the politics of conflict and consent abstract transaction cost economics claims to model the labor contract in terms of the opportunism practised by workers a recent alternative has seen custom as the main means by which workers impose their control of the contract both fail to explore workers co operative behavior in the workplace pay insufficient attention to managerial behavior and misunderstand the social organization of conflict and consent materials from industrial sociology and labor history are used to illustrate these limitations to show how the labor contract is in fact negotiated and to suggest how an alternative approach might be constructed

job quality and the economics of new labour a critical appraisal using subjective survey data this paper assesses the record on job quality during the early term of office of the new labour government by interpreting from a political economy perspective changes in a variety of subjective measures of job quality taken from several different data sources we find some improvements in job quality over the period 1998 2004 however we argue that these improvements have arisen not because of new labour s policies towards the workplace but because of low and falling rates of unemployment despite recent improvements a large number of workers in britain remain in low quality jobs and without a radical change of policy direction sustained and substantial progress in the quality of work will remain elusive

nash and stackelberg solutions in a differential game model of capitalism abstract this paper examines two noncooperative open loop solution concepts in a simple model of economic growth and distribution formulated as a differential game between workers who may save or consume and capitalists who may consume or invest it is demonstrated that both players prefer the stackelberg game to the nash game furthermore it is shown that under fairly realistic assumptions about the parameters of the model both workers and capitalists would prefer to act as the follower in the stackelberg game this means that capitalism is in a stalemate i e in a position where neither class wants to take the initiative and announce its strategy first the result is interpreted as an explanation of the difficulties met in designing and implementing incomes policies and social contracts

on the dominance of capitalists leadership in a feedback stackelberg solution of a differential game model of capitalism abstract this paper deals with a modified version of the lancaster model of capitalism where it is assumed that there is a cost jointly borne by the two groups of players workers versus capitalists and associated with the bargaining of a larger share of consumption for the workers it is shown that a feedback stackelberg solution with the capitalists acting as leaders and announcing their investment policy at the beginning of each period is a solution dominating the feedback nash solution the paper is also intended to be a tutorial on the feedback stackelberg solution a concept not so often used by economic modelers

the spirit of capitalism and savings behavior abstract this paper presents a capitalist spirit model of savings by including wealth in the intertemporal utility function while this model includes the life cycle model and bequest model as two special cases it sheds light on why wealth holding has tended to increase with age why decumulation of wealth after retirement has not happened and why households with and without children have not shown significant differences in their savings behavior the capitalist spirit approach is especially useful for understanding savings by the rich and savings across countries and over time jel e21 b10

developing an understanding of meaningful work in economics the case for a heterodox economics of work the idea that work has meaning and is meaningful beyond its contribution to consumption has been largely absent from mainstream economics this paper gives reasons for why mainstream economics has neglected the idea of meaningful work it identifies the idea of the disutility of work the assumption of free choice on the part of workers and the use of a formal and individualistic method as key constraints on the ability of mainstream economics to incorporate the idea of meaningful work it also addresses the contribution of happiness economics and shows how it is unable to encompass the idea of meaningful work ideas on work from heterodox economics are then discussed these ideas provide essential insight and inspiration for the incorporation of the idea of meaningful work into the economics of work in all respects the paper seeks to contribute towards the development and promotion of a heterodox economics of work that has the goal of meaningful work at its centre

the function of authority in transaction cost economics abstract this paper questions the transaction cost characterization of observed authority relations as efficient governance structures various inadequacies in the transaction cost account of work organization and the limits of firm size are traced to its neglect of the possibility that authority may be abused opportunistically this exemplifies a more general propensity in the transaction cost literature that of explaining economic organization in functionalist terms with little attention to the causal mechanisms through which efficient governance structures might actually arise three such mechanisms are considered but none is found to provide an adequate rationale for the imputation of efficiency to observed structures

transaction cost economics the comparative contracting perspective abstract gregory dow s assessment of transaction cost economics is both thoughtful and provocative although we agree on many matters these remarks focus on our differences i begin with a brief sketch of the framework out of which transaction cost economics operates i then examine the purported bias of transaction cost economics in favor of capital managed as against labor managed firms and my alleged failure to deal with downward opportunism dow s claim that transaction cost economics is given to functionalist excesses is considered next concluding remarks follow

