bluuebunny/crossref_metadata_2025 huggingface dataset:
Neoclassical and Neo‐Neoclassical Real Business Cycle Theory
Authors: Phelps Edmund S.
Published: October 2003

This chapter and the next review two schools of thought on the role of non‐monetary forces acting through non‐monetary channels in the generation of macroeconomic fluctuations. The subject in this chapter is the theory that its developers call ‘real business cycle theory’, and sometimes ‘the real business cycle theory’ as if all good non‐monetary theory had to be like theirs. The distinguishing feature of these models is their classical style, but the classical approach is not another manifestation of New Classical thinking. What was ‘new’ in that thinking was the incorporation of local, or non‐global, information into a general micro–macro model with rational expectations––but the ‘real business cycle’ models dispense with that feature altogether. Typically, they are, at least from a formal standpoint, essentially classical models of a single‐agent economy, and the classical single agent––Robinson Crusoe in the usual treatment of him––does not have the New Classical (and Keynesian) problem of inferring the data in unobserved parts of the economy.
Non‐Monetary Theories of Unemployment Fluctuation: The Structuralist School
Authors: Phelps Edmund S.
Published: October 2003

This chapter and the previous one review two schools of thought on the role of non‐monetary forces acting through non‐monetary channels in the generation of macroeconomic fluctuations. The subject in this chapter is the ‘structuralist school’, which views changes in unemployment as the outcome of shifts in the structural characteristics of the economy. The structuralists offer a theory of a sort of real wage ‘rigidity’ in which a downward shock to labour demand forces a decrease in employment, thus an increase in unemployment. The structuralist school also points to a rich variety of operating assets used in production, such as customers and employees as well as plant and equipment, with the result that there no longer exists an aggregate production function to which the demand for labour is tightly connected.
Game Theory and Economic Modelling
Authors: Kreps David M.
Published: October 2003

Beginning in the early to the mid‐1970s, non‐cooperative game theory became an important tool of economics. This book is based on a series of lectures given at Oxford, and comments on this use of non‐cooperative game theory. After providing a non‐technical introduction to the basic ideas of non‐cooperative game theory, the book discusses: (1) how and why game theory has been a success—because it permits economists to model and analyse situations of dynamic competition and where private information plays an important role; (2) how and why the theory has failed—to provide an understanding of when it (and equilibrium analysis) applies, when not, and what to do when not; and (3) how its weaknesses might be addressed—by considering individuals who are imperfectly rational and learn adaptively.
The Standard
Authors: Kreps David M.
Published: October 2003

Argues that, for purposes of this book, game theory should be judged by the substantive insights it has (or has not) provided into real economic situations.
Basic Notions of Non‐Cooperative Game Theory
Authors: Kreps David M.
Published: October 2003

Provides the reader who has not studied game theory a brief and non‐technical introduction to the main categories of models and forms of analysis: strategic‐ (or normal‐) form games; extensive‐form games; dominance; and Nash equilibrium.
The Successes of Game Theory
Authors: Kreps David M.
Published: October 2003

Illustrates some of the successes of non‐cooperative game theory in economics. Specifically, it discusses how non‐cooperative game theory has helped economists to understand dynamic competition, credibility and reputation, cooperation based on reciprocity and the threat of punishment, and interactions in which parties hold private information, including information about their own basic motivations.
The Problems of Game Theory
Authors: Kreps David M.
Published: October 2003

The weaknesses of game theory for purposes of economic modelling are discussed: the theory requires that protocols for interaction are precise (whereas in the real world they are often ambiguous). The theory often provides many equilibria and no way to choose among them. Despite work on so‐called refinements of equilibrium, the theory fails to help us understand how individuals react to counter‐theoreticals in dynamic interactions. Equilibria are often very delicate, depending on states of nature that have very small probability a priori. The theory fails to explain how the rules of a particular game got to be what they are.
Bounded Rationality and Retrospection
Authors: Kreps David M.
Published: October 2003

Argues that many of the weaknesses of game theory arise from weaknesses in how economists model individual (dynamic) behaviour: with hyper‐rational and forward‐looking, farsighted individuals. Progress is likely to be made by re‐examining our models of behaviour, incorporating bounds to individual rationality and modelling individuals who are more retrospective, learning adaptively from the past.
Poverty and Famines
Authors: Sen Amartya
Published: October 2003

