On 2011-07-19, at 10:52 AM, Michael Pollak wrote:
> One of Michael Perelman's best passages IMHO is his "Appendix on Prices," pp. 62-65 of his first book _Farming For Profit In A Hungry World_ where he sums up the point of Sraffa in 3 pages and presents it as something that would interest you: that prices don't measure scarcity. (And instead measure "what Marx termed 'the respective powers of the combatants.'")
In the labour market, the price of labour reflects both supply and demand and "the respective powers of the combatants". The two factors are intertwined; the former affects the latter. When there is a demand for labour, when it is more difficult for employers to recruit and retain workers, the bargaining power of workers is strengthened, and the price of their labour-power rises. At times or in industries where there is little demand for their labour, the opposite holds true.