The fiscal authorities coordinate on the ‘labor leg’ of the Leontief
production function in a firm optimization problem. The ‘government
production function’ complements labor in the ‘private’ production
function. The monetary authorities, à la the theory of the monetary
circuit, directly or through the mediation of banks underwrite the
employment contract. In an alternative scenario, workers are
self-employed entrepreneurs. We compare and contrast the relationships
in the former model with the atomistic market of the latter.