Economic Thought

Economic Thought, 2019

This paper seeks to examine the relationship and the interaction between institutions, policy and the labour market in the light of the ideas of the first generation of institutional economists, who, in contrast to neoclassicals, conceived of the economy as a nexus of institutions, underlining, therefore, the significant role of institutional and non-market factors in the functioning of an economic system. They also criticised those who define (economic) welfare only in terms of efficiency and satisfaction of consumer interests; institutionalists instead focus on issues related to justice, human self-development and labourers' welfare. In addition, early institutionalists paid considerable attention to the institutional framework of the labour market. In particular, the first generation of institutional economists highlighted the importance of institutions and other non-market parameters in determining the level of wages and employment (e.g. the role of the bargaining power of w...

Routledge eBooks, 2023

The significant role of institutional and non-market factors in the functioning of an economic system was a core theme of the old institutional economists. They also criticised the narrow conception of economic welfare only in terms of efficiency and satisfaction of consumer interests. Instead, they focused on issues related to justice, human self-development and labourers' welfare. Their conception of the labour market functions is an indicative example of the uniqueness of their approach. In contrast to the standard approach, labour market functioning does not depend only on the price mechanism, but is also affected by other key factors and parameters such as the social norms, several psychological factors and various labour institutions. This chapter seeks to examine and highlight the contribution of the old institutional economics towards labour market functions and policies. After presenting the origins and method of the School, it briefly compares old Institutionalism and early Neoclassical economics focusing on labour market issues. It also discusses the old institutional approach with respect to the collective action and labour market policy. The chapter concludes with Ross-Dunlop debate on labour unions and the case of minimum wages policy in order to emphasize the relevance of early institutional ideas in analysing contemporary labour market issues.

The growing role of institutions and their influence on the labour market outcomes, i.e. wage rates and labour allocation, has been among the most significant characteristic features of labour markets in recent decades. Labour market economics built its paradigm on the principles of marginalism, which brought suitable instruments for analysis of market agentsíndividual decisions capable of achieving effective solutions. Smith´s " invisible hand " has gradually been limited by institutional interventions – by governments, corporations and trade unions with government legislation, corporate personnel policies and collective bargaining. The expanding regulatory interventions into the labour market and the effort to explain the reality leads inevitably to the fact that modern labour market economics incorporates more and more institutional theories. The contribution outlines the gradual invasion of neoinstitutional topics and theories into the neoclassical labour market paradigm and it analyses the differences in the neoclassical and neoinstitutional interpretation of labour markets' functioning. The recent discussion on the consequences for labour market economics theory is presented. A conclusion about the gradual direction towards a changed paradigm of labour market economics is presented.

Comparative Employment Systems, 2014

This article explicitly deals with and scrutinises what can be perceived to be the core analytical issues and methodological concepts of new institutional economics. New institutionalism seeks to explain not just the origins and evolution of institutions of capitalism, but more generally the scope of the theory is supposed to be universally applicable. Granted this, new institutionalists often interpret the historical emergence and evolution of institutions in abstract logical terms. This is because of the static, timeless, ahistorical and asocial nature of marginalism and neoclassical equilibrium analysis used by new institutionalists. Hence, an attempt is made to propose certain methodological and theoretical premises that can pave the way for the construction of an alternative, qualified theory of institutional arrangements. In this vein, the issues of social structure, social relations, power and conflict come to central stage.

2018

This article explicitly deals with and scrutinises what can be perceived to be the core analytical issues and methodological concepts of new institutional economics. New institutionalism seeks to explain not just the origins and evolution of institutions of capitalism, but more generally the scope of the theory is supposed to be universally applicable. Granted this, new institutionalists often interpret the historical emergence and evolution of institutions in abstract logical terms. This is because of the static, timeless, ahistorical and asocial nature of marginalism and neoclassical equilibrium analysis used by new institutionalists. Hence, an attempt is made to propose certain methodological and theoretical premises that can pave the way for the construction of an alternative, qualified theory of institutional arrangements. In this vein, the issues of social structure, social relations, power and conflict come to central stage.

Journal of Industrial Relations, 1998

Forum for Social Economics, 2014

This post-disciplinary article goes beyond orthodox labour economics and combines insights from the 'socio-economics of labour markets' (SELM), and critical realism (CR), to develop a SELM CR perspective which is then used to create an alternative conception of labour market institutions and an alternative model of labour markets-i.e. the SELM CR model.

Social Science Research Network, 2006

The labour market is both a market and a "social institution". But what do we mean by that? In the first part of this article we analyse different interpretations of the labour market's "social" dimension, starting with the versions postulated by economists and ending with those that invoke solidarity as a criterion. In the second part, we analyse the functions of the institutions that embody the labour market's social dimension, both from the positive viewpoint-correcting market failures-and the negative viewpoint-creating and capturing rents. Discussion of the factors that explain how these institutions come into being and evolve allows us to identify a number of institutions that perform a dual function: correcting market failures, and also correcting failures in other institutions.