At 08:46 AM 10/23/98 -0700, Tom wrote: >... In _Created Unequal_, Jamie Galbraith analyzed the conceptual incoherence of NAIRU and demonstrated its empirical irrelevance. It's not the first time that NAIRU concept has been deconstructed, but it is a very well reasoned and clear discussion. Galbraith noted that Milton Friedman seemed sufficiently uneasy about the macro-economic explanation of NAIRU that he felt it necessary to supplement it with a micro-economic explanation.< It's a good critique of the MF's NAIRU (or what the MF unscientifically calls the "natural rate of unemployment" as if there were anything natural about the economy). However, I don't see Jamie as dealing with other theories of the NAIRU. Put another way, he doesn't look for the "rational core" in the midst of the MF's almost-totally ideological conceptions. An alternative NAIRU can be seen, for example, in Wendy Carlin and David Soskice's book _Macroeconomics and the wage bargain: a modern approach to employment, inflation, and the exchange rate_ (1990). This book presents a bargaining power/conflict theory of inflation (in a formal way) that includes a NAIRU under certain circumstances but not all. It has been unjustly ignored. (One nice touch is that the MF's theory is treated as a special case.) In simpler terms, the NAIRU can be seen as reflecting the Marxian reserve army of labor: if the unemployment rate is "too low" from a capitalist perspective, profits are squeezed. One response to this is for the bosses to raise prices, which can become a self-feeding process if it persists, causing accelerating inflation. This theory thus has exactly the same implication as the NAIRU theory: low U means accelerating inflaiton, because there's not enough "bargaining power" unemployment (from a capitalist perspective). Since the capitalists have the whip-hand in the economy, they punish us with accelerating inflation. The Soskice/Carlin theory also helps explain why the NAIRU has clearly fallen in recent years in the US: workers' institutional bargaining power has taken a dive, so that less of a reserve army is needed. (There's more going on, but work calls...) >On this list a few days ago, Michael Yates mentioned the management slogan of Kaizen. It's reasonable to pose Kaizen as emblematic of a raft of management slogans about workplace reorganization: Total Quality Management, Business Process Re-engineering, Just-in-Time manufacturing -- even the hoary granddaddy of them all, Taylorism. This is not to say Kaizen is identical to Taylorism, simply that it is a related concept.< you're absolutely right! >Is there anyone on this list who ever read Harry Braverman's _Labor and Monopoly Capital_? Anyone who participated in or followed the debate in the subsequent years about the adequacy of Braverman's concept of de-skilling? ....< moi. Deskilling makes total sense on the micro level, as capitalists apply it to existing production processes. But the rise of new processes and the education system help prevent it from always working on the macro level. >Actually, what I'm suggesting goes further than that. It would not be possible for a coherent NAIRU to coexist in the same world with a coherent KAIZEN. ...< Right. If Taylorism (Kaizen, etc.) were applied completely, all workers would be interchangeable parts with zero bargaining power (breathing robots). No bargaining-power unemployment (reserve army) would be needed, though we might see MF-type structural (mismatch) and frictional (search) unemployment. in pen-l solidarity, Jim Devine [EMAIL PROTECTED] & http://clawww.lmu.edu/Departments/ECON/jdevine.html
