Robots and us: towards an economics of the ‘Good Life’

(Expected) adverse effects of the ‘ICT Revolution’ on work and opportunities for individuals to use and develop their capacities give a new impetus to the debate on the societal implications of technology and raise questions regarding the ‘responsibility’ of research and innovation (RRI) and the possibility of achieving ‘inclusive and sustainable society’. However, missing in this debate is an examination of a possible conflict between the quest for ‘inclusive and sustainable society’ and conventional economic principles guiding capital allocation (including the funding of research and innovation). We propose that such conflict can be resolved by re-examining the nature and purpose of capital, and by recognising mainstream economics’ utilitarian foundations as an unduly restrictive subset of a wider Aristotelian understanding of choice

Technology, demand and distribution: a cumulative growth model with an application to the Dutch productivity growth slowdown

This paper argues that the case for real wage growth restraint, and the consequent restoration of profitability, which the mainstream consensus regards as a necessary condition for sustained output and productivity growth, is based on weak foundations, because it neglects the negative impact of wage moderation on productivity growth. Using a general Keynesian growth model, which integrates a (wage-led or profit-led) demand regime and a productivity regime (incorporating the productivity-growth enhancing effects of higher demand and higher real wages), the conditions are identified under which real wage restraint fails to raise output and productivity growth. The model is applied empirically to the Netherlands (1960--2000). Copyright 2006, Oxford University Press.

It is high time to ditch the NAIRU

According to the mainstream theory of equilibrium unemployment, persistent unemployment is caused (mainly) by "excessive" labor market regulation, whereas aggregate demand, capital accumulation, and technological progress have no lasting effect on unemployment. We argue that the mainstream nonaccelerating inflation rate of unemployment (NAIRU) model is only a special case of a general model of equilibrium unemployment, in which aggregate demand, investment, and endogenous technological progress have long-term effects. It follows that the labor market policy prescriptions (i.e., to drastically deregulate), following from the standard NAIRU model, can by no means be generalized. Empirical support for the general model is provided by an econometric analysis for 20 Organization for Economic Cooperation and Development (OECD) countries (1984-97): demand factors are the overriding determinants of structural unemployment in the OECD.demand-led growth, endogenous technological progress, equilibrium unemployment, Kaldor-Verdoorn relation, NAIRU,

Flexible Labour, Firm Performance and the Dutch Job Creation Miracle

Unlike internal ('functional') forms of flexibility of labour, external ('numerical') forms of flexibility (i.e. high shares of people on temporary contract or a high turnover of personnel) yield substantial savings on a firm's wage bill. Savings on wage bills lead to higher job growth, but do not translate into higher sales growth. Externally flexible labour appears to be related to lower labour productivity growth, the effects being different for innovating vs non-innovating firms. We discuss these findings from firm-level and worker-level data against the background of the Dutch job creation miracle during the 1980s and 1990s. Modest wage increases and flexibilization of labour markets may indeed create lots of jobs. However, this is likely to happen at the expense of labour productivity growth, raising serious doubts about the long-run sustainability of a low-productivity-high-employment growth path.Flexible labour, determinants of labour productivity growth, wage costs, firm growth and employment,