Some jobs link compensation directly to work effort. Piece-work systems, whichpay workers for each bit of work they perform, are one example of this approach; soare contract workers (hired to perform a specific task, and paid only when that taskis completed). This strategy has limited application, however: usually employerswant their workers to be more flexible, performing a range of hard-to-specifyfunctions (rather than simply churning out a certain number of widgets per hour).Even in straightforward jobs, piece-work systems produce notoriously bad quality,

Real wages stagnated in most countries, in the face ofhigher unemployment, attacks on unions, and reductions in income securityand other measures that supported workers’ bargaining power. Yet productivitycontinued to grow, thanks both to employers’ renewed power in the workplace andto continued technological progress. Figure 8.1 illustrates the sharp divergence ofreal wages from labour productivity in the US economy that coincides perfectlywith the arrival of neoliberalism.

There is still much debate and controversy within economics today – althoughnot nearly as much as there should be. Economics instruction in most English-speaking countries conforms especially narrowly to neoclassical doctrine; thereis more diversity in economics in continental Europe, Latin America, and a fewother countries.

Creative companies can devise all sorts of different ways of earning profits.Some are useful: developing higher-quality new products, and developing better,more efficient ways of producing them. But competitive markets can also rewardcompanies for doing things that are utterly useless, from the perspective of humanwelfare (see Table 7.3). And if lax laws and regulations allow them to, profit-seekingcompanies will do things that are downright destructive to workers, communities,customers, and innocent bystanders.