Max Sawicky wrote
> >Can someone recommend a thorough but introductory chapter on the
> >neo-classical theory of labor market equilibrium? I always find myself
> >stalled at the first assumption, that if prices or quantities of the
> >goods produced rise then wages rise (because demand for labor rises) in
> >a proportional amount. . . .
> This is a macro result. You want a mainstream macro text.
All the mainstream macro texts I've seen treat the labor demand curve as if it were any other demand curve, without a word addressing its special character, namely that the sellers have to sell, no matter what the price. Do bourgeois economists have a justification for why they think, in a pure competition world, that workers' wages are equal to their marginal productivity? And so that when productivity rises, or the price of goods rises, wages rise? Do they think assume there are less workers than there are jobs and that capital is forced to bid up wages to that point? And if so, is there any theoretical ground for why this is a decent heuristic assumption? As opposed to, say the opposite assumption, that there are more workers than jobs, and that wages are bid down towards the "marginal cost of production of a worker" (plus social faux frais) as Marx might have put it?
Michael
__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com