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Marginal Productivity and the Demand for Labour

  • J. R. Hicks

Abstract

The theory of the determination of wages in a free market is simply a special case of the general theory of value. Wages are the price of labour; and thus, in the absence of control, they are determined, like all prices, by supply and demand. The need for a special theory of wages only arises because both the supply of labour, and the demand for it, and the way in which demand and supply interact on the labour market, have certain peculiar properties, which make it impossible to apply to labour the ordinary theory of commodity value without some further consideration.

Keywords

Labour Market Marginal Product Total Supply Normal Profit Full Equilibrium 
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Notes

  1. On this question of the relation of circulating capital to marginal productivity, see Barone, “Studi sulla distribuzione” (Giornale degli economisti 1896).Google Scholar
  2. 1.
    For a critical discussion of some current theories bearing on the subject-matter of this chapter, see my article, “Marginal Productivity and the Principle of Variation” (Economica, February, 1932). See also Valk, “The Principles of Wages”; Robertson, “Wage Grumbles” (in “Economic Fragments”) ; Schultz, “Marginal Productivity and the Pricing Process” (Journal of Political Economy, October, 1929);Google Scholar
  3. For a critical discussion of some current theories bearing on the subject-matter of this chapter, see my article, “Marginal Productivity and the Principle of Variation” (Economica, February, 1932). See also Valk, “The Principles of Wages”; Robertson, “Wage Grumbles” (in “Economic Fragments”); Schultz, “Marginal Productivity and the Pricing Process” (Journal of Political Economy, October, 1929); Schultz, “ Marginal Productivity and the Lausanne School” (Economica, August, 1932); and my reply to Professor Schultz in the same number of Economica.Google Scholar

Copyright information

© J. R. Hicks 1963

Authors and Affiliations

  • J. R. Hicks
    • 1
  1. 1.University of OxfordUK

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