Market Syndicalism and Market Imbalances
18 Pages Posted: 10 Apr 2011
Date Written: August 21, 1992
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.
Keywords: worker management, labor management, Yugoslavia, general equilibrium
JEL Classification: P40, E1, O1
Suggested Citation: Suggested Citation