Abstract
What was happening, indeed, seemed to question the validity of Tarantelli’s conclusions, thus enhancing monetarist thesis. From the second half of the 1960s, the contemporaneous presence of a substantially growing trend of the unemployment rate, even if in presence of inflation, seemed able to invalidate Phillips curve’s indications. A higher level of inflation, as Friedman himself claimed, would imply a higher number of unemployed workers.
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Notes
- 1.
- 2.
Tarantelli (1978 [5], pp. 52–53).
- 3.
Tarantelli (1976 [3]).
- 4.
Tarantelli (1971 [1]) and Tarantelli, (1972 [1]).
- 5.
Sylos Labini (1970).
- 6.
Tarantelli (1976 [3], p. 416).
- 7.
Modigliani-Tarantelli (1976 [3], p. 416).
- 8.
Tarantelli (1978 [5], pp. 159–163). An analogous demonstration, but at a deeper level of formalization can be found in Tarantelli (1974 [2], pp. 92–104). Tarantelli also analyzes the case of an open system. Compare Tarantelli (1978 [5], pp. 162–163).
- 9.
Tarantelli (1972 [1]).
- 10.
Tarantelli (1978 [5], p. 57).
- 11.
Tarantelli (1978 [5], p. 51).
- 12.
Tarantelli (1978 [5], p. 62).
- 13.
Tarantelli (1986 [1], p. 386).
- 14.
By Tarantelli’s explicit admission, such a modus operandi represents a generalization of the consume model that emerges from the research lines of Marx. The presence, in Marx analysis, of an industrial reserve army, composed by structural unemployed, who receive “incomes from dependent and independent work for occasional remunerated jobs and from marginal activities not declared and from transfers of various nature such as family ties” legitimizes, somehow, the hypothesis of a marginal and average unitary propensity to consume for a group such as this. The extension, as it can be deduced, consists of the fact that Kaldor generalizes such an approach to the complex of workers. Tarantelli (1973 [2], p. 816).
- 15.
The traditional IS curve can be obtained through an analogous procedure supposing dP = 0. In such a case, it can be obtained: dY/dr = ∂I/∂r/ (1 – aw). Also regarding this expression, it is possible to observe that it results indeterminate, being ∂I/∂r < 0 as a hypothesis, but also being: 0 < aw < 1.
- 16.
Tarantelli (1978 [5], p. 171). An analogous demonstration can be found in Tarantelli (1986 [1], pp. 386–389) and Tarantelli (1974 [2], pp. 95–104).
- 17.
It is also useful to take into account that Tarantelli’s analysis of the labour market tends to collocate at a methodological level on a different plan compared to the approach of partial equilibrium, widely adopted in the seventies. It is not about individualizing a wage and an employment level able to lead to a market clearing regardless of distributive mechanism and more generally regardless of the level of activity in the system. On the contrary, Tarantelli proposes to investigate the labour market’s structure in conjunction with the quantities relevant to the goods market and to distributive aspects. Fiorito (1985, p. 498). As regards the partial equilibrium approach see Lucas and Rapping (1969) and Black and Kelejian (1970).
- 18.
It is Tarantelli himself who proposes, in some contributions, a close examination of the consumption theories in the history of economic analysis. Compare Tarantelli (1973 [2]) and Tarantelli (1979 [4]), Tarantelli (1979 [5]) and Tarantelli (1979 [6]).
- 19.
Tarantelli (1979 [4], p. 863). For an indepth examination of the construction of the regression function and of the econometric method compare Tarantelli (1974 [3] 841–862).
- 20.
The main assumption adopted by Modigliani is that the favourite allocation during our lives, is independent by the volume of available resources. If an individual finds himself a beneficiary of additional resources, he distributes them, in every successive period, in the same proportion in which he allocated the resources previously.
- 21.
Tarantelli offered a first formulation of the distributive theory which here we examine in (Tarantelli 1979 [13]). Then he would have done an indepth examination, as shown in Tarantelli (1986 [1], pp. 405–447).
- 22.
In regard to this, Tarantelli’s words appear significant “The most widely accepted theory of distribution of income, at least in Italy, – he affirms – is without doubt Sraffa’s. This theory affirms that for a technology inherited from the past, the profit rate can be obtained only once that we have the wage rate or vice-versa […]. This theory has constituted a free way for all those economists that believe, and I think they are right, that the distribution of income between wages and profits is a question of relative power between the two (and more) income classes and not a variable only determinable on the basis of technology”. Tarantelli (1979 [4], p. 863).