The main focus of this book is on the causation of starvation in general and of famines in particular. The traditional analysis of famines concentrates on food supply. This is shown to be fundamentally defective—it is theoretically unsound, empirically inept, and dangerously misleading for policy. The author develops an alternative method of analysis—the ’entitlement approach’, which concentrates on ownership and exchange. Aside from developing the underlying theory, the approach is used in a number of case studies of recent famines, including the Great Bengal Famine of 1943, the Ethiopian famines of 1973 and 1974, the Bangladesh famine of 1974, and the famines in the countries of the African Sahel in the 1970s. The book also provides a general analysis of the characterization and measurement of poverty. Various approaches used in economics, sociology, and political theory are critically examined. The predominance of distributional issues, including distribution between different occupational groups, links up the problem of conceptualizing poverty with that of analysing starvation. The book contains some technical economic analysis, but the text of the book has been kept as informal as possible, so that the text is accessible to the non‐technical reader, and the main lines of reasoning and their applications to the case studies are easily followed. Technicalities and mathematical reasoning are confined to the four appendices, which (1) present a formal analysis of the notion of exchange entitlement, (2) provide illustrative models of exchange entitlement, (3) examine the problem of poverty measurement, and (4) analyse the pattern of famine mortality based on the Bengal famine of 1943.
Poverty and Entitlements
Authors: Sen Amartya
Published: October 2003

Introduces the basic approach used by the author to analyse the causes of starvation in general and famine in particular. The approach involves a study of entitlement systems, based on the author's thesis that starvation statements are about the relationship of persons to the commodity of food, rather than about the food supply per se. Starvation statements translate readily into statements about ownership of food, and ownership relations are one kind of entitlement relations.
Concepts of Poverty
Authors: Sen Amartya
Published: October 2003

Problems in the conceptualization and measurement of poverty are discussed. Two requirements are identified as (1) a method of identifying a group of people as poor (identification), and (2) a method of aggregating the characteristics of the set of poor people into an overall image of poverty (aggregation). As a foundation for these exercises, a study is made of the kinds of approaches that can be used. These include the biological (minimum nutritional requirement) and inequality approaches to poverty, the concept of relative deprivation, value judgement, policy definition, common standards for comparisons between communities, and the relative scaling of deprivation as a means of aggregation.
Poverty: Identification and Aggregation
Authors: Sen Amartya
Published: October 2003

It was argued in the previous chapter that the measurement of poverty can be split into two distinct operations—identification and aggregation. Within this general perspective, this chapter takes up some more detailed and more technical issues concerned with identification and aggregation. Issues addressed are the definition of poverty in terms of the characteristics of food commodities, identifying the poor directly or according to income, the definition of family size in terms of equivalent adults, and poverty gaps, and relative deprivation. The last part of the chapter gives a critique of standard poverty measurements.
Starvation and Famines
Authors: Sen Amartya
Published: October 2003

The specific problem of starvation and famines is analysed in general terms. First, starvation and famine are compared and contrasted, and their relationship to poverty outlined. They are then analysed in terms of time contrasts (temporal variation) and group contrasts (distributional variation) in food availability and consumption.
The Entitlement Approach
Authors: Sen Amartya
Published: October 2003

An analysis is made of the entitlement approach to starvation and famines. This concentrates on the ability of people to command food through the use of the legal means available in society, including the use of production possibilities, trade opportunities, entitlements vis à vis the state, and other methods of acquiring food. Aspects discussed are exchange entitlement mapping (or E‐mapping), starvation and entitlement failures, the limitations of the entitlement approach, and direct and trade entitlement failures.
The Great Bengal Famine
Authors: Sen Amartya
Published: October 2003

A case study of the Great Bengal Famine of 1943, which had a reported death toll of about 1.5 million. An explanation for the famine is analysed in terms of the most common approach used—food availability decline (FAD), and this is rejected for various reasons. Analyses are next made in terms of exchange entitlements and the causes of the sharp movements of these, and of the class basis of the destitution. The last part of the chapter discusses the role of theory in the failure of the official policy for tackling the famine.
The Ethiopian Famine
Authors: Sen Amartya
Published: October 2003

A case study of the Ethiopian Famine of 1972–4, which had a reported death toll of between 50, 000 and 200, 000 in a population of about 27 million. An explanation for the famine is analysed in terms of the most common approach used—food availability decline (FAD), but this is rejected except for the situation in the province of Wollo, which is discussed in terms of possible transport or entitlement constraints. The occupational status of the destitutes (victims) in Wollo is analysed and the most susceptible groups—the nomadic pastoralists and the agriculturalists—identified. The entitlement situations of these two groups are discussed.
Drought and Famine in the Sahel
Authors: Sen Amartya
Published: October 2003

