weekly quote #26: Samuel Bowles April 29, 2008
Posted by ocmpoma in : economics , trackbackI’m continuing to work my way through Samuel Bowles’s Microeconomics, which was the source of last week’s quote. In my humble opinion, especially given my own idiosyncratic interests in certain particular aspects of economics and behavior and the detached arguments of the Ayn Rand school of thought, this one (page 268 of my copy, from chapter 8, with citation of Coase’s “The institutional structure of production” in the original) is even better. It summarizes a description of an employee-employer contractual relationship that takes into account the realities of human interaction:
“There are three basic ingredients of a more adequate model. The first is the insight of Ronald Coase, mentioned at the close of chapter 7, that “what are traded on the market are not, as is often supposed by economists, physical entities, but the rights to perform certain actions.” The second is Marx’s commonplace that exchange requires the owners of the productive services to interact face to face. The third is Henry Ford’s discovery that employees may reciprocate good pay with hard work.”
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