Loss and Risk
In social science and humanities academe, and in much of the wider Left - even amongst those who would not describe themselves as any sort of Marxist - the base economic intuitions and presumptions are quasi-Marxian. Either because they were the only economics they have been directly exposed to or as pervasive contagion effect. The legacy of Marxism simply has no strong developed competitor. Particularly in milieus that use the term neoliberal as an exercise in moral and intellectual distancing from market-based economics.
There are many problems with Marxist economics, but two basic ones are loss and risk. If profit is exploitation, then presumably making a loss is generosity. The basic Marxist schema simply does not handle risk seriously. Consequently, it does not handle loss seriously.
Which is a major difficulty, for risk and uncertainty are basic features of commerce. Much of how commerce happens are attempts to deal with risk and uncertainty. (Not always successfully, hence loss.) But if your underlying intellectual presumptions fail to acknowledge that risk and uncertainty are basic factors in how commerce works, you have major analytical problems.
Consider laws making it hard to sack people. They raise the risk of employing people. With predictable effects. The smaller the business, the greater the risk - hiring the wrong person can literally destroy a business. If one raises the risk of something without compensating benefits, people will do it less. So the first consequence is fewer jobs are offered than otherwise would be. And its cost small business particularly notices.
One way of avoiding the increased risk is to not hire folk. There are other ways to reduce the risk. Insist on higher qualifications. Be more picky about job history. Use more reliable intermediaries - those with some ongoing relationship with you, so you can judge them better and they are risking something themselves. Pick people it is easier for you to “read” (that is, people within your own cultural/social group).
All these expedients will be used, which makes the effects of the law hard to empirically demonstrate. Particularly amongst all the other factors bearing on the labour market.
Now, obviously laws making it hard to sack folk protect job incumbents. But they do at a cost. A cost that will fall disproportionately on the less educated (having fewer certifications), the young (with less employment history), the marginally attached to the labour market (with fewer networks) and the culturally different. In Australia, laws making it harder to sack folk can just about be labelled the let’s really screw over young Aborigines laws. Of course, labour regulations to protect job incumbents have a history of screwing over Aborigines - most notoriously, in the Stockman Case.
France has very restrictive laws on sacking folk: they are let’s really screw over young Muslim males from the banlieue laws. Young Muslim males from the banlieue notoriously having high unemployment rates.
Yet such laws “seem” so fair, generous and compassionate. Particularly if your base economic presumptions don’t really grapple with risk, uncertainty and loss.
There are many problems with Marxist economics, but two basic ones are loss and risk. If profit is exploitation, then presumably making a loss is generosity. The basic Marxist schema simply does not handle risk seriously. Consequently, it does not handle loss seriously.
Which is a major difficulty, for risk and uncertainty are basic features of commerce. Much of how commerce happens are attempts to deal with risk and uncertainty. (Not always successfully, hence loss.) But if your underlying intellectual presumptions fail to acknowledge that risk and uncertainty are basic factors in how commerce works, you have major analytical problems.
Consider laws making it hard to sack people. They raise the risk of employing people. With predictable effects. The smaller the business, the greater the risk - hiring the wrong person can literally destroy a business. If one raises the risk of something without compensating benefits, people will do it less. So the first consequence is fewer jobs are offered than otherwise would be. And its cost small business particularly notices.
One way of avoiding the increased risk is to not hire folk. There are other ways to reduce the risk. Insist on higher qualifications. Be more picky about job history. Use more reliable intermediaries - those with some ongoing relationship with you, so you can judge them better and they are risking something themselves. Pick people it is easier for you to “read” (that is, people within your own cultural/social group).
All these expedients will be used, which makes the effects of the law hard to empirically demonstrate. Particularly amongst all the other factors bearing on the labour market.
Now, obviously laws making it hard to sack folk protect job incumbents. But they do at a cost. A cost that will fall disproportionately on the less educated (having fewer certifications), the young (with less employment history), the marginally attached to the labour market (with fewer networks) and the culturally different. In Australia, laws making it harder to sack folk can just about be labelled the let’s really screw over young Aborigines laws. Of course, labour regulations to protect job incumbents have a history of screwing over Aborigines - most notoriously, in the Stockman Case.
France has very restrictive laws on sacking folk: they are let’s really screw over young Muslim males from the banlieue laws. Young Muslim males from the banlieue notoriously having high unemployment rates.
Yet such laws “seem” so fair, generous and compassionate. Particularly if your base economic presumptions don’t really grapple with risk, uncertainty and loss.