why countries with the same technology and preferences can have different growth rates abstract a standard ak model of endogenous growth has been extended to allow for an intertemporal conflict between capitalists and workers for the dynamic game thus obtained an equilibrium solution in feedback nash markovian strategies have been computed however many equilibria in trigger strategies can dominate the former there are dominating strategies that depend on the country specific bargaining power of the workers versus capitalists they are both pareto optimal and subgame perfect this provides an explanation why countries which are completely identical in preferences technology and factor endowments can experience different long term growth rates

an empirical investigation of oliver williamson s organization of work oliver williamson argues that the attributes of the employment contract like intermediate transactions in general are essentially driven by the specificity of assets in the case of the organization of work it is the particular attributes of labour that determines the transaction costs of any given governance structure the paper presents a stylized account of the transaction cost model of the efficient organization of work stressing an underlying tension and ambiguity in the transaction cost framework the paper exploits a unique dataset to test for the first time with british data williamson s transaction cost predictions concerning the nature of employment contracts williamson tacitly assumes that asset specificity is exogenous in general however there is evidence in the literature that labour specificity is endogenous to employment contracts the paper endeavours to demonstrate that there is empirical evidence to suggest that specialized labour is indeed endogenous in the transaction cost mode

markets as institutions versus organizations as markets disentangling some fundamental concepts abstract this paper argues that ambiguities in concepts as important as institutions markets and organizations undermine progress of research programs intending to take these components seriously into account after a short review of some current confusions section i section ii discusses recent literature to arrive at definitions that encapsulate fundamental characteristics into pure categories in section iii exceptions and qualifications are introduced so as to operationalize the concepts in the real world 1 i organizations and markets are embedded in an institutional framework and 2 ii they overlap giving birth to hybrid forms however the conclusion contends that it is essential to maintain distinct concepts in order to understand these complex arrangements

the wealth age relation among the aged aged people face the problem of allocating over the rest of their lifetimes the wealth that they have accumulated during their working years this problem is fairly complex because they are uncertain about the dates of their death and because they may wish to use their wealth to finance general consumption or hold it to meet emergencies leave estates or maintain power or status whether skilled at dynamic programming or not aged people effectively do make these decisions what are the results some studies of the entire lifetime pattern of saving and wealth tend to support the simple life cycle model in which the aged use up their wealth to help finance consumption harold lydall for example found saving rates to increase and then decrease with age in the whole population and to be negative for the group aged 65 and over guarded support for the theory was found by franco modigliani and albert ando in britain and by dorothy projector in the united states more recently a f shorrocks examined the lifetime pattern of wealth holding in estate tax data for a single cohort and found the hump pattern that is characteristic of life cycle saving other evidence on wealth holding runs contrary to this however in a study of estate tax returns in washington d c james d smith found that wealth increased with age among the aged after controlling for other demographic variables examining national estate tax data john brittain found wealth to increase with age in the united states and a b atkinson and a j harrison reported the same pattern in england and wales in a sample of tiaa annuity recipients analyzed by james mulanaphy over half reported that their total savings had increased during retirement and another quarter reported that their savings had remained about the same in this paper i examine wealth holding patterns among aged married couples using survey data representing the entire aged population of the united states in 1968 the statistical analysis serves as a test of the hypothesis that emerges from life cycle theory and provides some further exploration into the economic behavior of the aged i find that the aged tend to increase their wealth over time

the feedback equilibria of a differential game of capitalism abstract the feedback equilibria of a capitalistic game described by kelvin lancaster are derived under concave utility functions with a constant degree of absolute risk aversion and standard production function it is shown that the equilibrium solution is unique if the rate of time preference and the constant degree of absolute risk aversion are sufficiently great some properties of the equilibrium solution are reported

on relative wealth effects and the optimality of growth abstract we present a model of endogenous growth in which a desire for social status lead individuals to care about their relative wealth the growth rate of the economy is socially optimal if the status motive is sufficiently important but the presence of status seeking may also lead to excessive growth

numerical simulation on property tax reform evidence from china this article analyses the property tax reform in china in a computable general equilibrium model that recognizes the interaction between and among housing markets in different provinces and macroec

marshallian recursive preferences and growth abstract although alfred marshall adhered to the classical doctrine of impatience he thought that the act of saving might itself confer utility we model this by making the discount factor a function of savings in addition to providing an intuitive rationale for increasing marginal impatience marshallian time preference has interesting implications for macroeconomics marshallian preferences lower interest rates by stimulating savings paradoxically it is possible for a tax cut to lower interest rates in a marshallian economy in a growth model with marshallian consumers a permanent increase in government expenditures causes super crowding out of consumption and reduces the steady state capital stock

