‘Systems of production’ contains a number of chapters written with Frank Wilkinson‘s original 1983 article from the Cambridge Journal of Economics entitled ‘Productive Systems’ very much in mind. His chapter opens the main body of the book and a working paper with the same content can be downloaded here.
A point that several of the chapters in the book make is that cooperation between capital and labour in the productive process is necessary for efficiency and that adverserial industrial relations are likely to impede economic progress. What is more controversial is the form this cooperation should take. The authors of a number of the chapters clearly support trade unions and the role they can play in safeguarding social rights, ‘decent’ wages, and productive efficiency. Where wages sometimes need to be cut in a company or across an industry during a recession for example, trade union agreements can ensure a more equitable outcome in securing a ‘voice’ for labour. They can press for social rights in the workplace and help firms and economies adjust to structural change in which workers need to be re-allocated from declining to growing industries. Government has a role to play here too, in providing training and re-training, assisting with worker mobility and setting the macro- and microeconomic framework for the economy in which productivity grows and improves the standard of living of as wide a majority as possible.
In the chapter on German industrial relations, it is argued that what is often needed more than ‘deregulation’ is ‘re-regulation’; new laws should replace older ones to enhance the flexibility of the workforce and stimulate innovation. The productive system should therefore evolve from where it is rather than fit into a textbook prescription. In some ways this is a conservative view, in which history and past successes are taken very much into account in designing new policies and systems of regulation. Occasionally radical change may be needed however, but history and insitutions still need to be studied carefully in the process.
One of the important lessons from Wilkinson’s original article (see above) and the updated piece from 2003 is that history and institutions matter and should be analysed fully in formulating theories in economics and using those theories to make effective policy.