For Uchitelle, ... bosses ... [are] morally obligated, and in a better world would be legally obligated, to invest the company's resources in directions that promised a chance of preserving the jobs of longtime workers — even if such investments were, in the judgment of Wall Street, unlikely to succeed, and so would depress the stock price.
Uchitelle's diagnosis that mass layoffs are a serious national problem is convincing. But for this card-carrying economist, his desired prescription is not. I see no examples anywhere in the world of economies that have taken steps in the direction he desires without severe side-effects. In Western Europe, unions bargained fiercely for job security, and governments enacted "no firing without cause" laws, giving workers individually and collectively quasi property rights in their jobs. Yet this did not lead to a happy labor market. Instead, high overall unemployment, extra-high long-term unemployment and extra-extra-high youth unemployment appear to be the consequences of attempts to ensure that managers and workers are in the same boat. Companies that know they cannot lay off groups of workers if demand goes sour are very likely to be companies that hesitate to hire workers when demand is strong.
<http://www.nytimes.com/2006/04/02/books/review/02delong.html>
Carl