- 23.
Tarantelli demonstrates also that once we have assumed such quantities externally the transfer wages result internal to the model.
- 24.
Tarantelli (1986 [1], p. 430).
- 25.
Tarantelli (1986 [1], p. 434).
- 26.
Tarantelli offers an alternative formulation to the model presented here, starting from the expression of the balanced growth rate, g, in the Harrod-Domar’s meaning. He expresses, in particular, g = (αP + D) / K = αY/K (m – 1)/m + D/K = I/K. Where m is a measure of the inverse of the wage share and (m – 1)/m = P/Y represent the share of profits. We can observe that, given the leverage (D/K) and the parameter α, the mark-up m results univocally determined by the growth rate g. Tarantelli (1978 [5], pp. 155–156). According to this approach, as in the one above we have examined, Tarantelli admits that he substitutes in the expression of the growth rate of equilibrium the Kaldorian assumption “of two given different marginal propensities (and average) to consume for the two income classes (wages and profits) with that of α and D/K, they are also given and constant (but non immutable)”. Tarantelli (1978 [5], p. 156). As regards the notion of m as the inverse of the wage share, corrected to take into account the variations in the composition of the employed labour force, distinguishing the share of wage and wage earners (LD) on the total of the employed (L), we can show, with Tarantelli, that we obtain w/π = (W/LD)/(LD/L). Remembering the full cost principle: p = m(w/π) and resolving for m, we immediately obtain that m = pπ/w. Compare Tarantelli (1974, p. 58n). Regarding the hypothesis of limited variability of the values of D/K and α, it is interesting to observe how Tarantelli accepts the conclusions reached in Modigliani-Miller (1961).
- 27.
Tarantelli (1986, pp. 436–437).
- 28.
Tarantelli’s analysis of neocorporatism is assigned to some essays such as Tarantelli (1984 [12]), Tarantelli (1986 [1]), Tarantelli (1986 [2]), Tarantelli (1986 [3]), Tarantelli (1986 [4]), Tarantelli (1988 [1]), and also to an extensive monograph published posthumous in the eighth series, sixth section of the “Biblioteca dell’economista” (Economist’s Library), directed by Federico Caffè, Siro Lombardini and Paolo Sylos Labini. Tarantelli (1986 [1]). The term “neocorporatism” is mentioned in place of “neocorporativism”. Tarantelli’s option for the former (neocorporatism) is to be traced to a suggestion from Caffè during the first episode of the radio broadcast Il mondo dell’economia. Tarantelli invited Caffè to express his opinion about the feasibility and the possible efficacy of “neocorporativism” in Italy. Caffè replied: “I would have preferred to have spoken about “neocorporatism” in order to avoid a word which to me isn’t very nice having lived through that time”. The original interview is registered on DVD n. 1 enclosed to Amari and Rocchi (2007).
- 29.
Tarantelli (1984 [12], p. 735).
- 30.
Tarantelli (1978 [5], p. 38).
- 31.
It is Tarantelli himself who offers an exemplification of events able to generate secondary effects. He argues that “the discharge of a high ranking civil servant with a “gold pension”, the verification of consistent tax evasion, the coming into effect of a law concerning seniority of state servicemen […] could, of course, cause economic consequences, even of a certain relevance, but they would contribute even more (and this is what is worse) to make the absence of “right” rules of the relational system emerge”. Compare Tarantelli (1978 [5], p. 38) and Tarantelli (1976 [1], p. 89).
- 32.
Tarantelli (1978 [5], p. 38).
- 33.
As regards the wage expectations, Tarantelli proposed to distinguish a variable dependent wage, conceived as “labour cost after productivity variations”, from a variable independent wage. Where it indicated the disposable labour income, that is the labour cost after the various types of tax distinguished by income classes and before the transfers of families of workers plus public expenses and investments which are also distinguished by destination to the different levels of income and social classes”. The “independency” of the wage came from “the difference between the social-political demand of the workers […] and the total lack of the social-political reply to those same needs by the side of the social and political groups which have managed Italian politics since the war”. Tarantelli (1978 [9], pp. 8 and 9). On the other hand, he observed, “if we build schools, hospitals or council houses with the major income which could come from an attack on fiscal evasion, if we re-qualify the composition of public expense and reduce waste, the workers available wage rises to the same level as the cost associated to the wage given by firms”. The delay “with which the contractual platforms found it hard to articulate themselves in a picture of credible compensation to be thrown on the negotiation table” was due to the lack of perception of a similar qualification. Tarantelli (1978 [1], p. 98).
