I concur entirely with Tom Walker's point on the false objectivity of the
term "rationalization", and stand corrected on the newly introduced
question of its usage. Indeed, downsizing of workforces is often far from
"rational"--so, incidentally, is a wide range of other company
decisionmaking, ranging from investments to marketing to regulatory
response. Here we might actually wish to draw considerably more radical
conclusions than working less hours for managers making such
decisions--indeed, why not replace them with workers, or even in certain
sectors (heresy of heresies!) with elected public representatives?
However, I fail to see why we should imitate managerial laziness in
estimating the effects of downsizing by failing to estimate the effects of
the diverging policies we may advocate. Whatever we think of downsizing,
it remains incumbent upon us to control for (e.g.!) this trend in assessing
our policy response. It is indeed curiously inconsistent to first argue
that employers badly misconstrue the costs they try to minimize, only to
then argue that the costs are so incontrovertible that we should reduce
working time and/or taxes to take these re-objectivized costs into account.
If managers can't count as is, why should we expect them to tote up the
value of tax breaks and part-timing we offer them (and choose the deal
offered) in the ways we assume they will? If the projected net change in
unemployment resulting from such measures is not significant, I would
certainly object to such inefficient largesse for companies--not least as a
taxpayer. In that case, there may be better arguments for using tax money
otherwise--for example, in direct job creation in the public sector.
In any case, the rhetorical flak in this latest debate blitz still appears
to be way off the primary target: the issue of how cost effective cuts in
working time and/or taxes are actually likely to be in cutting
unemployment, given other ongoing social and economic changes (which may
require their own empirically grounded policy responses!) As long as we
don't address such issues, our policy advocacy is a mere mirror image of
uncritical argumentation for the status quo.
It appears necessary to add that I am similarily skeptical on the effects
of many (if far from all) labour market policy prescriptions grounded in
economic theory, such as those recently elaborated by Gavin Cameron. To
me, many of them are too focused on presumed behaviour of the unemployed
and of unions instead of on the characteristics of labour markets (internal
and otherwise), hiring procedures, employers, and policy-making bodies. To
exemplify a bit bluntly, I don't think it makes much difference how hard
people search for work if central banks with a bad case of inflation
paranoia keep taking the wind out of everyone's sails by raising interest
rates. But I can certainly agree with Gavin on the desirability of judging
policy proposals by evidence on their likely effective- ness. At this
task, I'd have to insist, this list's advocates of cuts in working time
and/or taxes as a policy against unemployment appear thus far to have failed.
best regards,
Eero C.
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