ON CHOICE IN LABOR MARKETS
1. Classical theory: "Every man" will pursue
his interest and therefore seek the advantageous employment. This will
cause disadvantageous employment to need workers and therefore rise to
parity with advantageous employment.
NOTE: Not just wages but the whole of advantageous and
2. Empiricists' criticisms: 1) wage difference plays very
small role; 2) workers often ignorant of job alternatives; 3) workers value
security highly; 4) workers do not seem to calculate net advantages or
act rationally in choosing jobs. Empiricists claim Rottenberg tautology
and statements can't be refuted empirically because untestable. Because
how can subjective net advantages be objectively measured.
3. Empiricists have verifiable predictions but derived
inductively from observations and lack capacity for general use, which
is properly derived from theoretical systems. Economics as analytical system
can only predict consequences of policy, not choose best policy. (Lampman
said the same.) Says core of Lampman criticism: are predictions of classical
verifiable? Many derived predictions are unverifiable but claims Lampman
overselective in just choosing those predictions which are unverifiable.
Goes into logically consequential though not verifiable.
4. Lampman's criticisms are valid: You can't discredit
one convention by establishing another as useful says both R. and empiricists
did this. Says argument unfruitful.
5. Who got best: Lampman because tries to point way to
positive theory and prediction.
6. Rottenberg answered by changing questions to those
he could answer, so no.
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