EconPapers    
Economics at your fingertips  
 

The Classical Bargaining Model for Organized Labor

Mark Yanochik () and John King

Atlantic Economic Journal, 2015, vol. 43, issue 3, 375-382

Abstract: Classical economists believed that economic value, which is the basis for all discussions pertaining to markets and prices, was determined by the costs of the factors needed to produce the good in question. Economic expansion would require capitalists to pay higher wages to workers because of diminishing productivity in agricultural production, and, as wages rose, capitalist profits would necessarily fall. According to Ricardo, over time this process would lead society to an undesirable stationary state. John Stuart Mill’s extension of the classical labor theory of value provides for a theory of distribution that is separate from the fixed laws of production. Once the theories of production and distribution became disentangled, economists were able to envision ways to influence distributional outcomes that could alleviate the suffering of the majority of the population. We explore the classical labor theory of value and the implications it produces for a theory of distribution. In particular, we discuss Mill’s unique contribution to classical value theory and argue that Mill, through his economic argument in favor of organized labor, actually foresaw the modern literature on uncertainty and information. We illustrate this contribution by way of an example that captures the distributional gains that workers enjoy from repeated negotiations between unions and employers. Copyright International Atlantic Economic Society 2015

Keywords: Classical economics; Labor unions; Information; Bargaining; B12 Classical Economics; D83 Learning; J51 Trade Unions (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1007/s11293-015-9463-5 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:atlecj:v:43:y:2015:i:3:p:375-382

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11293/PS2

Access Statistics for this article

Atlantic Economic Journal is currently edited by Kathleen S. Virgo

More articles in Atlantic Economic Journal from Springer, International Atlantic Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-05-15
Handle: RePEc:kap:atlecj:v:43:y:2015:i:3:p:375-382