- 34.
Tarantelli (1978 [5], pp. 133–134).
- 35.
Tarantelli (1978 [5], p. 67).
- 36.
Tarantelli (1978 [5], p. 134).
- 37.
Modigliani and Tarantelli, analyzing the dynamics of aggregate expenses in Italy in the period 1951–1971, concluded that, in the long term, a redistribution of income in favour of workers, even if it had not been welcomed favourably by businessmen, could have favoured the accumulation instead of being against it. “A suggestive implication of this conclusion – they write – should be that of alleviating the schizophrenia of many economists and other social science scholars who in the past were tormented between the support of the redistribution of income in favour of workers for equity reasons and the reluctant acceptance of a redistribution in favour of profits, with the justification that it would have provoked an increase in savings and the formation of capital and therefore of the potential economic rate development. Our verifications suggest that a simple redistribution of a set income in favour of profits would increase savings only in the short term, while it would provoke a decrease in the long term […]. Also, a reduction in return rate or the profit rate, deriving from a lower productivity of capital or from fiscal impositions on capital income, can also increase savings, even if inference is not certain”. Tarantelli (1974 [3], p. 862).
- 38.
Tarantelli (1978 [4]).
- 39.
Tarantelli (1984 [12], p. 738).
- 40.
Accornero (1978, pp. 39–41).
- 41.
Compare Tarantelli (1974 [2], pp. 190–193), Tarantelli (1977 [1], pp. 103–104), Tarantelli (1978 [5], pp. 52–54) and Tarantelli (1984 [2], pp. 729–733). Fig. 4.2 represents the outline which the author made, inspired by Dunlop’s taxonomy classification. See Tarantelli (1978 [5], p. 66), Tarantelli (1986 [1], p. 38) and Dunlop (1958). The graphical difference between the two arrows aims at underlining the spread between demanded and offered rules, that is the determining element of the conflictual triangulation of the system of industrial relations.
- 42.
For an indepth examination of the conflict theory proposed by Tarantelli and the analysis it unleashed see Baglioni (1985).
- 43.
In the school boom thesis, a determinant role is also played by the demographic element, that is the determining in the first years of the 1950s of a substantial increase in births. The hypothesis of school boom and of the generational leap are widely discussed in Tarantelli (1980 [6]).
- 44.
Compare Doeringer and Piore (1971). The dual labour market, suggested by Doeringer and Piore, forms an approach whose origin in the history of economic thought, can be traced back to the American institutionalism school, of which T.B. Veblen, J.R. Commons, and R.T. Ely are considered the main proponents. But mainly J.R. Commons and his pupil S. Perlman dedicated particular attention to the study of the labour market and the institutional mechanisms that ruled its working. Particularly referring to Doeringer and Piore’s analysis, it is possible to observe that the idea of internal labour market was already in some measure prefigured by Kerr (1950) through the notion of institutional labour market, i.e. a type of market where the competitive mechanisms were substituted by institutional rules. Compare also Kerr (1954). Conversely, Fisher (1951), when presenting an empirical study on the agricultural labour force in California, underlined the peculiarity of that which he defined a structureless market, listing the following five points: (1) absence of seniority rules, that is rules coded through union negotiation on the basis of which workers privileges were agreed on the base of their seniority in the business, (2) relationship of temporary and impersonal work between employer and workers, (3) absence of professional qualifications, (4) definite wages for product unit, (5) scarce capital intensive technology. In 1954, deepening his studies, Kerr reached a more complete formulation of the concept of institutional labour markets. The notion of internal labour market can be traced back to Dunlop, who defined it as a group of rules which determined the movement of workers between internal work posts inside administrative units like businesses, society or hiring halls. Dunlop (1966, p. 32).
- 45.
From this starting point, Doeringer an Piore widened the analysis to take into account the existence of primary and secondary labour markets. The former were defined as a plurality of internal markets and sectors of the external market in which it resulted possible to identify definite career profiles in which the use of the labour force assumes a character of stability that can be assimilated to that of the internal market. The latter were characterized both by the instability of the relation of employment and that on the duty level as regards each worker.
- 46.
It is a theory which Tarantelli elaborated, as he warned, during the course of compared systems of industrial relations, held by him at MIT in the fall term 1979–1980. Tarantelli (1981 [18], p. 22)
- 47.
Tarantelli (1978 [5], pp. 34–35).
