The traditional justification for academic tenure is that otherwise professors would be unwilling to express unpopular views for fear of being fired. This argument for academic tenure is extremely weak in the United States where several thousand colleges and universities compete for professors. In fact, tenure only became common at American universities in the 1920's. It is possible for academics with extremely unpopular views to gain an appointment with tenure at different institutions, as seen from the tenure of faculty who deny the holocaust, or a Ward Churchill at The University of Colorado with outrageous views on terrorism and other issues. The case for tenure is stronger in countries where governments control all universities, and can block academics with unpopular opinions from gaining and keeping appointments. Yet even that argument has become weaker with the rapidly growing international market for good academics.
Are there other persuasive arguments for academic tenure? Some have been made in the economics literature, including the alleged difficulty in judging the quality of teaching and research, the non-profit nature of universities, and still others. I have not found any of them persuasive- for example, there is rather widespread agreement in most departments about which are the good teachers, and also to a large extent about who has produced the more influential research.
The American Constitution gives Federal judges lifetime tenure so that they would be free to decide cases without fear of political reprisals for unpopular decisions. In posts on March 12th and 19th of 2005 I argued against the lifetime tenure of judges as encouraging judges to remain too long, especially now when they are likely to live into their eighties and into their nineties within a couple of decades. A single long term of between 14-20 years would entirely eliminate any political influence over their decisions due to any fear of losing their positions. It would also weaken the opposition to the appointment of judges with strong views since they would not be deciding cases for thirty years or more.
Civil servants have tenure because of similar political considerations, but top-level government officials do not have tenure presently, and are selected by the administration in power. It is hard to see why low-level government employees should have tenure either since they do not make any politically sensitive decisions. Perhaps tenure would be justified at certain intermediate levels, but that would at best cover only a small fraction of all government officials.
Companies often give de facto tenure to employees who have worked for them for a long time, except when the companies get into financial difficulties. This is readily explained since long-term employees usually have made significant investments in what is called firm-specific human capital. This term means knowledge and skills of employees that are more valuable at the company where they have worked for many years than at other companies. In order to encourage such investment, and to discourage inefficient quits, companies give a combination of implicit tenure and higher wages to their long-term employees.
Note that tenure alone would not be sufficient to encourage these investments and discourage quits. It has to be combined with higher earnings to long-term employees. Indeed, high enough earnings to employees with much firm-specific investment would be sufficient to discourage quits without tenure. But bargaining between workers and employees should lead to at least de facto tenure because that is more efficient if employees are more productive at this firm than at other firms. It is efficient because both workers and companies would be better off if workers with much relevant firm-specific investment stayed at the companies where they have worked for many years.
Firm-specific investment provides some of the "commitment" that Posner discusses since employees are obviously more committed to companies where they are more productive. Similarly, the company would be more committed to these employees than to other employees. Commitment is also related to loyalty to an organization and to employees. Loyalty in any organization is extremely important, both loyalty from employees to the organization, and from the organization to its employees. That can be encouraged by higher earning as performance improves, and by good and considerate treatment of employees. It would be in the self-interest of organizations to keep their loyal employees, so no explicit tenure rule seems desirable to encourage the retention of loyal members of an organization, no matter what work or profession they engage in.
Since de facto tenure is in the self-interest of companies as well as workers, the value of tenure does not provide justification for laws against firing older workers, or laws that require costly severance pay to long-term employees. Union contracts that make long-term employees less subject to layoffs may in some circumstances provide useful codifications of implicit tenure. However, this could be inefficient when more senior union members have a disproportionate influence over union bargaining. In any case, one would expect companies without unions to have an incentive when that is efficient to codify hiring and firing rules. In fact, most large non-union companies already have these rules.