A case study of the drought of 1968–73, and the famines of the 1970s in the in the six West African countries of Mauritania, Senegal, Mali, Upper Volta, Niger, and Chad. The famines are analysed in terms of food availability decline (FAD) vis à vis entitlements, occupational status of the destitutes, and their entitlements. The most susceptible groups were the nomadic pastoralists and the sedentary agriculturalists. The last part of the chapter addresses some policy issues relating to the freeing of the Sahelian population from vulnerability to drought and famine.
Famine in Bangladesh
Authors: Sen Amartya
Published: October 2003

A case study of the 1974 famine in Bangladesh, which was associated with the floods of that year, and had an official mortality of 26,000. The causation of the famine is analysed in terms of food availability decline (FAD), and this approach is shown to offer very little by way of explanation of the famine, although the general food shortage resulting from low food imports and government food stocks is identified as a constraint in government relief operations. An analysis of the occupational status and the intensity of destitution show that the largest group were labourers. The exchange entitlement of the labourers is analysed in detail, and it is concluded that this approach gives a much better understanding of the famine.
Taxation of Income from Capital
Authors: Jorgenson Dale W. , Yun Kun‐Young
Published: October 2003

Features of the US tax system and law are employed to illustrate the complexities that arise in practical discussions of tax policy: the tax treatment is considered of income from assets held by households, non-corporate businesses and corporations under US tax law, and for assets held in each sector an appropriate cost of capital and rate of return is defined. The chapter begins with the household sector, where the taxation of income from capital takes its simplest form. The taxation of income from non-corporate business is then considered — this is treated as fully distributed to its owners (individual income tax). Next, an analysis is made of the taxation of corporate income, which requires the integration of provisions of individual and corporate income tax laws. The last two sections of the chapter discuss tax reform and alternative approaches.
The US Tax System
Authors: Jorgenson Dale W. , Yun Kun‐Young
Published: October 2003

A quantitative and detailed description is presented of the US tax system and law, which begins by providing estimates of the rates of capital income taxation at both corporate and individual levels for the period 1947–86; property tax rates are also presented for household, non-corporate and corporate sectors. It is noted that the adoption of these tax preferences in the USA dramatically altered the incentives to invest in different types of assets and radically changed the distribution of the tax burden. Provisions are then discussed for capital cost recovery, including capital consumption allowances and the investment tax credit; next, a description is given of features of the financial structure of corporate and non-corporate businesses and households that affect the taxation of income from capital. Finally, the impact is considered of the Tax Reform Act of 1986 on the US tax system, especially in relation to the tax (financial) structure for income from capital; alternative approaches are considered. The data presented can be used to implement either the traditional or the new view of the corporate cost of capital.
Effective Tax Rates
Authors: Jorgenson Dale W. , Yun Kun‐Young
Published: October 2003

Alternative policy provisions are compared for capital income taxation and the social rates of return in terms of marginal effective tax rates, since, by measuring these for different assets, it is possible to quantify the sources of distortions in decisions involving the allocation of capital among different uses. Marginal effective tax rates for the USA are presented for capital income over the period 1947–86 for corporate and non-corporate businesses, and households. Differences in the effective tax rates under the 1986 Tax Reform Act (and the pre-existing 1985 Tax Law) are then considered, looking again at the same three categories, and also giving data on social wedges (differences in social rates of return) between the short- and long-lived assets. The last section of the chapter looks at alternative approaches.
Summary and Conclusion
Authors: Jorgenson Dale W. , Yun Kun‐Young
Published: October 2003

This final chapter provides an evaluation of the cost of capital approach to tax policy analysis. This approach has amply proved its usefulness as a guide to tax reform. While the US tax policy changes of the early 1980s introduced additional barriers to efficient allocation of capital, the Tax Reform Act of 1986 reduced these barriers substantially. Important discrepancies remain, however, between effective tax rates on income from household and business assets (both corporate and non-corporate). Further reduction in these discrepancies presents an important opportunity for increasing the efficiency of capital allocation.
Supply and Demand?
Authors: Hicks John
Published: October 2003

The theories about price-formation in competitive markets, that were available to economists at the time when Keynes was writing, had been the work of the so-called ‘neo-classics’ between 1870 and 1900. All accepted the distinction, that had come down from Adam Smith, between market value and ‘natural’ or normal value, natural value depending on cost of production, market value on supply and demand. Market value would ‘tend’ towards natural value by adjustment of supply. It was accordingly held, for nearly a century after Smith, that natural values were the only values that required attention. The whole of Ricardo's system, to take the most important example, runs in terms of natural values. The chief thing which happened at the ‘marginal revolution’ of Jevons and his contemporaries was a shift of attention to market values. They were determined, it was accepted, by supply and demand. This chapter addresses the question of just how market worked.
The Function of Speculation
Authors: Hicks John
Published: October 2003