- 48.
- 49.
Tarantelli (1980 [6], pp. 663–664).
- 50.
Tarantelli (1980 [6], pp. 666–667).
- 51.
Tarantelli (1978 [5], p. 36).
- 52.
Tarantelli (1978 [5], p. 36).
- 53.
- 54.
Tarantelli (1978 [5], pp. 33–34) and Tarantelli (1982 [6], pp. 78–79).
- 55.
Tarantelli (1980 [6], p. 658).
- 56.
- 57.
Tarantelli (1978 [5], p. 33).
- 58.
Tarantelli intended, anyway, to underline the intellectual value of Fuà’s thesis, even though keeping his distance. He affirmed “The list of who in Italy was spokesperson of the monotonous chorus on labour costs is so long and well known that it would even result boring for the reader. In this list we would risk of naming many examples of economic dilettantism along with a few scientific works. The reference to an economist such as Fuà – whose ideas despite my disapproval on this particular occasion, I have always deeply respected – is made because his work represents without any doubt the best which up to now has been empirically documented and also discussed in favour of this chorus, and because of the success a book like his has had”. Tarantelli (1978 [5], p. 68n).
- 59.
Fuà (1976).
- 60.
Fuà (1976, p. 42).
- 61.
Hicks affirmed “A system of wages which will satisfy all the demands for fairness that may be made upon it is quite unattainable. No system of wages, when it is called in question, will ever be found to be fair. That has always been true; how is it then that we have got on, in the past, as well as we have? Only because the wage-system has not much been called in question. That can happen; but it is necessary, for it to happen, that the system of wages should be well established, so that it has the sanction of custom. It then becomes what is expected; and (admittedly on a low level of fairness) what is expected is fair”. Hicks (1974, p. 65).
- 62.
Tarantelli (1978 [5], p. 77).
- 63.
Tarantelli (1978 [5], p. 73). Compare also Tarantelli (1976 [7]).
- 64.
Tarantelli (1978 [5], p. 77).
- 65.
Although moving from analogous assumptions as those of Fuà’s, Frey reached antithetical conclusions. He suggested two kind of policies to relaunch the activity rate of the system. The first, which should be used in the short period, consisted in an increase of completely protected posts in the tertiary activity. The second, which should be used in the long period, hinged on a restructuring able to permanently widen explicit employment in the industrial sector. Frey (1978), pp. 229–233.
- 66.
- 67.
Hartmann and Ross (1960). Tarantelli revealed that Hibbs starting from the same conditions reached an antithetical thesis on the secular decline of strikes Hibbs (1976). According to Tarantelli, the main fragile element of Hartmann and Ross’ theory is that they assumed as an index of conflict the number of hours lost by strikes relativized in regard to the number of people enrolled in the union. The trend of this index showed a significant and progressive decrease from the beginning of 1900’s to the 1950s. Hartmann and Ross ascribed such a phenomenon to a decrease in the number of hours lost by strike. In reality, explains Tarantelli, it was mainly due to the increase of enrolments in the union. Tarantelli (1986 [1], pp. 42–43).
- 68.
Tarantelli (1978 [5], pp. 62–63).
- 69.
Tarantelli (1978 [5], p. 62).
- 70.
Tarantelli (1978 [5], p. 61).
- 71.
Tarantelli (1986 [1], pp. 83–84) and Tarantelli (1986 [3], p. 790).
- 72.
De Stefanis and Rizza point out also that, to the extent that it represents the degree of social participation and consensus on income distribution and its determination, corporatism can make central bank independence epiphenomenal in determining inflation. Indeed, high social agreement can bring about both low inflation and high central bank independence. De Stefanis-Rizza (2007).
- 73.
Tarantelli (1984 [12], pp. 727–728).
- 74.
Tarantelli (1986 [1], pp. 393–394).
- 75.
Caffè (1990 [1986], p. 16).
- 76.
- 77.
Calmorfs et al. (1988).
- 78.
Tarantelli (1981 [9], p. 193).
- 79.
Tarantelli (1986 [1], p. 101).
- 80.
Carniti (1983).
- 81.
Schmitter (1974, p. 86).
- 82.
Winkler (1976, p. 101).
- 83.
Lehmbruch (1977, p. 94).
- 84.
Tarantelli (1986 [3], p. 778).
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Michelagnoli, G. (2012). Post Keynesian Model and Industrial Conflict. In: Ezio Tarantelli - Economic Theory and Industrial Relations. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-22312-9_4
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