Can't help feeling that Ray's is a very broad condemnation of the whole of
an academic discipline; if this is acceptable, what could legitimately be
said about "statisticians" as a whole?
A central theme of LABOUR economics is understanding the consequences of
dealing with people rather than machines. Any labour economist with half a
brain is well aware of the reasons why unemployment in one part of the
labour market can co-exist with wages above subsistence level in another.
As a non-economist who has done a fair amount of work on labour markets in
long-run historical perspective, I find labour economics often provides
useful insights -- for example, into the different experiences and
behaviours of workers whose skills are only useful to a particular employer
or locality, versus those with more transferrable skills.
Cannot help feeling that Ray's "economists" are really mainly politicians
who cite the crudest kind of economic theorising. We are not going to get
anywhere with the concept of productivity without understanding how
economists conceptualise it, e.g. the distinction between labour
productivity and total factor productivity.
Humphrey Southall
At 10:37 01/04/2005 +0100, you wrote:
>I hope that John Whittington hangs on to his 'lack of education' in
>economics. Economists have never really got to grip with the functioning of
>the labour market. And that perhaps explains why the discussion on this
>list about productivity has been so confused and confusing.
>
>Traditionally economics has been defined as the study of the allocation
>of scarce resources, so economists have always had a bit of difficulty in
>dealing with the existence of unemployment. If a resource is not scarce it
>does not really fall within the subject matter of economics. It took what is
>usually called the Keynesian revolution to persuade economists that letting
>markets rip did not solve unemployment problems.
>
>The economist faith in market forces effectiveness in the labour market is
>still strong. In recent decades economists have identified long-term
>unemployment as the main problem. They believed that the scale of long-term
>unemployment should have reduced the level of wages and have blamed the
>benefits system for encouraging people to remain unemployed. These beliefs
>are not consistent with the statistical evidence.
>
>Please do not read into this an attack on the 'new deal' and the welfare
>to work programme. These kinds of measures are best seen as part of what
>John Longsdon gallantly calls 'management and investment'. But, to go
>back to the starting point of the discussion, economists' difficulty in
>dealing with the labour market does help explain why they don't see any
>clear connections between increasing productivity and unemployment.
>
>Ray Thomas
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Humphrey Southall
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