The Case for Profit-Sharing

Abstract

I come from a state in the United States — Massachusetts — where the unemployment rate averaged 4 per cent in the mid-1980s, and from a metropolitan area — Boston — where the unemployment rate has been even lower. Furthermore, this is a region of the country which not such a very long time past bore roughly the same relation to the rest of the United States as Northern England does to Southern England today. In the early 1970s Massachusetts was a place with one of the worst unemployment rates in the United States, with empty textile or shoe factories and run-down blighted areas all over the landscape. How the economic turn-around occurred is a story that must be saved for another time. The point I wish to make here is this. Massachusetts today bears witness to the fact that there is no reason in principle why unemployment rates of 4 per cent or less should be unattainable.

This is an extended version of a lecture delivered on 7 July 1986 in the House of Commons. Martin Weitzmam is Mitsui Professor of Economics at Massachusetts Institute of Technology.