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This essay surveys economic thought in Britain and the United States to assess the influence that economists have had on developments in the marketplace and in government (and also to show reverse causation; economic thinking is less free of historical circumstances than economists appreciate). Next it examines whether recent Anglo-American developments are reproducing themselves in other parts of the world, that is, whether we see synchronous swings from status to contract in continental Europe and Japan. Finally, the essay asks what the future holds in store for labor and employment policy: will we see a continued pulsing of Polanyi's double movement or a triumph of the liberal Anglo-American model?
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... Also, as used in this chapter " Wisconsin " and " Chicago " are best regarded as metaphors or allegorical symbols for two broader constructs, IEIR and FL&EM on one hand and NE and SL&EM on the other, that now extend far beyond their original home bases. The qualifier " in the USA " is also important since the IEIR and NE traditions discussed here, along with their parallel labor law traditions, are in a number of respects distinctively American products (Jacoby 2005). Finally, the term " labor law " is used in the expansive sense of covering collective and individual dimensions, the latter sometimes separately distinguished as employment law. ...
... In this section I take a deeper look at the role and significance of the " assume a competitive labor market " theme in the second L&E movement --where " competitive " is defined broadly to include efficient contract generalizations. The effective birth date of both IEIR and NE is the 1880s (Blaug 1985; Hovenkamp 1990; Jacoby 2005). The marginal revolution had begun in the 1870s in the work of Jevons, Menger and Walras and by the 1880s had mostly displaced the classical approach of Malthus, Ricardo, and Marx. ...
... The FL&EM has its roots in the 1880s and was much inspired by the HSE type of economics done in late nineteenth century Germany (Hovenkamp 1990; Pearson; Jacoby 2005); in the labor area it was also closely linked with the creation of the International Labor Organization (ILO) at the end of World War I (Kaufman 2004). The beginnings of industrialization brought with it numerous employment problems, mounting strikes and capitallabor conflict, and the rise of radical trade unions and socialist political parties. ...
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In the twentieth century two intellectual traditions were the most influential in the American field of labor economics. The first was the tradition of institutional economics (IE) and its close offshoot industrial relations (IR), the second was the tradition of neoclassical economics (NE). This cleavage is refracted into the modern field of labor law where on one side is an IEIR-oriented traditional approach to labor law (e.g., Deakin and Wilkinson 2005; Estlund 2006; Arthurs 2007) and, on the other, a largely NE-inspired law and economics (L&E) approach (Schwab 1997; Posner 2007; Medema 2010).
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