Arne Heise

The Political Economy of Meritocracy: A Post-Kaleckian, Post-Olsonian Approach to Unemployment and Income Inequality in Modern Varieties of Capitalism

The “big trade-off,” described by Arthur Okun some thirty years ago, is back again: equality or efficiency, or to put it differently, modern highly developed economies and societies have to choose between the Scylla of income inequality and the Charybdis of unemployment. Furthermore, it looks like the continental European economies—foremost Germany and France—sided with more egalitarian ends accepting higher unemployment while the liberal economies such as the United States and the United Kingdom chose higher inequality for lower unemployment. In this paper it is argued that the trade-off is not a supply-side necessity to maintain work effort in a situation of incomplete contracts, but is a politico-economic issue of particular interest groups seeking rents. However, unlike in Mancur Olsons seminal approach, it is not the trade unions that are forming distributional coalitions on the labor market, but rather the meritocracy which is happy to use Keynesian-type demand management to advance their material interests by pursuing a “meritocratically optimal rate of unemployment” (MORU).

Employment in host regions and foreign direct investment

This paper examines the relationship between foreign direct investment inflows and employment using international business strategy literature to identify the factors influencing the development of subsidiaries that might affect employment growth in host regions. A survey of German subsidiaries in North West England is used to test the significance of the variables that are identified as likely to affect employment. The results of logit regression indicate that entry mode, technology transfer, and firm age affect the growth of employment. The study also highlights that other factors, such as sector, organisational structure, the level of diversification of operations by subsidiaries in the local economy, and range of markets supplied may have important affects on employment. The research indicates that further conceptual and empirical work is required to clarify our understanding of how the organisational, operational, and diversification characteristics of subsidiaries affect employment.

Foreign direct investment and employment in host regions

Investigates the role of direct foreign investment (DFI) in promoting employment in host regions in the European Union (EU). A theoretical framework is developed which suggests that the initial impact of DFI on employment is likely to be small and mainly linked to the creation of low skilled jobs with the loss of employment in host economies due to the displacement of domestic output by increased exports from the parent companies of subsidiaries. However, in the longer term, DFI flows should diversify the operations of subsidiaries thereby inducing a change in the pattern of jobs in host regions. The framework is assessed using evidence from a survey of German subsidiaries in north‐west England. Concludes with some policy implications and a future research agenda to expand and develop knowledge in this area.

Has Germany Been Europeanised or Has Europe Become (too) Germanic

It has often been argued that European monetary unification must basically be seen as a device to Europeanise re-unified Germany. For the Germans it seemed to be the best possible way to prevent a German “Sonderweg” and end any German ambition for hegemony. For the rest of Europe, and particularly France, it seemed to be the best way to curb German monetary dominance and to secure a French imprint on EU policy-making. In this article, however, it is argued that the German impact on the economic governance regime of EMU and its fencing off the French proposal of a “gouvernement economique” is so substantial that the term “Germanic Europe” seems in fact to be appropriate. More importantly, the economic governance system of “Germanic Europe” has locked the European Union into a politics of disinflation which makes it difficult for the EU to prosper and reap the potential fruits of European integration.

Central banks, trade unions, and reputationâis there room for an expansionist maneuver in the European Union?

It is now a few years since the introduction of the common currency, and Europe is still experiencing high unemployment. The conventional logic attributes this problem to flaws in the labor market. In this paper, we look at the changes that occur if trade unions and the central bank have different options to choose from in a climate of uncertainty. In a single-stage game, the most probable outcome is a high unemployment rate. Results change dramatically if the game is repeated. However, this effect does not occur if the central bank puts a too high weight on price stability.

The Short Rise and Long Fall of Heterodox Economics in Germany After the 1970s: Explorations in a Scientific Field of Power and Struggle

Abstract: In the context of ongoing criticisms of the lack of pluralism in economics, we discuss the development of “heterodox” economics since the 1970s in Germany. Following Imre Lakatos’s concept of scientific research programs (SRP), we examine some classifications of economics, specifying the understanding of diversity in light of the “axiomatic variations” of mainstream economics. This forms the basis for our subsequent description of the development of heterodoxy in Germany, with special reference to the founding of new universities and the reform movements in the 1970s. We show that the heterodox scene flourished in this period, but that this pluralization remained fragmented and short-lived, so that by the 1980s heterodoxy was on its way to becoming marginalized again. The history of heterodoxy in Germany thus presents itself as an unequal “battle of the paradigms,” and can only be told as a story of failure.

The Future of Economics in a Lakatos–Bourdieu Framework.

Abstract: The global financial crisis has clearly been a matter of great consternation for the business-as-usual faction of mainstream economics. Will the World Financial Crisis turn out to be that experimentum crucis that triggered a scientific revolution? In this article, we seek to assess the likelihood of a paradigm shift toward heterodox approaches and a more pluralist setting in economics emerging from the academic establishment in the United States—that is, from the dominant center of knowledge production in the economic discipline. This will be done by building the analysis on a combined Lakatosian framework of “battle of research programs” and a Bourdieuian framework of “power struggle” within the academic field and highlighting the likelihood of two main proponents of the mainstream elite to become the promulgator of change.

Arbeitslosigkeit und Ungleichheit in verschiedenen Kapitalismusmodellen

Der ‘Big Trade Off’, den Arthur Okun schon vor uber dreisig Jahren formulierte, ist zuruck. Okonomische Effizienz und soziale Gleichheit erscheinen unvereinbar. Oder anders: Moderne Gesellschaften mussen sich zwischen der Scylla hoher Einkommensungleichheit oder der Charybdis von Arbeitslosigkeit entscheiden. Und es sieht so aus, als ob sich die kontinentaleuropaischen Lander wie Frankreich und Deutschland fur hohere Einkommensgleichheit und Arbeitslosigkeit entschieden hatten, wahrend die liberalen Okonomien Grosbritanniens und der USA sich fur grosere Einkommensungleichheit und einen hoheren Beschaftigungsstand entschieden hatten. In dieser Arbeit wird argumentiert, dass der Trade Off keineswegs eine angebotspolitische Notwendigkeit zur Aufrechterhaltung der Leistungsbereitschaft der Arbeitnehmer ist, sondern politokonomisch gedeutet werden kann als das Ergebnis von ‚Rent seeking‘-Verhalten. Doch im Gegensatz zu dem bahnbrechenden Werk von Mancur Olson sind es nicht die Gewerkschaften, die eine Verteilungskoalition bilden, sondern vielmehr die Leistungselite, die mittels fehlgesteuertem Demand management eine meritokratisch-optimale Arbeitslosigkeit ansteuern, um ihre Verteilungsinteressen durchzusetzen.

Growth engines of the south? South Africa, Brazil and Turkey in comparison

South Africa, Brazil and Turkey (SABT) are among those countries that not only to continue to converge towards the per-capita income levels of highly developed nations but also to be the best candidates next to China and India of serving as the locomotives of world GDP and trade growth after the depression. Therefore, it appears interesting to inquire into the macroeconomic governance structures of SABT in order to assess their capabilities for enhancing growth and employment. This will be done on the basis of a Post-Keynesian policy model of market constellations comprising of institutionally embedded macro-economic policy regimes.

Universitätsentwicklung und Rahmenbedingungen

Nachstehend wird die Universitatsentwicklung in Deutschland einschlieslich der Rahmenbedingungen skizziert, soweit dies im Rahmen dieser Arbeit notwendig erschien. Fur das historische Verstandnis wird dazu anfanglich auch auf die Entwicklungen ab Etablierung der Universitaten im 19. Jahrhundert Bezug genommen.