Horizon Problem and its Solution

This is the paper that explained how the system of internal capital accounts solves the Furubotn-Pejovich horizon problem that occurs in labor-managed firms with “social equity” like in a non-profit company. To this day, conventional economists still refer to the “horizon problem” as if it were some inherent unsolved problem fatal to the otherwise good idea of a labor-managed firm. Ignorance is their bliss.

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