Thirdly (this is usually stated as a limitation of the precision of
economic analysis), such a simple analysis of the action of the factor
of relative plenty or scarcity as has been given, takes no account of
the existence of certain human traits and qualities. As a matter of fact
each group or agent of production receives, not what it must receive,
but rather what it manages to secure in the higgling of the market.
Ignorance of the state of the market plays a part in distribution. A
sense of fairness plays a part, as when an employer pays wages higher
than are current because his business is prosperous. Anxiety plays a
part, as when the fear of unemployment leads a man to accept a wage
below that which he might have asked and secured if he had some money to
fall back upon.
Lastly, changes in distribution resulting from a change in the relative
plenty or scarcity of the various groups or agents of production may, in
turn, cause further changes in the actual state of plenty or scarcity;
or may bring about changes in any of the other forces which affect
distribution. For example, it is conceivable that an increase in men's
wages in certain industries (due, let us say, to an improvement in
productive methods) should be the cause of a withdrawal of a certain
amount of juvenile labor from employment in these industries. This
withdrawal might in turn lead to an increased demand in those industries
for adult labor, and so in turn affect the distributive situation. The
process of distribution is a process in which few changes can occur in
any direction, without these changes in their turn giving rise to
further changes.
Public-domain text, read in full here on John Shaqi.
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