Althingi, notwithstanding internal conflict, recognized the fundamental role of the society, and put at work “the constituent power of the people.” Indeed, according to the Act on Constitutional Assembly,that organ has been called to consider the essential aspects of the life in common, namely: the foundations of the Icelandic constitution and its fundamental concepts; the organization of the legislative and executive branches and the limits of their powers; the role and position of the president of the Republic; the independence of the judiciary and their supervision of other holders of governmental powers; questions on the elections and the electoral districts; public participation in the democratic process, including the timing and organization of a referendum; transfer of sovereign powers to international organizations and the conduct of foreign affairs; environmental matters, including the ownership and utilization of natural resources. Such duties given to the Constitutional Assembly have been not a conferral of competences, but the recognition of the Icelandic citizen’s original constituent power.This recognition is performed by means of the description of a reasonable ambit of use of such power, with respect to your objective needs. There is no significant contrast in the fact that the constitution of Iceland corresponds to the extent of the constituent power recognized by Althingi.

We therefore may say that the constituent power of Icelandic people has been reasonably used and therefore fulfils the subjective condition to enact a constitution. Now we shall apply the second part of the test to show that the subjective conditions to enact the constitution have been met, and namely that the Icelandic constitution approved by the people includes a project of life in common,blueberries in containers which is reasonable, useful, constitutes improvement over the former charter, and is understood and shared. Here we may consider the question of method, and namely that in the process of making a new constitution the use of a “collective intelligence” approach has been adopted.Also the declarations of the citizen are worth taking into account. The documentary film “Blueberry Soup” and other film-based documentation show how, in the aftermath of the crisis, Icelandic citizens developed first a moral reflection, which evolved into a political reflection. They appear well aware of the difficulty of getting involved directly in the process of figuring out what is best for the community, underlining in any case the importance of participating in public life and contributing to the common good. Such voices are proposing something new and are sometimes critical. As one citizen complains in the film, there are still people who say that they do not have time for the ambiguities of politics. And therefore that they need a strong leader, since they do not wish to be bothered by all the issues concerning politics, the opinions they are supposed to have, and the discussion.

In his view democracy means not having strong leaders, but having strong people who are not thinking by themselves and are ready to change their opinion.The citizens of Iceland seem to make an effort to join traditional habits with new political proposals. For example, Icelandic sewing clubs began as a way for women to come together within the community and learn how to survive the harsh environmental challenges. The political meaningfulness of these activities is enhanced by the fact they are not are an alternative to representative government, but they are the manifestation of a civil society, which aims to grow, taking up its own responsibilities, completing and integrating the process of government. Together with participation, this approach is a manifestation of “subsidiarity,” a principle that has an important significance for many today’s constitutions both of national states, and is a fundamental principle of European Union treaties. As you can see, citizens have not only produced a new constitution, making a correct and reasonable use of constituent power. The whole society has been participating in the reflection that led to the development of a new constitution, and so the constitution includes values and approaches that the society shares and understands. The importance of the arguments presented by civil society shows that the subjective conditions necessary to enact a constitution do exist and that your constituent power has been correctly used. Althingi therefore has the duty to give force to the constitution you approved. To refuse to fulfil such a duty, claiming for example that in the Icelandic constitutional tradition Althingi must be at the center of political life does not appear, at the present state of affairs, acceptable.

Althingi recognized the constituent power of the people. Once the people made use of that power, Althingi must act accordingly. In the United Kingdom, where traditionally Parliament is at the center of political life, it respected the people’s will after the vote to withdraw from the European Union. Unlike Britain’s Parliament, Althingi has another fundamental reason to respect its duty to enact the constitution voted by the people: the use of the constituent power has been the shortcoming of Icelandic institutions to grant transparency in governance, a fair distribution of common economic resources, protecting at the same time citizens and the international financial community from the moral hazard of the few. A canonical prediction of economic theory is that high wages increase labor productivity. In settings where workers are salaried or paid by the hour, this is the concept of efficiency wages . In settings where workers are paid in proportion to their output , the theoretical connection between wages and productivity is even clearer.1 However, it has proven difficult to empirically estimate the responsiveness of labor productivity to piece rate wages, since much of these wages’ variation is driven by endogenous characteristics of the production process. In this paper, I provide the first quasi experimental estimate of the elasticity of labor productivity with respect to piece rate wages. Specifically, I analyze a high-frequency panel of worker-level production data from over 2,000 California blueberry pickers paid by piece rates. Surprisingly, I find that on average, labor productivity is very inelastic with respect to wages. Piece rate wages are interesting to study because they offer such a direct, clear, and salient link between a worker’s effort and reward. In general, optimal labor contracts can be quite complex, as they must effectively in centivize worker effort while simultaneously accounting for issues like risk aversion, asymmetric information, and moral hazard . However, these complications are less of a concern in settings where a firm can cheaply monitor both worker productivity and product quality. In such cases, theory suggests piece rate wages will outperform other common incentive schemes .2 Understanding how workers respond to changes in a piece rate wage is important in sectors where these wages can vary over time, like in specialty agriculture, the auto repair industry,planting blueberries in pots or the growing ride share market .Econometricians face a fundamental challenge when trying to estimate the causal effect of piece rate wages on labor productivity: these wages are inherently endogenous. As an example, consider blueberry picking. When ripe berries are scarce and spread out , average worker productivity is low. When ripe berries are abundant and dense , it is easier for workers to pick berries quickly, and average productivity is markedly higher. Because farmers aim to keep their workers’ average effective hourly pay relatively stable over time, they set piece rate wages higher when picking is more difficult, and lower when picking is easier. In order to account for piece rates wages’ endogeneity, I adopt a two-pronged identification strategy. First, exploiting the richness of my multidimensional panel data, I econometrically control for environmental factors like seasonality and temperature that directly affect the berry picking production function. Second, I use the market price for blueberries as an instrument for piece rate wages. This price is a valid instrument because it affects a farmer’s willingness to raise piece rates , but is otherwise uncorrelated with picker productivity. Furthermore, the market price for California blueberries is set by global demand and global supply. As a result, individual farms are too small to directly affect the market price, and supply shocks at the farm level can be considered orthogonal to aggregate supply shocks.