This chapter argues that organized commodity markets need to occupy a central place in a general theory of markets because they are the most sensitive markets we know. They are the practical counterpart to the ‘perfect competition’ models of the textbooks; but they do more for the economist than those models can do, because they demonstrate that most prices are determined, not by mechanical matching of flow propensities, but by the way they are interpreted, thus by the state of mind of those who trade.
The Pricing of Manufactures
Authors: Hicks John
Published: October 2003

In the simplest model of a production system we should make room for two sorts of intermediaries — one between primary producers and manufacturers, the other between manufacturers and consumers, what are commonly called the distributive trades. This chapter focuses on the resemblances and differences between these two sorts of intermediaries. These distributive trades are referred to as secondary merchants, contrasting them with the primary merchants, who deal in primary products.
The Nature of Money
Authors: Hicks John
Published: October 2003

It will no doubt be taken for granted that in the markets that have been discussed so far, the typical transaction is an exchange of some article (good or service) for something that is recognized as being money. It may also have been taken that the money is simply handed over, as one does when one buys a newspaper in a shop. This chapter calls into question these two assumptions, asking how far they are justified.
The Market Makes Its Money
Authors: Hicks John
Published: October 2003

This chapter traces the development of a competitive market for simple lending. Starting from the market for acceptances of bills of exchange, which needs no specialists in financial dealings (bankers or even brokers) for it to work, it moves on the emergence of financial operators in a fully monetized economy, to currency exchange to government borrowing.
Banks and Bank Money
Authors: Hicks John
Published: October 2003

This chapter analyzes the functions of banks. A firm can be considered a fully formed bank when it is doing all these things: (1) accepting deposits, (2) discounting bills, and (3) making advances to customers. A fourth function commonly attributed to a bank, that of providing a medium of payment; ways a bank can protect itself from risks, and the concept of liquidity are discussed.
Choice Among Assets
Authors: Hicks John
Published: October 2003

The liquidity concept, which in Keynes's Treatise, (1930) had been confined in application to the behaviour of banks, can be reinterpreted so as to give it a wider reference. Any sort of financial firm can be confronted with similar alternatives, and so could have assets of various degrees of liquidity. One could think of it being faced with a ‘spectrum’ of such assets from which to choose, a spectrum which could be wider or narrower than that on which a bank would usually work. And having gone so far, why not go further? Why not look for liquidity elements in the decisions of all sorts of firms, and even in the management of his property by the private capitalist? This chapter considers the two directions in which the concept might be generalized — to the decisions of more sorts of choosers and between more sorts of assets.
Theories of Interest: Keynes Versus Marshall
Authors: Hicks John
Published: October 2003

This chapter considers Marshall as the leading opponent of Keynes. It argues that when Keynes spoke of ‘classical’ theory it was Marshall's he had in mind. He had learned and then taught in the school of economics that Marshall had founded at Cambridge; it was the doctrine that he himself had been teaching that he was now deliberately casting off.
Markets in Equities: Ownership and Control
Authors: Hicks John
Published: October 2003

This chapter begins with a discussion of the rationale behind the establishment of a limited liability company. It then analyzes the issue of capital raising, beginning with the case in which the shares are not freely transferrable and going on to the more important case when they are. It also discusses the concept of shareholder interests and takeovers.
Interest and Investment
Authors: Hicks John
Published: October 2003

This chapter begins with a discussion of R. G. Hawtrey's monetary theory, which was rejected by Keynes. It then discusses the concepts of defensive investment and innovative investment.
An International Economy
Authors: Hicks John
Published: October 2003

This chapter addresses the issue of Britain's participation (and degree of participation) in, the European Monetary System (EMS). It does not attempt any direct conclusion to that issue. Instead, it constructs a theoretical model which may have a bearing upon it — and considers similar questions which have come up in the past, and will surely continue to do so, as far ahead as one can look. Thus what it means by an international economy is one consisting of a number of national economies, each of which uses its own money. Within each nation are a number (which we take to be a large number) of separate decision-makers, persons and firms, private and public, which have commercial and financial relations between them. The parties to a transaction may have the same, or they may have different, national attachments.
What Is Bad About Inflation?
Authors: Hicks John
Published: October 2003

This chapter argues that the bad thing about inflation is principally not its effects — the losses of ‘convenience and security’ to which older economists gave so much attention — but the weakening of the economy. If that is cured, inflation, with only a little help from monetary policy, will cure itself. The subject of hyper-inflation is briefly discussed.
The Japanese Enterprise System
Authors: Fruin W. Mark
Published: October 2003

