Labour Rights, Full Employment, Mental Model Choice and a Dynamic Market Economy

Morris Altman ()

Chapter Chapter 7 in Post-Crash Economics and the Covid Emergency in the Global Economy, 2023, pp 103-122 from Springer

Abstract: Abstract I model how labour rights, providing workers and management with effective voice, combined with full employment contributes to a dynamic, more productive and efficient market economy. Contrary to the ‘mainstream’ view adhered to by both conventional and many ‘heterodox’ economists, that an empowered labour force negatively impacts the economy, I argue that this can have the opposite effect. I model a reasonable scenario whereby higher wages incentivizes firm members to work more efficiently and to engage in higher levels of technological change. This modelling suggests, consistent with Adam Smith’s insights, that tight labour markets are vital to a dynamic capitalism. It is also consistent with a market economy that is fairer and more equitable. Even so, this need not affect policy change if decision-makers believe (based on false mental models) that higher wages and fairness will result in economic collapse. Therefore, changing mental models is critically important to developing a fairer and more vibrant market economy.

Keywords: Empowerment; Voice; Tight labour markets; High wages; X-efficiency; Fairness; Mental models (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-31605-0_7

Ordering information: This item can be ordered from
http://www.springer.com/9783031316050

DOI: 10.1007/978-3-031-31605-0_7

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().