That sentence is just stupid. We have a functioning economy -- only it might function a little better. Flexible wages may (just may) be good for the 'economy' (never proven) but are bad for the 'flexible'. ====================================================== From Avner Offer, Chichele Professor Emeritus of Economic History, University of Oxford All Souls College, High St., Oxford OX1 4AL, tel. 44 1865 281404 email: [log in to unmask] personal website: http://sites.google.com/site/avoffer/avneroffer ________________________________________ From: Societies for the History of Economics [[log in to unmask]] on behalf of Robert Leeson [[log in to unmask]] Sent: 28 March 2014 04:14 To: [log in to unmask] Subject: [SHOE] “we shall not get a functioning econo my until wages again become flexible” Could someone justify the assertion that “we shall not get a functioning economy until wages again become flexible.” If wages are rigid or above equilibrium, an economy may become, in places, more productive: incentives will encourage the employment of more capital and less labour. This may increase unemployment - which causes policy problems - but how is this dysfunctional as opposed to sub-optimal? RL