Four streams of inquiry and interpretation are merged in a study of the evolution and emergence of Japan's 200 leading industrial firms during the twentieth century. First, the book is a study of how the industrial institutions of modern Japan appeared and matured. Second, it looks at the basic forms of social interaction and economic organization in Japan. Third, the book is a development study of how circumstances of rapid technical and economic change have shaped the Japanese business system. Finally, it is a study of how Japanese managers have responded to and shaped those circumstances. The fourfold synthesis offers a model of industrial development and organization under conditions of late development and private initiative that falls somewhere between the capitalist development state and free market economy models.
Introduction
Authors: Fruin W. Mark
Published: October 2003

The introduction discusses the rapid development of Japan's economy in the twentieth century and introduces firm‐level structural and strategic complements to it. Late development and an emphasis on technology acquisition, it is argued, result in competitive strategies and cooperative structures uniting factory, firm, and the interfirm network. The different sections look at the context of the Japanese enterprise system, compare it with other systems worldwide, analyse the important role of the highly successful corporation in modern Japan, and discuss the implications of the Japanese corporation for traditional firm theory and as a global business model.
History and the Logic of Interdependence
Authors: Fruin W. Mark
Published: October 2003

This chapter analyses the interorganizational model of factory, firm, and interfirm network in Japan that is at the heart of book. The argument stresses the need for specialization at the factory level, given the overwhelming emphasis on rapid technology transfer from the West, and the concomitant narrow scope of technology‐based firms. Interfirm networks provided the breadth of functions and resources needed by firms to grow rapidly.
Inventing the Enterprise System
Authors: Fruin W. Mark
Published: October 2003

This chapter looks at the emerging modern enterprises of early twentieth‐century Japan and divides them into three main categories: zaibatsu firms (national enterprises) formed in large part by the devolution of government‐founded businesses (accounts are given of the four main groups before 1945 – Mitsui, Sumimoto, Mitsubishi, and Yasuda); independent urban enterprises that harnessed economies of scale and scope based on the technologies of the day, such as Hattori Seiko, Takeda Chemical Industries, and Kirin Beer; and independent rural firms such as Onoda Cement and Noda Shoyu, which grew on the basis of both city and countryside demand. The attributes of each type are discussed. The nearly universal separation of production and distribution in early twentieth‐century Japanese enterprises is discussed in relation to the development of trading companies and enterprises of scope and scale.
Defining the Enterprise System
Authors: Fruin W. Mark
Published: October 2003

This chapter focuses on the inter‐war years in Japan and argues that the focal factories, unitary, specialized firms, and interfirm networks that fully define the Japanese enterprise system appeared at this time. As a result, when Japan recovered economically after the Pacific War, the business organizations of the post‐war era not surprisingly mirrored those of the pre‐war period. The different sections of the chapter look at large modern corporations from 1918 to 1954 (their size and organizational complexity, evolving structures, and strategies), present a typology of inter‐war enterprises (using the same three categories as ch. 4 – zaibatsu, independent urban, independent rural firms), and look towards the emergence of large, modern enterprises.
Advancing the Enterprise System
Authors: Fruin W. Mark
Published: October 2003

This chapter looks at the evolving enterprise system from the 1950s to the 1980s. It argues that the inter‐organizational model of focal factories, unitary firms, and interfirm networks remained the dominant industrial organization model in spite of significant changes in industrial relations, ownership, government policies, and sources of technology. The different sections of the chapter look at large modern corporations from 1954 to 1987, social transformation and shop‐floor reformation, the adaptive as opposed to the innovative enterprise, structural change, and the post‐war strategy of Matsushita and Hitachi, organizational interdependence (enterprise groups) in post‐war Japan (the six main types of interfirm groupings, and new enterprise groups), the utility of interfirm networks, and the modern corporation and enterprise system.
Inequality Reexamined
Authors: Sen Amartya
Published: October 2003

Amartya Sen revisits the issues tackled in his previous seminal work, ‘On Economic Inequality’, first published in 1973 and expanded in 1997, and provides new analyses and insights in this crucial area. The book brings together and develops some of the most important themes of Sen's work over the last decade. He notes that the difference between virtually all contemporary ethical approaches to social arrangements lies not in whether they all demand equality of something, but in what sort of equality they propound. Any claim to equality must take account of the diversity of human beings and their characteristics. Sen argues that we should be concerned with people's capabilities rather than either their resources or their welfare. He also looks at some types of inequalities that have not yet been studied as systematically as inequalities of class and wealth have been. These include, inter alia, the important issue of gender inequality.
Introduction Questions and Themes
Authors: Sen Amartya
Published: October 2003

