Edmund Phelps on Productivity Slowdown: Limits to Utilitarian Economics

Nobel Laureate economist Edmund Phelps blames the increasing marginalisation of a large number of workers in unstimulating jobs on low wages as a contributory factor to productivity slowdown in the West. He blames utilitarian economics because it cannot accommodate the idea of social inclusion. In our view, the problem is best understood as a manifestation of the poverty of the theory of prices governing the allocation of resources.