institutions property taxation and local government finance in china china s rapid urbanisation has prompted its government to explore new sustainable sources of public revenue to finance the continued demand for urban infrastructure and services property tax advocates have sought to take advantage of the real estate booms that have occurred since economic liberalisation by actively campaigning for a real property levy as an appropriate policy choice against this background this study evaluates the prospect of implementing market value based property tax reforms in mainland china based on the new institutional economics perspective it posits property tax as an institutional arrangement which requires complementary mechanisms in land registration property appraisal tax administration social security and dispute resolution property tax reforms would not only necessitate technical changes but would also have extensive social political and legal repercussions for chinese society

the spirit of capitalism and optimal capital taxation abstract the paper reexamines the famous chamley judd zero capital tax theorem in model economies where the agents are endowed with the spirit of capitalism it is shown that the limiting capital income tax is not zero in general and depends on the utility specifications rather than the production technology the similar formulas of optimal capital taxes are derived in more general settings with multiple physical capitals or heterogeneous agents capitalists and workers

the role of intergenerational transfers in aggregate capital accumulation this paper uses historical u s data to directly estimate the contribution of intergenerational transfers to aggregate capital accumulation the evidence presented indicates that intergenerational transfers account for the vast majority of aggregate u s capital formation only a negligible fraction of actual capital accumulation can be traced to life cycle or hump savings a major difference between this study and previous investigations of this issue is the use of more accurate longitudinal age earnings and age consumption profiles these profiles are simply too flat to generate substantial life cycle savings this paper suggests the importance of and need for substantially greater research and data collection on intergenerational transfers life cycle models of savings that emphasize savings for retirement as the dominant form of capital accumulation should give way to models that illuminate the determinants of intergenerational transfers

social norms savings behavior and growth we argue that many goods and decisions are not allocated or made through markets we interpret an agent s status as a ranking device that determines how well he or she fares in the nonmarket sector the existence of a nonmarket sector can endogenously generate a concern for relative position in for example the income distribution so that higher income implies higher status moreover it can naturally yield multiple equilibria it is thus possible to explain differences in growth rates across countries without recourse to differences in underlying preferences technologies or endowments different social organizations lead to different reduced form preferences which lead to different growth rates

why people pay taxes the case of the development levy in tanzania abstract this paper examines factors determining tax compliance behavior in local authorities in tanzania the case study is the poll tax locally named development levy the study finds support for the hypothesis that tax compliance is positively related to factors such as ability to pay the perceived probability of being prosecuted and the number of tax evaders known personally by the respondent oppressive tax enforcement harassment of taxpayers and discontent with public service delivery seem to increase tax resistance and may explain widespread tax evasion

motives for private income transfers private income transfers are becoming increasingly recognized as a key aspect of the u s economy the majority of private income transfers occur inter vivos i e between living persons but very little is known about this type of transfer behavior this paper tests alternative hypotheses concerning motivation for inter vivos transfers two motives are considered altruism and exchange evidence presented here casts doubt on the altruistic model of transfer behavior observed patterns for inter vivos transfers are more consistent with exchange related motives this finding has important implications for the effects of public transfer programs on the distribution of economic well being

the ontology of economic power in capitalism mainstream economics and marx mainstream economics conceives power to be incompatible with perfect competition this conception i argue derives from its deductivist method and the empirical realist ontology that it presupposes following marx i show that capitalism constantly reproduces asymmetrical constraints on classes of individuals independent of the market form my ontological argument is rooted in the philosophy of critical realism my conclusion is that the dichotomy power competition is ontologically untenable if capitalist relations necessarily involve power it is not simply because neoclassical competition does not exist in reality as radical mainstream economists suggest but rather because capitalism altogether is a system of power

keeping one step ahead of the joneses status the distribution of wealth and long run growth assuming that the utility of each agent depends on its relative wealth position in the society this chapter constructs an endogenous growth model it is shown that even if the subjective discount rates differ across agents there exists a unique balanced growth equilibrium in which each agent owns a positive share of the world wealth it is also shown that if the agents are identical then an increase in savings incentives always raises the long run growth rate but if they are heterogeneous then an increase in savings incentives may lower the long run growth rate

