Kling Reviews Mass Flourishing by Edmund Phelps

Article Link

from the article

Phelps believes that such a dynamic economy requires cultural support. He writes, 

"Modernist beliefs include some distinctive ideas of what is right: the rightness of having to compete with others for positions of higher responsibility, the rightness of greater pay for greater productivity or greater responsibility, the rightness of orders from those in responsible positions and the rightness of holding them accountable, the right of people to offer new ideas, and the right of people to offer new ways of doing things and to offer new things to do. All this stands in contrast to traditionalism with its notions of service, obligation, family, and social harmony. (page 99)"

However, modernism generated a backlash. One form that the backlash took was socialism. However, socialism never acquired the popular support of another form of backlash, called corporatism. Phelps writes, 

"One of the corporatist criticisms of the modern economy was that it had no leadership... The desire for direction (for dirigisme, as the French said) was a major strand of corporatist thought.

Many corporatists saw the uncoordination in capitalism as another source of disorder. They sought a system of concerted action. At the micro level, a company's owners could act on a proposal only if "stakeholders," such as employees, agreed (codetermination or mit Spreche). At the macro level, legislative action needed the consent of the main players, capital and labor (Concertazione). (page 138)"

Source: Arnold Kling, "Modernism vs. Corporatism," econlib.org, December 2, 2013