DP332 Imperfect Labour Markets, the Stock Market and the Inefficiency of Capitalism

Author(s): Alan Manning
Publication Date: August 1989
Keyword(s): Capitalism, Collective Bargaining, Labour Markets, Stock Market
JEL(s): 051, 832
Programme Areas: Applied Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=332

In a capitalist economy capitalists can sell their stake in a firm on the stock market whereas workers cannot sell their jobs. It is argued that when workers have some bargaining power this asymmetry in property rights leads to inefficiencies. The consequences of this are explored and certain policy options considered.