Having commented on the possible pieces of a Theory Y Econom- ic Model for a nation and the firms within its economic system, it is useful to probe a bit more deeply into the implications of such Models/Theories for actual economic policy decisions. Interest- ingly, one does not have to simply imagine a society and its firms taking such a path because examples of many of the necessary steps toward such an economic model have already been taken and examined in detail. Some of this has come from efforts in countries such as Denmark, Sweden, and Norway (Florida and
Tinagli 2004), but the most extensive and at the moment at least, successful push towards a Theory Y economic model by policy makers and firm leaders, is that undertaken by Finland from the middle of the 1990s to the present.
Indeed, the investments made in Finland’s educational, health, and environmental systems have read like Theory Y economic pre- scriptions for taking a second tier raw materials oriented economy toward the top of the first tier world product innovation ranking.
Not only has Finland become one of the top countries on com- petitive measures (Pyoria, Melin and Blom 2005) but its leading firm, Nokia, is now a household name in the global information processing industry. Not surprisingly, the government’s Theory Y economic behavior has been broadly modeled by its leading firms, with individual managers in firms such as Nokia apparently being reluctant to accept outsized individual economic gains and expressing concerns about their equitability. In Finland, at least, Theory Y Economic policies have not only benefited the broad society but have been modeled across the society’s firms and indi- vidual citizenry.
Given that the outcomes in Finland and some of its geographic neighbors have been the result of them pursuing Theory Y eco- nomic policies, the question is what would happen if one or more of the large economic players began to move in such a direction.
Snippets of the possible returns can be seen in at least some of the larger economies. One can argue, for example, that ideologically, China has pursued some aspects of a Y model with its commitment to socialist values and its heavy investments in public education and health care. While there are beginning to be some returns to these investments, critics would argue that a true Theory Y ap- proach has not been taken because the gains have come at the expense of China’s smaller neighbors and some of its own citizens as well as its physical environment. Perhaps more instructive is the case of Japan, which has been more thoughtful environmentally (though opponents of nuclear power might argue that, given the recent natural disaster). Japan has maintained highly visible ves- tiges of its feudal past across its economy and society while making enormous society-wide investments with high payoffs in education and health.
In contrast to these efforts in China and Japan, the third mem- ber of the global economic big three, the U.S., does not appear to have moved much, if at all, from the Theory X Economic policy roots planted in the 1950’s and 60’s by Friedman and others that took hold and flourished in the 1980s. While actively involved in world affairs (for good or bad, depending on your perspective), the basic economic approach in the U.S. since at least the 1980s still reflects a mostly self-maximizing view with little concern for others. Thus, it is not surprising that the U.S. leads the world in global goods production and global individual and corporate wealth but trails many societies in most social indices, including a declining middle class, widely disparate health and well being sta- tistics across societal segments and major uncertainty with regard to its future course of public policy toward X or Y goals. Indeed, across the world’s more advanced nations, only the northern Eu- ropeans and to a lesser extent, the Japanese, appear to be dedi- cated to the pursuit of something like a limited Theory Y set of public economic policies.
Against this less than bright backdrop, can we imagine the pre- scriptions a Theory Y Macro Economic Policy theorist would make for the remaining years of the 20s? Clearly the prescriptions would require concerted, collaborative action by the big three and the European Union, which across their socio-economic experiences have ample combined evidence not only that it could be done but that the positive benefits would be enormous for them and the rest of the world. For example, if the U.S., Japan, China and the EU all committed to a shared public education model guar- anteeing all their citizens access to free education up to and in- cluding advanced degrees (already provided in several societies, notably Finland and Denmark) with access across national lines to assure equity, an enlightened global society would at least begin to emerge in less than two decades. Similarly, a concerted effort could be mounted, with appropriate financial incentives for all parties on such issues as global warming, global food production and global health (including birth control). These issues are, as noted, regularly discussed and debated in such forums as the UN, but they are most often portrayed as involving economic tariffs.
Taking a Theory Y rather than a Theory X economic view, howev-
er, suggests such efforts being visualized as economic investment opportunities, with almost assured long term returns for recipient and investor economies. Indeed, stated in this manner, alternative X and Y visions of the global economy begin to come clearly into focus.