Distributing Disadvantage in the New Industrial State: A Study of the Phillips Relation for the Mature Corporation
Abstract
This essay proceeds along two fronts. It begins by
establishing a "Phillips-like" trade-off which is institutionally rather
than market-determined. The contract curve for general
equilibrium analysis in the labor market presents a situation
uncannily like the Phillips curve. Then a number of developments
in those institutions due to rapid technological advance are discussed,
and a case is postulated in which the institutions no
longer serve their limiting function upon each other. The
phenomenon of wage-leadership is examined to show how results in
this sector might be generalized to the economy as a whole.
The second front involves the problem of governmental
response to institutional change. The history of trade unions
through law and national policy demonstrates that the government
has frequently lagged behind this institutional development, with
detrimental results for society. The notion is advanced that
intervention into the private economy should not be treated as
a problem of ideology, but of theory. In this sense, there are
patterns of intervention which are more compatible with different
types of institutional development. The mis-matching of types
leads to instability or even conflict. Specifically, a high
rate of wage-inflation emerging from one sector of the economy
is a sign that trade unions and employers do not perform the
way they used to, and national policy must be adapted to suit
these ends. If you are not a current K College student, faculty, or staff member, email dspace@kzoo.edu to request access to this SIP.