. Thetwo principles correspond to the two dimensions of the enterprise’s property rightsinstitution. The equality principle requires that employees should have a right to sharethe enterprise’s profits, and the maximizing long-term return principle requires thatenterprises construct the right institutional arrangement regarding co-governance by labor and capital.Finally, according to the result of the analysis of the labor-capital game modeland comparative analysis of the existing property rights institution, this paperproposed dynamic human capital share institution based on co-governance. Theinstitution is divided into two levels, co-governance institution and dynamic humancapital share institution. By practicing those institutions, the enterprise can ultimatelyachieve long-term sustainable development.