Employers’ Economics versus Employees’ Economy

How Adam Smith’s Legacy Obscures Public Investment in the Private Sector

verfasst von: John F. M. McDermott

Verlag: Springer International Publishing

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

This book argues that economic activity in the public sphere now underwrites private corporations, and rejects rigid adherence to traditional economic theories that no longer apply. Adam Smith's widely used "merchant's model" assumes that most investment is private, when in fact research demonstrates that public investment in the workforce through education and training far outweighs the private sector, and does not account for the growing presence of consensual pricing, the diversification of modern businesses, or the increasing internal authoritarianism of globalizing companies. With de facto public support for these adaptations undermining the universally presumed economic model, private corporations are able to increase their profits while misrepresenting the investment of their own global labor forces. This book suggests an "economy of laws" solution that balances the needed degree of central investment planning with the continuation of our pluralist economy of largely autonomous firms, principally by extending the full rights of citizens into the workplace itself.

Inhaltsverzeichnis

Frontmatter

Chapter 1. We Invest More than They

Abstract

From 1970 to 2010, public investment in the US economy outweighed the private variety by about 1.8 to 1. A stand-alone, self-generating “private-sector economy” is an ideological construct, not an analytical one. Most of this investment went to create, alter, and maintain a modern labor force. This reflects the world-historic shift in the late nineteenth century in Europe, North America, and Japan as the “spontaneous” generation of their labor forces gave way to producing and shaping them via massive, public investment in, especially, education and training. Bizarrely, modern Economics “science” conceives of the labor force as an “unproduced input” into the economy—a free gift of nature! Supporting data tables are appended at the end of the chapter.

John F. M. McDermott

Chapter 2. The Paradoxes of Market Economics

Abstract

For Adam Smith and his contemporary followers, an economy is comprised almost solely of individual transactions. This idea is called “methodological individualism”. For the theory based on this to be supportable, those transactions must be both price-competitive and be fully completed within instants of time, as if at an auction. But both these “system” requirements are strongly belied by the facts, as is shown.

The chapter develops an analysis of the dominance of price-consensual transactions, many and the most important requiring positive duration of time for their completion.

John F. M. McDermott

Chapter 3. Economics and Mis-Mathematics

Abstract

There are at least two different infinites: countable ones such as the Integers, the Rational Numbers, and the Algebraic Numbers, and non-countable ones, such as for the Real Number continuum. These latter are required for the Calculus, Game and Probability theory, the Theory of Vector Spaces, and so on. But under “methodological individualism”, all competitive transactions must be individually discriminable, hence countable. Thus, it is a mis-mathematics to cast them, as has been the practice, in the continuum and to perform, as economists do, unrestricted Real Number operations upon them. The chapter explores the limits imposed when the Real Numbers must in the general case be restricted to only instrumental use, and not, as now, as embodying substantial truth in Economics.

John F. M. McDermott

Chapter 4. Cornucopia, Inc.

Abstract

It is traditional in Economics to treat the modern diversified corporate firm primarily as a merchandising institution, as in the familiar discussions of trusts, monopolies, oligopoly, Price Administration, Market Power, Professor Coase’s cost-efficiency, and so forth. Yet there has never been in history an organism which has given us the quantity of products produced by these firms, in such infinite variety and with such ever-changing technological sophistication. Accordingly, a different, “producerist” model is developed—as expressed through the modern triadic division of corporate labor between FINANCE, TECHNOLOGY, and SIMPLE WORK. We explore both the unique historical contributions of these firms and their latter-day economic distortions.

John F. M. McDermott

Chapter 5. From “Employees” to “Servants”

Abstract

The past half century has seen a successful employer attack on worker rights and advantages everywhere in the world, threatening to re-establish the pre-modern “servant” in place of the modern “employee” and, out in the world of “globalization”, imposing new forms of labor bondage. This trend has been founded in the now baseless idea of a distinct, self-funding “private enterprise economy”. Thus the proposal, explored here, of extending full citizen rights—of assembly, speech, and so on—into the workplace itself.

John F. M. McDermott

Chapter 6. Economic Science and Social Reform

Abstract

Contemporary Economics theory prescribes “perfect” knowledge and “absolute” freedom from constraint on its economic actors. This triumph of the subjunctive prescription over the indicative description precludes treating Economics as in any way an empirical discipline on the model of the flourishing empirical sciences. Here Economics’ practitioners have fallen into (or retained) pre-modern habits of thought involving, as we have seen, both empirical arbitrariness and mathematical and other theoretical gaffes. Researchers have amassed troves of information and analysis about economic behavior, and this could—should—provide the basis for a socially reforming empirical Economics science stripped off its now omnipresent subjunctive and ideological trappings, as is here explored.

John F. M. McDermott

Backmatter

Titel: Employers’ Economics versus Employees’ Economy
verfasst von: John F. M. McDermott
Verlag: Springer International Publishing
Electronic ISBN: 978-3-319-50149-9
Print ISBN: 978-3-319-50148-2
DOI: https://doi.org/10.1007/978-3-319-50149-9