Well-Functioning Economy
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A Well-Functioning Economy is an economic system that is a well-functioning system.
- AKA: Healthy Economy.
- Context:
- It can range from being a Failed Market-Organized Economy to being a Failed Hybrid Economy to being a Failed State-Organized Economy.
- …
- Counter-Example(s):
- See: Economy, System.
References
References
2014
- (Freeman, 2014) ⇒ Richard B. Freeman. (2014). “Who Owns the Robots Rules the World.” In: IZA World of Labor Journal, May.
- QUOTE: Employment, however, is just one side of the labor market calculus. What happens to wages is also important to well-being. If robots take the good jobs at high pay and humans get the low-pay leftovers, the living standards of persons dependent on labor income will fall. In such a scenario, Luddite fears would appear more realistic than assurances that comparative advantage guarantees work for all in a well-functioning economy.
But economics has a response to this danger. Herbert Simon’s 1965 analysis of technological change showed that, in a well-functioning market economy, labor gains from labor-saving and capital-saving technologies — as long as the labor supply curve is less elastic than the capital supply curve.
- QUOTE: Employment, however, is just one side of the labor market calculus. What happens to wages is also important to well-being. If robots take the good jobs at high pay and humans get the low-pay leftovers, the living standards of persons dependent on labor income will fall. In such a scenario, Luddite fears would appear more realistic than assurances that comparative advantage guarantees work for all in a well-functioning economy.