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Disciplinary Unemployment as a Public Good, or the Importance of the Committee to Manage the Common Affairs of the Whole Bourgeoisie

Department of Economics and Center for Public Policy and Administration, Thompson Hall, University of Massachusetts, Amherst, MA 01003mash{at}econs.umass.edu

Unemployment disciplines workers and reduces the wage that firms must pay to prevent shirking. Equilibrium unemployment is too low from the perspective of the profit-maximizing firm because each firm fails to account for the reduction in unemployment imposed by its own hiring. An executive committee for macroeconomic policy can provide discipline as a public good by maintaining higher unemployment to increase collective profits.

Key Words: unemployment • labor force • macroeconomic policy

Review of Radical Political Economics, Vol. 37, No. 4, 471-475 (2005)
DOI: 10.1177/0486613405280800


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