evidence on wealth age profiles in canadian cross section data this paper reports on one component of a research program in which we are studying household behaviour to establish a set of empirical facts upon which researchers can construct more realistic models evidence on whether wealth age profiles conform to the inverse u shape predicted by the standard life cycle model is mixed here we show that there are significant differences in accumulation behaviour across major household types on average blue collar households decumulate after retirement but white collar do not la relation entre la richesse et l dge profils dr en moyenne les menages de cols bleus font l experience d une decumulation de richesse apres la retraite alors que les menages de cols blancs ne font pas cette experience

the spirit of capitalism and stock market prices in existing theory wealth is no more valuable than its implied consumption rewards in reality investors acquire wealth not just for its implied consumption but for the resulting social status max m weber 1958 refers to this desire for wealth as the spirit of capitalism the authors examine both analytically and empirically implications of weber s hypothesis for consumption savings and stock prices when investors care about relative social status propensity to consume and risk taking behavior will depend on social standards and stock prices will be volatile the spirit of capitalism seems to be a driving force behind stock market volatility and economic growth copyright 1996 by american economic association

status the distribution of wealth private and social attitudes to risk this paper supposes an individual cares about his her own wealth not only directly but also via the relative standing that this wealth induces the implications for risk taking are investigated in particular such a model provides a natural explanation of the concave convex concave utility described by friedman and savage however there are a number of key differences between the present model and any model based on own wealth alone for example an equilibrium wealth distribution here may have a middle class further the status interaction involves an externality and an equilibrium wealth distribution may be pareto inefficient but also about the implied relative standing in the distribution of wealth has a long but checkered history an early exponent of such ideas was of course veblen 1899 it is indeed a notion which most economists reject albeit usually without explicit comment a notable and articulate exception however is frank 1985 for example see also the references frank cites on pp 33 34 it is however a notion with substantial intuitive appeal and it seems useful to ascertain its consequences before coming to a final judgement as to its merits the present paper is concerned with deriving the consequences of such valuation of status for risk taking what seems to be the sharpest possible model is adopted here this assumes that what is essentially ordinal rank in the wealth distribution enters von neumann morgenstern utility as an argument in addi tion to wealth itself thus higher wealth increases utility not only directly but also indirectly via higher status in the interests of both simplicity and drama it is typically assumed here that all individuals have identical utility functions which are concave in wealth but convex in status section 2 discusses how the model provides a natural explanation of the fundamental phenomenon addressed by friedman and savage 1948 that individuals may simultaneously purchase insurance and participate in lotteries although each individual here has a utility function which is concave in wealth itself utility can nevertheless be convex in wealth over some range when the indirect effect via status is included this effect is enhanced by the convexity of utility in status but will follow in any case if increasing wealth entails moving up in status much more rapidly than losing wealth entails moving down it is shown

the persistence of power despite the changing meaning of homeownership an age period cohort analysis of urban housing tenure in china 1989 2011 using nine successive waves of the china health and nutrition survey chns data set this study employs hierarchical age period cohort logistic models hapc to analyse temporal patterns of urban homeownership from 1989 to 2011 with the changing meaning of homeownership due to housing reforms the strong period increases in homeownership track policy changes and the most dramatic increase occurs mainly in the era of housing privatisation rather than housing commodification the temporal analyses also offer insights into housing stratification from redistribution to markets the positive effect of education on homeownership is explained by period increases in homeownership whereas working in state sectors has persistently attached to preferred housing tenure choice before and after the housing reforms moreover the significant cohort effect lends support to strengthened temporal inequalities in the reform era these findings not only provide a dynamic understanding of housing stratification in post so

building talented worker housing in shenzhen china to sustain place competitiveness in china economic reforms over the last three decades have transformed its urban governments so that economic growth takes priority over other policy goals the purpose of this paper is to explore how talented worker housing policies have emerged within one of china s first class cities namely shenzhen to address its affordability problems but also to enhance local economic competitiveness whilst shenzhen is heading in the direction of an international entrepreneurial city focusing in particular on high value added industry it needs to attract and retain professional skilled workers to sustain this growth trajectory drawing on the concept of urban entrepreneurialism the paper examines how talented worker housing policies and procedures have been initiated and implemented in shenzhen in relation to its economic development strategy and affordable housing programme the paper suggests that not only is policy delivery proving problematic but affordability problems remain insurmountable thus potentially limiting the effectiveness of this particular urban entrepreneurial strategy in supporting place competitiveness