1. Tobias Kronenberg 20-Mar-08 at 10:17 am

    I do not agree with your claim that “Markets are voluntary: so in a market you make a deal you think is OK”. There is one big exception: The labor market. If you want to earn a living, you are forced to enter that market – in this case the word “forced” is not hyperbolic. It’s either work or starve. And that is where power comes into play, because large employers simply have more bargaining power than unskilled workers. This is where fairness breaks down, and one participant can indeed force an unfair deal on the other. If you are a Marxist, you call this exploitation.

    I think the labor market is probably the most important market for 95% of the people, and since it’s a market with great asymmetries in bargaining power, it’s an inefficient market. Therefore, lots of regulations and interventions are needed to improve the bargaining power of workers and strengthening their rights.

    Also, one may wonder whether it is ethical at all to treat human labor as a commodity. Maybe humans in the future will look back at the 21st century with disgust, just as we look at 19th century slavery.

  2. Deirdre McCloskey 21-Mar-08 at 2:43 pm

    But you can work for someone else, and so it is a mistake to say that wage work is “slavery.” That’s why “bargaining power” is meaningless, or near to it. If I can work for another university my dean cannot abuse me—well, I see your point there! Seriously, if there was one national university, and if I could not go work for a newspaper or an insurance compnay, but was indentured to the One University, then I would be a slave. Otherwise, not. How do I know we’re not slaves? Because we have grown by historical and international standards rich. Competition in the labor market does force employers to treat us as free people, not literal slaves. As a result the improvements in the capitalist engine have indeed been shared with you and me, the workers.

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