The introduction to the book discusses the fact that the idea of equality is confronted by two different types of diversities: (1) the basic heterogeneity (diversity) of human beings, and (2) the multiplicity of variables in terms of which equality can be judged. This book is concerned with both these diversities, and also, specifically, with the relation between the two. The heterogeneity of people leads to divergences in the assessment of equality in terms of the choice of different focal variables (income, wealth, etc.), which in the language of economics, are called ‘space’. It is pointed out that ethical theories that reject equality in terms of one variable or space, may endorse it in terms of another. After a preamble on these matters, the introduction gives an outline of the content of the rest of the book.
Equality of What?
Authors: Sen Amartya
Published: October 2003

The two central issues in the ethical analysis of equality—‘Why equality?’ and ‘Equality of what?’ are addressed. It is noted that ethical plausibility is hard to achieve unless everyone is given equal consideration in some space (or variable) that is important in the ethical theory under consideration. In addition, it is difficult to see how an ethical theory can have general social plausibility without extending equal consideration to all at some level. However, it is argued that the question of ‘why equality’ is not a central issue in differentiating standard theories, since they are all egalitarian in terms of some space or variable; rather, it is ‘equality of what’ that is the important issue. The different theories give different answers to the question, ‘equality of what’ that are distinguishable in principle and involve conceptual different approaches, but whose practical force depends on the empirical importance of the relevant human heterogeneities that make equality in one space diverge from that in another.
Freedom, Achievement and Resources
Authors: Sen Amartya
Published: October 2003

One of the aspects of inequality assessment that has received less attention than it deserves relates to the distinction between achievement and the freedom to achieve. The nature, reach, and relevance of that distinction between achievement and freedom are briefly discussed here, making use of conceptual grounds for discrimination as well as analytical procedures used in modem economics. The different sections of the chapter are freedom and choice; real income, opportunities, and selection; and freedom distinguished from resources.
Functionings and Capability
Authors: Sen Amartya
Published: October 2003

This chapter identifies, develops, and defends a particular choice of space and its use in terms of freedom to achieve. A person's capability to achieve functionings that he or she has reason to value provides a general approach to the evaluation of social arrangements, and this yields a particular way of viewing the assessment of equality and inequality. The functionings included can vary from most elementary ones, such as being well nourished, avoiding escapable morbidity and premature mortality, etc. to quite complex and sophisticated achievements, such as having self‐respect, being able to take part in the life of the community, and so on. The selection and weighting of different functionings influence the assessment of the capability to achieve various alternative functioning bundles.
Freedom, Agency and Well‐Being
Authors: Sen Amartya
Published: October 2003

The concentration on the freedom to achieve and not just on the level of achievement raises some deep questions about the connection between the appraisal of the alternative achievements and the value of the freedom to achieve them, which are addressed in this chapter. Even the freedom‐based perspective must pay particular attention to the nature and value of the actual achievements, and inequalities in achievement can throw light on inequalities in the respective freedoms enjoyed. This recognition requires rejection of rules of freedom assessment such as the counting of the number of alternatives in the ’range of choice’, but more constructively, it suggests practical ways of using observable data regarding achievements to get a partial but significant view of the freedoms enjoyed by different persons. In this context, the difference between well‐being objectives and the other objectives that a person may have are discussed. This difference not only leads to some plurality within the idea of freedom itself but also has important implications for the divergence between the perspective of achievements and that of freedoms.
Justice and Capability
Authors: Sen Amartya
Published: October 2003

This chapter first addresses the informational bases of justice. It then goes on to discuss and give a critique of the Rawlsian theory of justice as fairness, which is regarded by Rawls himself as a political conception. The assessment of justice is discussed in terms of distribution of primary goods (which include rights, liberties and opportunities, income and wealth, and the social bases of self‐respect), and in terms of capabilities (the freedoms enjoyed by people to choose lives that they value). The last part of the chapter addresses the issue of human diversity in the Rawlsian theory of justice as fairness.
Welfare Economics and Inequality
Authors: Sen Amartya
Published: October 2003

After a preamble on the choice of space (variable) and evaluative purpose, the matter of whether a person's position in terms of achievement should be judged positively (as level of achievement reached) or negatively (in terms of shortfall compared with possible maximal achievement) is addressed. It is noted that the welfare economics literature on inequality has typically overlooked human diversity in terms of this maximum potential. The rest of the chapter examines and contrasts the evaluation of inequality in terms of (1) justice and (2) welfare.
Poverty and Affluence
Authors: Sen Amartya
Published: October 2003

