This book challenges some of the fundamental tenets of "free market" economics that have had a profound impact on public policy and the plight of the American worker. These include the beliefs that high wages inevitably mean low profits; that a "free" market will automatically reduce discrimination and pay inequality; that anti-trust legislation hinders competitive market forces; and that minimum wage laws and trade unions negatively impact the economy.Using both theoretical analysis and real-life examples, the author shows that these myths are a product of unrealistic behavioral assumptions on the part of "free market" economists about the typical worker. In fact, as the author makes clear, the level of workers' satisfaction with their jobs, as a reflection of how well they are paid and treated by their employers, has a direct impact on the quality level of the products they produce and, inevitably, the economic performance of the firms.

This book challenges some of the fundamental tenets of "free market" economics that have had a profound impact on public policy and the plight of the American worker. These include the beliefs that high wages inevitably mean low profits; that a "free" market will automatically reduce discrimination and pay inequality; that anti-trust legislation hinders competitive market forces; and that minimum wage laws and trade unions negatively impact the economy. Using both theoretical analysis and real-life examples, the author shows that these myths are a product of unrealistic behavioral assumptions on the part of "free market" economists about the typical worker. In fact, as the author makes clear, the level of workers' satisfaction with their jobs, as a reflection of how well they are paid and treated by their employers, has a direct impact on the quality level of the products they produce and, inevitably, the economic performance of the firms.

This work challenges some of the fundamental tenets of the "free market" economics that have had a profound impact on public policy and the American worker. The author shows that these myths are a product of unrealistic behavioural assumptions from "free market" economists about the worker.

Nobel Laureate Edmund Phelps and an international group of economists argue that economic health depends on the widespread presence of certain values, in particular individualism and self-expression. Nobel Laureate Edmund Phelps has long argued that the high level of innovation in the lead nations of the West was never a result of scientific discoveries plus entrepreneurship, as Schumpeter thought. Rather, modern values—particularly the individualism, vitalism, and self-expression prevailing among the people—fueled the dynamism needed for widespread, indigenous innovation. Yet finding links between nations’ values and their dynamism was a daunting task. Now, in Dynamism, Phelps and a trio of coauthors take it on. Phelps, Raicho Bojilov, Hian Teck Hoon, and Gylfi Zoega find evidence that differences in nations’ values matter—and quite a lot. It is no accident that the most innovative countries in the West were rich in values fueling dynamism. Nor is it an accident that economic dynamism in the United States, Britain, and France has suffered as state-centered and communitarian values have moved to the fore. The authors lay out their argument in three parts. In the first two, they extract from productivity data time series on indigenous innovation, then test the thesis on the link between values and innovation to find which values are positively and which are negatively linked. In the third part, they consider the effects of robots on innovation and wages, arguing that, even though many workers may be replaced rather than helped by robots, the long-term effects may be better than we have feared. Itself a significant display of creativity and innovation, Dynamism will stand as a key statement of the cultural preconditions for a healthy society and rewarding work.

The historical relationship between capital and labor has evolved in the past few decades. One particularly noteworthy development is the rise of shared capitalism, a system in which workers have become partial owners of their firms and thus, in effect, both employees and stockholders. Profit sharing arrangements and gain-sharing bonuses, which tie compensation directly to a firm’s performance, also reflect this new attitude toward labor. Shared Capitalism at Work analyzes the effects of this trend on workers and firms. The contributors focus on four main areas: the fraction of firms that participate in shared capitalism programs in the United States and abroad, the factors that enable these firms to overcome classic free rider and risk problems, the effect of shared capitalism on firm performance, and the impact of shared capitalism on worker well-being. This volume provides essential studies for understanding the increasingly important role of shared capitalism in the modern workplace.

“Timely and important . . . It should be our North Star for the recovery and beyond.” —Hillary Clinton “Sperling makes a forceful case that only by speaking to matters of the spirit can liberals root their belief in economic justice in people’s deepest aspirations—in their sense of purpose and self-worth.” —The New York Times When Gene Sperling was in charge of coordinating economic policy in the Obama White House, he found himself surprised when serious people in Washington told him that the Obama focus on health care was a distraction because it was “not focused on the economy.” How, he asked, was the fear felt by millions of Americans of being one serious illness away from financial ruin not considered an economic issue? Too often, Sperling found that we measured economic success by metrics like GDP instead of whether the economy was succeeding in lifting up the sense of meaning, purpose, fulfillment, and security of people. In Economic Dignity, Sperling frames the way forward in a time of wrenching change and offers a vision of an economy whose guiding light is the promotion of dignity for all Americans.

This book provides a theoretical framework to better understand how firms, economies and labor markets have evolved. This is done in a reader-friendly fashion, without complex mathematical arguments and proofs. Economic Growth and the High Wage Economy shows how high wage economies help make firms and economies more productive and why high wage economies can be competitive even in an increasingly globalized environment. It also demonstrates why concerns that labor supply will dry up as wages increase and social benefits rise are largely based on impoverished economic reasoning. The first chapters provide a theoretical basis for the rest of the book, showing for instance how higher wages are prone to increasing the level of economic efficiency by getting people to work harder and smarter (mainly smarter). Altman also explains that our understanding of technological change can be markedly improved by modelling technological change as a product of higher wages and improved working conditions and other shocks to the economic system. As the book develops, it is shown that increasing and high levels of income inequality are not necessary for growth and development, because the economic ‘pie’ grows when the economic wellbeing of the lower half and even the middle improves. The evolution of the state can also be better understood by applying this analytical framework. So too can the persistence of inefficient systems of production and cultural traits that appear to be inconsistent with economic prosperity. On top of this, the book examines the implications of Altman’s theoretical framework for macroeconomic analysis and policy. Finally, it is shown that labor supply can be better understood by introducing target income into the analytical mix. The main contribution of this book is providing the theoretical underpinning for why relatively high wages and, moreover, competition with high wages is good for dynamic growth and development. This work establishes why an alternative model of labor supply, based on the notion and reality of target income, does a better job of explaining the evolution of labor supply. The latter also reinforces the view that increasing wage and workers’ benefits should not be expected to damage the economy, even in the realm of labor supply. This book will be of interest to public policy experts, trade unions, human rights experts and scholars of behavioural economics, labour economics and globalization.