Rigidities in the Labour Market

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Abstract
THE STEADY EXPANSION OF THE FUNCTIONS OF GOVERNMENT and its increasingly interventionist role in the economy has for much of the twentieth century seemed an inexorable and irreversible trend. The jurist, Dicey, already saw it as such at the beginning of the century. In a famous series of lectures, he traced the retreat of Benthamite individualist liberalism in the face of what he called ‘collectivism’. The common theme in all the developments he considered — the protection given to trade unions on the one hand, compulsory education and municipal trading on the other — was their limitation of the freedom of contract, the limitation of — the buzz-word of British politics in the late 1980s — ‘choice’.

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