Labor rights and labor power and welfare maximization in a market economy: Revising the conventional wisdom

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13 Citations (Scopus)

Abstract

Standard neoclassical theory argues that an economy is negatively affected by increased labor rights and power since it is assumed that economic agents are always x-efficient; performing at the height of efficiency. However, a behavioral model of the firm suggests that more rights and power, with its positive impact on labor standards, need not produce the deleterious results predicted by conventional economic wisdom, due to their productivity-efficiency enhancing impact on the firm. This suggests that ice should not assess the impact of enhanced labor power and control in terms of a zero sum game. It is possible to have both equilibrium improvements in working conditions and economic prosperity, with the former contributing to the latter.

Original languageEnglish
Pages (from-to)1252-1269
Number of pages18
JournalInternational Journal of Social Economics
Volume27
Issue number11-12
Publication statusPublished - 2000

Keywords

  • Behavioural sciences
  • Economics
  • Labour
  • Market economy

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