If poverty is seen as the deprivation of some minimum fulfilment of elementary capabilities, it becomes easier to understand why it has both an absolute and a relative aspect. These considerations are important in dealing with poverty in any country (rich or poor), but are particularly relevant in understanding the nature of poverty in richer countries, which is addressed in this chapter. The persistence of poverty in otherwise affluent countries is an apparently puzzling phenomenon that is beginning to get serious attention in contemporary debates, and it is argued here that the understanding and the remedying of this problem can both be helped by explicit consideration of the relation between deprivations in different spaces, especially between incomes and the capability to lead secure and worthwhile lives.
Class, Gender and Other Groups
Authors: Sen Amartya
Published: October 2003

The relevance of the capability perspective is discussed in the context of differences in class, gender, and other social features. Human diversity is shown, once again, to play a crucial part in strengthening the significance of the informational departure in moving from the spaces of incomes, opportunities, happiness, primary goods, etc. to taking direct note of the achievement of functionings and the capability to achieve them. The capability perspective is more sensitive than utility‐based approaches to problems of entrenched deprivation, which can lead to defensive adjustment of desires and expectations (thereby distorting the metric of utilities). It can also be fairer in dealing directly with freedoms rather than concentrating on the means of freedoms. These differences are significant in assessing inequality and injustice across the barriers of class, gender, and other social divisions.
The Demands of Equality
Authors: Sen Amartya
Published: October 2003

Some of the general points that have emerged from the analysis of inequality presented in the rest of the book are reviewed and assessed. Particular concern is given to the interrelations between the methodological and substantive issues. The different sections of the chapter are questions of equality; equality, space, and [human] diversity; plurality, incompleteness, and evaluation; data, observations, and effective freedoms; aggregation, egalitarianism, and efficiency; alternative defences of inequality; incentives, diversity, and egalitarianism; on equality as a social concern; responsibility and fairness; and capability, freedom, and motivations.
The Structure of Strategy
Authors: Kay John
Published: October 2003

There is a fundamental difference between wish‐driven strategies and strategies based on the effective match between external relationships of the firm and its own distinctive characteristics. The case for the latter is made through the contrast of three stories of business success and three stories of business failure. Business success requires an adaptive and opportunistic strategy, which nevertheless remains rational, analytic, and calculated.
Co‐Operation and Co‐Ordination
Authors: Kay John
Published: October 2003

A firm is viewed as a set of relationships among its stakeholders and between itself and other firms. Game theory is used as a stylized way of discussing issues of cooperation through the ‘Prisoner's Dilemma’, of coordination through the ‘Battle of the Sexes’, and of differentiation through the game of ‘Chicken’. Strategic commitment is seen as a means of gaining by limiting one's own options.
Relationships and Contracts
Authors: Kay John
Published: October 2003

Following an understanding of the relationships that form a firm, two main types of commercial relationships are recognized. Spot contracts refer to agreements for immediate exchanges, whereas relational contracts occur in cases in which the companies involved face a ‘repeated game’. The appropriateness of each depends on the specific circumstances of the exchange.
Architecture
Authors: Kay John
Published: October 2003

‘Architecture’ is introduced as the first of the three primary sources of distinctive capabilities and it refers to a network of relationship contracts within, or around, the firm. It can be subdivided into internal architecture (relationships with employees), external architecture (relationships with their suppliers and customers) and networks (relationships among a group of firms engaged in related activities). It adds value by helping create organizational knowledge and routines that enable the company to respond flexibly to changing circumstances and allows easy exchange of information. Note that such capabilities can only add value in a long‐term context, which penalizes opportunistic behaviour.
Strategic Assets
Authors: Kay John
Published: October 2003

Certain competitive advantages are based not on the distinctive capabilities of firms but on their dominance or market position. These are the ‘Strategic Assets’ of the company and can broadly be separated into three main types. Natural Monopolies occur in markets that cannot accommodate more than one firm, Sunk Costs can prevent entry by resulting in a different cost structure between the incumbent and potential entrants, while Market Restrictions such as licences and regulation can further deter entry. These are different from distinctive capabilities in that they could be acquired by any company facing similar circumstances.
Markets
Authors: Kay John
Published: October 2003

For firms to turn their distinctive capabilities to competitive advantage, they must choose the appropriate markets in terms of both product and geographic dimensions. The choice of markets must make the best use of the distinctive capabilities that a company may have.
Mergers
Authors: Kay John
Published: October 2003

Mergers can add value when they enable distinctive capabilities to be exploited more widely or more effectively. However, as it is most often the case, mergers and alliances are the result of financial objectives and typically fall short of the hopes of their promoters.
Sustainability
Authors: Kay John
Published: October 2003

Case studies and statistical evidence are used in order to show that many companies are successful in building sustainable competitive advantage using their distinctive capabilities. However, distinctive capabilities continue to add value, only if both the capability and the distinctiveness are sustainable. Of the primary distinctive capabilities, reputation is easiest to maintain, innovation is usually the most difficult, whereas for strategic assets, handling public policy is crucial.
Appropriability
Authors: Kay John
Published: October 2003

