ARNOLD KLING
August 14, 2011
The Top Political Contributors
August 11, 2011
Gender and the New Commanding Heights
August 11, 2011
Jamie Galbraith Makes an Assumption
August 11, 2011
Macroeconometrics: The Science of Hubris
August 10, 2011
Real and Nominal Bond Yields
BRYAN CAPLAN
August 14, 2011
The Effect of Thumb Sucking on Income
August 12, 2011
The Voice of Cold, Hard Truth to All Would-Be Educators
August 12, 2011
Ability, Morality, and Prosperity: A Paper and a Report
August 11, 2011
The Theory of Time and Frittering
August 10, 2011
Male Variance and the Remnants of the Gender Gap
DAVID HENDERSON
August 9, 2011
Hayek in "Unbroken", Part Two
August 8, 2011
Hayek in "Unbroken"
August 5, 2011
James Bovard on the Peace Corps
August 4, 2011
Summers Way Off on FDR and 1941
August 3, 2011
The "Amazon" Tax
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No need to buy a paper, the editorial is free today on Opinion Journal.
[Thanks. I've modified the original post to include both WSJ links: Opinion Journal and subscription.--Econlib. Ed.]
Here is the link: http://www.opinionjournal.com/
specific link:
http://www.opinionjournal.com/editorial/feature.html?id=110009068
This was a great article. I've been saying the same thing (not as eloquently, or with as much gravitas) as he did.
I'm intrigued to see how my favorite liberal - Matt Yglesias - will respond.
From the article;
"A tremendous confusion is created by associating "capitalism" with entrenched wealth and power."
Very good point.
Phelps might have used the Airbus fiasco as an example of the corporatist-Continental model and its current problems.
I don't know if I agree with the article's premise.
While there certainly is a lot of "co-determination" in Europe's largest companies, the smaller ones don't have it, and it is very unclear if innovation is stifled in either situation.
What is clear is that Continental Europe has a great deal of labor market regulation that keep less productive people from participating in the labor market at all. The unemployed are then supported by the state through labor taxes on the working (which in itself reduces the labor supply).
The result is double the unemployment and half the economic growth of the "Anglo-Saxon" system. But I don't see too many Europeans complaining.
Perhaps as the average living standards between Continental Europe and the Anglo-Saxon model countries grow, there will be enhanced concern by Europe to reform.
"What is clear is that Continental Europe has a great deal of labor market regulation that keep less productive people from participating in the labor market at all."
Continental Europe has a great deal of labor market regulation that make it difficult (indefinite contracts) to be removed from the ranks of the employed.
All very interesting considering that the article cites that Continental Europe's productivity and job satisfaction are lower than those of the workers in the United States.
What Phelps is saying is conventional wisdom but see how Germany has left the USA behind as the world largest exporter of goods and is a leader in engineering innovations.
What does being the world's largest exporter of goods have to do with anything? Surely you aren't positing that being a net exporter is correlated with having a healthy economy?