Market Syndicalism and Market Imbalances

Abstract:     
The endogenous relationship between income-per-worker (Y) and product price (E’) under labor management or, more broadly, market syndicalism, causes P to play a critical role in clearing product and labor markets. The level of P that clears the product market, however, may differ from the level of P required for the labor market to clear. Since only one value of P can prevail at a time, clearing of the product market does not ensure clearing of the labor market, and vice versa. The analysis of divergent equilibria is extended to include government. Tax/subsidy instruments can be used to achieve general equilibrium in a syndicalist economy, but resulting fiscal imbalances may require additional forms of intervention.

Number of Pages in PDF File: 18

Keywords: worker management, labor management, Yugoslavia, general equilibrium

JEL Classification: P40, E1, O1

Accepted Paper Series