Ideas in Development

A deeply moral and religious man, a member of the Religious Society of Friends (Quakers), William Vickrey was also described as an “economist’s economist.” Winner of the Nobel Prize for Economics , Vickrey made major contributions in the areas of urban economics, transportation planning and costing, taxation, auctions, marginal cost pricing, social choice, game theory and macroeconomics. He was also a committed proponent of full employment. Unfortunately, dying but a few days after winning his Nobel, Vickrey missed his chance to use his international stature to further his goal of “chock-full employment”.

In my previous article, “In Appreciation of William Vickrey,” I told the story of Vickrey’s dedication to the goal of widened opportunities and presented a few of the elements of his policy agenda for providing livable wage jobs for all Americans. However, I did not present many specifics on how this would work on the ground.  For this entry, I would like to provide detail about a more current full employment proposal by Vickrey “disciple,” economist L. Randall Wray.

with Bridget Venne

What can be done by firms and their business associations to create better employment opportunities or to transform lousy jobs?

In this series of articles about the causes, consequences and cures of the loss of jobs that pay well and demand low- or moderate skills, we have focused only on what the government could do (along with its nonprofit and for-profit partners).  In other words, we have sought public policy solutions. 

However, in our view, the business community itself could do more to aid in the retention of family-wage and benefit jobs and, as a result, see higher productivity and lowered turnover.

A Book Review

MIT professor and expert on Asian economies, Alice Amsden, takes aim at different game in Escape from Empire: The Developing World’s Journey through Heaven and Hell: U.S. foreign economic policies.  Professor Amsden thinks that these policies have taken a turn for the worse.  In the recent past, she argues that the United States let other countries, unless they were communist or in danger of “going communist,” do their own thing.  (American-aided coups in places, such as Guatemala, Iran and Chile, were the response if you turned toward what U.S. policymakers regarded as the “Dark Side.”)  In general, however, the U.S. took a hands-off approach, offering aid and encouragement while putting some modest pressure on nations to lower tariffs or other traditional protectionist tools.   This practice allowed the Third World to explore scores of different economic development approaches, ranging from export promotion to import substitution, from state ownership to partnerships with Big Oil. 

Left-of-center policy wonks and the broader progressive community are quite excited about the effort, led by the Center for American Progress, to advocate for a national strategy to cut poverty in half.  The Center’s recent publication, From Poverty to Prosperity: Report and Recommendations of the CAP Task Force on Poverty, does a good job in articulating a strong rationale and describing an agenda for getting there.  Its 12-step program calls for:

1. Raising and indexing the minimum wage to half the average hourly wage;
2. Expanding the Earned Income Tax Credit and Child Tax Credit;
3. Promoting unionization by enacting the Employee Free Choice Act;
4. Guaranteeing child care assistance to low-income families and promoting early education for all;
5. Creating housing vouchers and promoting more equitable development in and around central cities;
6. Connecting disadvantaged and disconnected youth with school and work;
7. Simplifying and expanding Pell grants;
8. Helping former prisoners find stable employment and reintegrate into their communities;
9. Ensuring equity for low-wage workers in the Unemployment Insurance system;
10. Modernizing “safety net” benefits programs to obtain employment that provides a decent level of living;
11. Reducing the high costs of being poor by increasing access to mainstream consumer goods and financial services; and
12. Expanding and simplifying the Saver’s Credit to encourage saving for education, homeownership and retirement.

This week is “Green Economic Development” week at Ideas in Development, and in observance of such, Bill Schweke will be posting all week on the topic. Today, Bill begins with the first of a three-part series in which he recalls his days as CFED’s emissary to The Nature Conservancy on a project to create economic development opportunities on the Eastern Shore of Virginia, while preserving its pristine and sacred ecosystem…

Daniel J. Fiorino’s The New Environmental Regulation is an important book for environmentalists and economic developers.  Following in the footsteps of James Boyd (Resources for the Future), Peter Barnes (author of Skytrust), Malcolm Sparrow (Kennedy School), Archon Fung (Kennedy School) and Daniel Esty (author of Green to Gold), Fiorino seeks to demonstrate that the United States has accomplished all the environmental protection that it can with its traditional approaches to regulation.