I find that, on average, labor productivity is very inelastic with respect to piece rate wages, and I can reject even modest elasticities of up to 0.7. This finding contrasts with both canonical economic theory and previous structural estimates: relying on a calibrated structural model of worker effort, Paarsch and Shearer estimate a labor effort elasticity of 2.14 in the British Columbia tree-planting industry, and Haley estimates a labor effort elasticity of 1.51 in the U.S. midwest logging industry. Why, then, do blueberry pickers not seem to respond to changes in their wage? One explanation of my findings could be that blueberry pickers respond to average effective hourly wages rather than marginal piece rate wages, similar to how electricity consumers respond to average prices rather than marginal prices . This is unlikely, both because piece rate wages are highly salient in the context I study, and because my identification strategy specifically isolates marginal effects from average effects. Instead, I find suggestive evidence that blueberry pickers face some binding constraint on physical effort that is related to temperature. Specifically, I find that at moderate to hot temperatures, I cannot reject that the piece rate wage level has no effect on labor productivity. However, at temperatures below 60 degrees Fahrenheit , a one cent per pound increase in the piece rate wage increases worker productivity by nearly 0.3 pounds per hour, implying a positive and statistically significant productivity elasticity of approximately 1.6. In other words, blueberry pickers respond to the piece rate wage level at cool temperatures, but seem not to respond to changes in their wage at higher temperatures. Temperature also affects productivity directly in economically meaningful ways. Specifi- cally, I find that blueberry pickers’ productivity drops precipitously at very hot temperatures: workers are 12% less productive at temperatures above 100 degrees Fahrenheit than they are at temperatures between 80 and 85 degrees Fahrenheit . However, I also find negative effects at cool temperatures. Workers are nearly 17% less productive at temperatures below 60 degrees Fahrenheit than at temperatures in the low eighties. The most likely explanation of this finding is that berry pickers lose finger dexterity at cool temperatures and find it uncomfortable to maintain high levels of productivity. This hypothesis is supported by evidence from the ergonomics literature , and highlights that temperature’s effects on labor productivity depend on the particularities of the relevant production process. To demonstrate the robustness of my findings, I address several threats to my identification strategy. First, I investigate berry pickers’ labor supply on both the intensive and extensive margins. I show that neither temperature nor wages have a statistically significant effect on these measures. Next, I address the fact that there exists a minimum hourly wage rule in the setting I study. This constraint binds for approximately 15.8% of my observations, raising concerns that workers falling below this threshold have an incentive to shirk or “slack off.” I re-estimate my results using only those observations where workers earn more than the minimum wage and see no qualitative change in my findings. Finally, I confront the possibility of adverse selection in my sample by limiting my sample to only the observations from workers who work more than thirty days in a single season. My results highlight the importance of environmental conditions in outdoor industries. Previous studies have shown, and I confirm, that temperature affects labor productivity directly.However, I am the first to demonstrate that temperature also affects labor productivity indirectly by disrupting the economic relationship between wages and worker effort. As global temperatures rise, my findings suggest that firms in outdoor industries like agriculture and construction will have a reduced ability to effectively incentivize their employees’ productivity. This can have large economic consequences. In the $76 billion U.S. specialty crop sector, for instance, harvest labor can account for more than half a farm’s operating costs.This is also a setting where piece rate wages are common: in California alone, over 100,000 specialty crop farm workers were paid by piece rates in 2012.