Theory of Employment, Wealth and Efficient Labour Market through National Labour Exchange

Abstract

The paper proposed setting up of a National Labor Exchange along the lines of National Stock Exchange, Bombay Stock Exchange and Commodity Exchanges Worldwide in order to promote efficiency in the labor market, full employment and generating wealth and positive contributions to GDP. The paper also considers that Labor is a valuable Resource and a Wealth of the Nation, having potential to generate more wealth. The paper opposes the concept of Wages or Price of Labor as in classical economics, but supports Ricardo’s theory of Value and Laissez faire through efficient labor market. The paper opposes Keynesian theory outlining Government Intervention to generate Employment though Monetary Policy changes and Fiscal Policy as Keynesian theory is based on his book on The General Theory of Employment, Interest and Money which was a product of Great Depression of 1931-36 not reflecting normal economic and business conditions in the economy when businesses failed and labor laid off in abundance. The paper critically evaluates various theories on Labor. The proposed Model of creating efficient Labor Market through National Labor Exchange will facilitate an automatic way for Full Employment, generating wealth for the Nation, Firm and Labor, easy access to information about the availability of Labor (man hours) and jobs. It would also help save employment costs in a Market Driven Economic System with Asymmetric Information. National Labor Exchange as proposed would also help Rating Certificates, Diplomas, Degrees, skill development and experiences based on Scores and would facilitate transparency in the Efficient Labor Markets. It would automatically adjust the return to labor based on value addition and economic and business conditions avoiding the problems of laying off. Efficient Labor Market would facilitate perfect or nearly perfect mobility of labor and full employment and maximizing wealth through National Labor Exchange.