The quitting economy
I really think trying to reason about labour markets using pure theory in a Hayek-Friedman-esque way is a dead end.<p>It&#x27;s the 2nd time in two days I made the recommendation, but throwing Ronald Coase into the Neoliberal canon would help a lot. He was a &quot;chicago school&quot; academic from the same intellectual family, so it shouldn&#x27;t be too much of a culture shock.<p>He wan&#x27;t like &quot;progressives&quot; in the &quot;evidence based&quot; sense but he also objected to first principles theory like Friedman. Instead, he tried to find persistent phenomenon and theorized about why they exist.There was always a link to the real world.<p>Anyway, the pure theory approach leads to a general conclusion&#x2F;assumption that markets are the same. The market for labour, barbie dolls, whatever.<p>IRL, labour markets are obviously very different than most other markets. It&#x27;s inflexible. People stay in jobs a long time and most employers actively try to lower their average turnover. Why?<p>If flexibility is so wonderfully efficient, why do almost all companies have such a big inflexible workforce? Why is the market for labour so different <i>in practice</i> than the market for oral hygiene products and services.<p>Why isn&#x27;t Wall street staffed by day labourers or SV products built by quarterly contractors? You have to look past pure theory to answer these questions. I think you probably have to look beyond economics, or at least to its fringes (like behavioral economics).