gpowell,
This sentence is incoherent.
I quoted one sentence too many at the beginning of my post, causing confusion as to what was 'more or less correct'.
I was acknowledging that the quote from DeLong was not, as you noted, precisely in accordance with my prediction.
Given the confusion, I'll find another starting point, rather than respond directly to the rest of your post.
When I talk about the ranking system, I am talking about virtually the entire economy, although not union jobs, sliced into very, very small slices, dealt with separately. These are what are aggregated to make the total job market, if and when necessary. Each slice is a single job and the set of candidates who are perceived by the interviewers to be able to objectively perform that job adequately. If candidates are available to objectively perform the job at a higher level than adequately, they would fall into different slices. It is the ranking system that brings in the ranking of perceived intangible values that are worth being bid up in competition with other potential employers. If there are no intangibles perceived, the interviewer is willing to hire a random candidate. The ranking system is a relative system, only worrying about premium wages offered. For each job, there is a base wage, offered to any random candidate that DOES result from supply and demand AND involves candidate bargaining. But the premium is determined completely from bidding process between potential employers for the highest ranked candidate, and leaves the candidate only to take the highest offer. This is why I have rejected your bilateral negotiations at the ranking system stage.
Once you understand my point of view here, whether or not you agree with it, we can talk about what seem to me to be serious fallacies in using the concept of productivity in the determination of wages.
Regards, Don |