If a competitive advantage is to form the basis of corporate success, it must also be appropriable. Appropriability is the capacity of the firm to retain the added value it creates for its own benefit. However, who benefits from this added value depends on the decisions of the firm, the structure of the market in which it operates, and the sources of the added value itself.
Pricing and Positioning, 1
Authors: Kay John
Published: October 2003

The type of the competitive market in which firms operate will depend on the implicit rules that govern the behaviour of the companies. When there are long‐term relational contracts, there is the opportunity for prices to reflect the value of products to the customers as well as the cost of the product. Accordingly, the less stable the competitive environment, the greater the degree to which prices will be determined by cost rather than value.
Pricing and Positioning, 2
Authors: Kay John
Published: October 2003

Successful companies must strive for stable competitive environments that can be the result of factors such as product homogeneity, stability of cost/demand conditions and limited number of sellers. In this context, product/company positioning ought to be the result of not only the distinctive capabilities of the company but also that of the competitive dynamics.
Advertising and Branding
Authors: Kay John
Published: October 2003

Advertising and branding are recognized as important tools of competitive strategy. The main value of advertising rests on its demonstration of the suppliers’ continued commitment to the market. Brands are used to reassure customers about the attributes of a product, as well as to convey information about them.
The Industry
Authors: Kay John
Published: October 2003

This chapter introduces the concept of the strategic audit. It begins with the identification of the customers’ needs and characteristics, while, by understanding the value chain, costs, returns, and the opportunity to add value are explored. The chapter undertakes this exercise for four European industries—Italian knitwear, airlines, retail banking, and champagne.
The Firm
Authors: Kay John
Published: October 2003

Following the understanding of the market, the strategic audit focuses on the firm itself. Using the examples of British Airways and Benetton, this chapter illustrates how a deep understanding of the firm's distinctive capabilities and strategic assets defines its corporate strategy and describes the business it should be in.
The Nation
Authors: Kay John
Published: October 2003

Explains the relation between competitive advantage in the firm and competitive advantage in the national economy. In the context of a free market system, the former can lead to the other, given that inequality of information, externalities, and the existence of natural or strategic monopolies are absent. The basic sources of competitive advantage of nations are similar to the sources of competitive advantage for firms, i.e. sustainable and appropriate distinctive capabilities of architecture reputation and innovation.
A Brief History of Business Strategy
Authors: Kay John
Published: October 2003

This chapter describes the evolution of business strategy. It begins with the 1960s perspective in which strategy was largely equated with corporate planning; the 1970s see an emphasis on diversification and portfolio planning. The 1980s and 1990s are characterized by a focus on core competencies and the development of less analytic, more people‐oriented approaches to management. The still dominant rational approach to strategy is explained and its criticisms discussed. However, it is argued that these criticisms are based on a wish‐driven view of strategy and is not as relevant to a strategy rooted in the distinctive capabilities of the individual firm.
Introduction
Authors: Kymlicka Will
Published: October 2003

This introduction clarifies some key definitions, and outlines the objectives and structure of the book.
The Politics of Multiculturalism
Authors: Kymlicka Will
Published: October 2003

Begins by distinguishing various forms of cultural pluralism, which can sometimes be conflated under the label of ‘multiculturalism’, distinguishing, in particular, between ‘multination’ states possessing national minorities and ‘polyethnic’ states possessing ethnic groups. It then provides a typology of the different sorts of minority rights that ethnic and national groups may demand. In particular, it distinguishes between three types of group‐differentiated collective rights—rights of self‐government (involving the delegation of powers of government, often within a federal structure), polyethnic rights (involving financial support and legal protection for certain practices associated with particular ethnic or religious groups), and special representation rights (guaranteeing representation of minority groups within the central institutions of the larger state). It concludes with examples of each type from various countries, and explores some key differences between them regarding their institutional embodiment and constitutional protection.
Individual Rights and Collective Rights
Authors: Kymlicka Will
Published: October 2003

Investigates the connection between collective rights and individual rights, and challenges the liberal hypothesis that there is an inherent conflict between the two. It argues the need to distinguish between two meanings of ‘collective rights’, which can refer either to the right of a group to limit the liberties of members in the interest of group solidarity or purity (internal restrictions), or the right of a group to limit the powers of a majority to curtail the interests of minorities (external protections). It argues that the latter need not conflict with individual liberty, and indeed that what distinguishes a liberal theory of minority rights is precisely that it accepts some external protections for ethnic groups and national minorities while being very sceptical of internal restrictions.