The Flexibility Paradigm - Since the end of the 1970s economic performance has diverged widely among industrial countries. Explanations offered for the high unemployment rates experienced throughout Europe in the 1980s and 1990s, as compared with the "employment miracle" of the US, have been couched in terms of the flexibility paradigm. In the first section of the paper it is argued that the various versions of
this explanation cannot account for the characteristics of European unemployment. The second section seeks to provide an alternative explanation for the decade of growth experienced by the US economy, arguing against the hypothesis that there is a trade-off between employment and inequality and in favour of separate explanations for the growth of employment and the dramatic increase in earnings inequality. The conclusion is that, if the increase in inequality is not a necessary consequence of technological progress, then an option remains open for a European model of growth and equity.