Price Takers' Plenty in a Model of Pure Capitalism.

Scitovsky, Tibor

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Document type:: Collected items

Collection:: Josef Steindl Collection

Title:: Price Takers' Plenty in a Model of Pure Capitalism.

Author:: Scitovsky, Tibor

Scope:: Kopie eines Typoskripts, 27 Blätter, mit handschriftlicher Korrektur und Korrektur mit Korrekturfolie, Paginierung von 5.1-5.20 und von 3.21-3.26

Year of publication:: 1983

Source material date:: [November 1983]

Language:: English

Note:: Draft.

Related work:: Scitovsky, Tibor: Pricetakers' Plenty: A Neglected Benefit of Capitalism. In: Kyklos, Dec 1985, Vol. 38 Issue 4, S. 517-516

JEL Classification:: D41 [Market Structure, Pricing, and Design: Perfect Competition]

Shelfmark:: S/M.33.7

Access:: Free access

I S.IH- The Conditions of a Workers* Paradise. Let me now take up the question of labor's counterpart to a buyers' market for products. Besides providing him with flexibility in responding to an increased availability of labor or a fall in sales, the price .maker's excess demand for labor can also make it profitable for him to engage in nonwage competition and so create a sellers' market for labor. After all, if he can profitably employ extra workers who take the initiative to ask for work, it must be almost as profitable for him to persuade additional workers to ask for work, provided that the cost of persuading them is less than the cost of offering them higher wages. Pleasant working conditions, medical facilities, pension plans, cheap housing, the provision of limited job security and similar fringe benefits are as many examples of such means of persuasion,; (The higher-than- stanaard wage for overtime work is the labor-market counterpart oef special sales and discounted prices^ In the U.S., firms in non-unionized industries often use fringe benefits as a means to attract good workers, though it is often inter preted as a ruse to take the wind out of the sails of union organizers. In a country where a mere 13% of the labor force is unionized, that is not a very convincing explanation. There are several other explanations, one of them being that such firms find it more profitable to attract J additional workers by the offer of fringe benefits than by raising wages.

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