Flexicurity Capitalism

Flaschel and Griener's Flexicurity Capitalism provides serious discussion and feasible mathematical models to provide a basic framework for a "flexicurity" economic system--labor market reform that combines flexibility in the hiring and firing processes of firms with security in the employment and income of the workforce.

Notation ; Introduction ; 1 Marx: Socially Acceptable Capitalism? ; 1.1 Introduction ; 1.2 Theminimum wage debate ; 1.3 Sustainable social evolution through an unrestricted reserve army mechanism? ; 1.4 Classical growth dynamics ; 1.5 Hiring and firing, social security and restricted reserve army fluctuations ; 1.5.1 Human rights: Basic income and minimum wages ; 1.5.2 Capital's and labor's responsibility: Minimum wages and basic income ; needs ; 1.5.3 Capital's and labor's responsibility: Upper bounds for real wage increases ; 1.5.4 Automatic stabilizers: Blanchard and Katz error correction terms ; 1.6 Conclusions ; Appendix: Wage dynamics. A specific theoretical foundation ; 2 Kalecki: Full Employment Welfare Capitalism? ; 2.1 Introduction ; 2.2 Economic and political aspects of full employment ; 2.3 Themodel ; 2.4 The implied laws ofmotion ; 2.4.1 The DADmodule: multiplier and employment dynamics ; 2.4.2 The DAS module: real wage dynamic and capital accumulation ; 2.5 Steady state configurations and reduced-form3D dynamics ; 2.5.1 Balanced growth in the 4D dynamics ; 2.5.2 Reduced-form3D dynamics ; 2.6 Feedback structures ; 2.6.1 Feedback channels in KMGS growth ; 2.6.2 The feedback structure of the KGR model of capital accumulation ; and employment dynamics ; 2.6.3 A feedback-suggested local stability scenario ; 2.6.4 Consensus-based economies: Attraction towards accepted steady ; state positions ; 2.7 Local instability and global boundedness ; 2.7.1 Conflict-driven economies: Repelling steady state configurations ; 2.7.2 Kalecki-type upper turning points ; 2.7.3 Goodwin-type upper turning points? ; 2.7.4 Rose-type lower turning points ; 2.7.5 Goodwin-type lower turning points? ; 2.8 Numerical examples ; 2.9 Political aspects of the Kaleckian investment and employment cycle ; 2.9.1 Monetary policy ; 2.9.2 Fiscal policy ; 2.10 Conclusions ; 3 Schumpeter: Capitalism, Flexicurity and Democracy? ; 3.1 Introduction ; 3.2 From Marxian reserve army to Schumpeter's competitive socialism and beyond ; 3.3 Flexicurity capitalism: budget equations, consumption and investment ; 3.3.1 Full-employment capitalism: Ideal, status-quo and compromises ; 3.3.2 Basic principles and problems ; 3.3.3 Sectoral accounts, consumption and investment ; 3.4 Dynamics: Stability and sustainability issues ; 3.4.1 Stability of balanced reproduction ; 3.4.2 Sustainability of balanced reproduction ; 3.5 Pension funds and credit ; 3.6 Education and schooling ; 3.6.1 The educational system: Basic structure and implications ; 3.6.2 Equal opportunities and life-long learning ; 3.7 Challenge I: Keynesian business fluctuations ; 3.8 Challenge II: Schumpeterian processes of 'creative destruction' ; 3.9 The future of capitalism: A brief appraisal ; 3.10 Elites in flexicurity societies ; 3.10.1 Basic aspects ; 3.10.2 Elite groups and areas of operation ; 3.10.3 Education: Foundation for administrative authority and social behavior ; 3.10.4 Career advancement and decent paths ; 3.10.5 Preferences, incentives and responsibilities ; 3.10.6 Elite failures ; 3.10.7 The remuneration of elites under flexicurity: A baseline proposal ; 3.10.8 A summing up ; 3.11 Price formation: Time dependent markup pricing around long-period prices ; of production ; 3.12 Conclusions and outlook ; Appendix 1: Stability of Balanced Reproduction ; Appendix 2: Sustainability of Balanced Reproduction ; 4 Unleashed Capitalism: The Starting Point for Societal Reform ; 4.1 Introduction ; 4.2 Real disequilibria, balanced portfolios and the real-financial markets interaction ; 4.3 A portfolio approach to KMG growth dynamics ; 4.3.1 Households ; 4.3.2 Firms ; 4.3.3 Fiscal and monetary authorities ; 4.3.4 The wage-price spiral ; 4.3.5 Capital markets: Gross substitutes and stability ; 4.3.6 Cumulative processes in capital gains expectations: Chartists' behavior251 ; 4.4 A baseline stability scenario ; 4.5 Likely outcomes of unleashed capitalism: Local instability and regime-switch ; induced viability ; 4.6 A further risk-bearing asset: Long-termbonds ; 4.6.1 Intensive form ; 4.6.2 Steady state ; 4.6.3 Comparative statics ; 4.6.4 Stability ; 4.6.5 Summary ; 4.7 Interest rate policy in the KMG portfolio approach ; 4.8 Conclusion ; 5 Conclusions ; Mathematical Appendix: Stability Theorems ; Notes ; References ; Index