Formal Theoretical Evidence that there exists a Fully Capitalist (Capability Approach) Fiscal Policy that supports Full Employment and Enhances Competitive Equilibriums

Abstract

Suppose an unemployed agent engages with an involuntary relocation decision whenever the agent accepts a job that pays less than the agent's pre-dislocation wage. Suppose, in exchange for job offers to the selfsame unemployed agent, that a government program makes available transfer payments from a mathematically specified `Society-wide Innovation Incentivization Mechanism (SIIM)' to firms that hire for the agent's pre-dislocation role. Further, so long as all of the unemployed are placed, suppose firms that self identify as competitors to the hiring firms need not hire any of the unemployed in order to participate in the SIIM. With the transfer payments that are facilitated by the SIIM increasing and concave in firms' productivity, the SIIM attains to a Pareto optimal socioeconomic rule at costs that are within the fiscal capacity of an economy. The SIIM facilitates a Capability (Anthropocentric) Approach to the management of full employment and Pareto optimizes competitive efficiency.  

Keywords: Society-wide (Social) Innovation Incentive Mechanism, Unemployment, Transfer Payments, Fiscal Policy, Welfare, Pareto Efficient Competition