Duncan wrote:
> Neoclassical economists almost universally interpret the word
> "exploitation" in economic terms to refer to cases where labor is paid
less
> than its marginal product. Marx clearly uses it to refer to the
> (effectively universal) case where labor is paid less than its average
> product. There was in the thirties and forties a bit of a literature
> pointing out that marginal productivity factor prices had no claim to
being
> fair or just (I think Scitovsky writes about this in his book, and I
think
> Will Baumol makes this point, too.)
This differs from my experience of neoclassical economics: a wage equal to
the value of the marginal product of labour is argued for only on
'efficiency' grounds, while 'fairness' and 'justice' are relegated to the
realm of 'equity'. Equity issues rarely get a look in at the micro-level;
and 'exploitation' is largely confined to what producers do to consumers
when they exercise market power. Perhaps I was just lucky with my teachers,
but when, for example, learning about (what was then called the 'New')
welfare economics I remember being told that J B Clark was probably the
last eminent economist to believe that competitive market outcomes could be
justified as just as well as efficient. This is made quite explicit in
bourgeois political philosophy (such as Goodin, 1985, Feinberg, 1970, or
Rawls, 1971) who - in their defence of the welfare state, all argue in
their own way that economic incentives seen as necessary bribes to invoke
economically efficient action thereby cannot manifest any moral notion of
just desert. Even that doyen of radical liberalism (and scourge of the
welfare state), Hayek (1960, *The Constitution of Liberty* RKP: 70-1),
argues that free markets give people neither what they *deserve* nor what
they *need*, but only what is required to induce them to contribute, to an
efficient extent, to economic activities.
Michael
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Dr Michael Williams
"Books are Weapons"
Department of Economics Home:
School of Social Sciences 26 Glenwood Avenue
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email: mwilliam@dmu.ac.uk mwilliam@compuserve.com