Employment with a Human Face: Balancing Efficiency, Equity, and Voice.

Author:Fairris, David
Position:Book Review

Employment with a Human Face: Balancing Efficiency, Equity, and Voice, by John W. Budd. Ithaca, N.Y.: ILR Press. 2004. ISBN 0801442087, $39.95. 263 pages.

This is an ambitious book. I can think of few treatises on industrial relations systems that cover such a wide array of seemingly peripheral literatures--from philosophical theories of distributive justice to economic theories of efficiency in resource allocation--and with such a command of the history and institutions of industrial relations across the globe. The book strives to develop a new paradigm for thinking about industrial relations systems and so is akin to the master works of John R. Commons or John Dunlop.

The first four chapters develop the theoretical paradigm. Budd draws from philosophy, economics, and political theory to argue that a system of industrial relations should seek to balance efficiency, equity, and voice in the employment relation. These chapters contain careful reviews of the literature on distributive justice, the efficiency of markets, and democratic rights. Although Budd embraces particular perspectives in each of these areas, critical views are given ample play. It is too much to expect an institutional economist with a deep interest in industrial relations systems to resolve the tension between, say, John Rawls and Robert Nozick over the just society. And, wisely, Budd doesn't try. What he does, instead, is to make a convincing case that these issues are crucial to the agenda of any discussion of industrial relations, and then simply takes a stand.

Having identified the three goals to be attained, and having argued for a balance of the three, he applies this framework to an analysis of the types of industrial relations systems that might best meet them. Markets are good on efficiency but offer little in the way of equity or voice. Government regulation can create greater equity, and even enhance efficiency when markets fail, but don't offer much in the way of a participatory voice for workers. Voice in the workplace is best taken up by unions. All industrial relations systems are a mix of these three elements but not the "balance" of the three that Budd would like to see. So, for example, the Japanese industrial relations system is good on efficiency but has too little equity and voice, whereas the European systems are great on equity but lack efficiency and a participatory voice for workers.

The crowning chapter, to my mind, is chapter 8, where Budd...

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