Full text: Brief von Fabio Petri an Kurt Rothschild

Dear Professor Rothschild, 
I made the mistake of not immediately looking for you for a talk 
on your lecture on wage theory at Trieste: I went on thinking about it, 
and when I finally looked for you, you had just left. I had been 
greatly stimulated by a number of remarks you made in the course of 
that lecture, and I would have liked to ask for some clarification and 
some references. If you have a typed version of your lecture with 
references, or if you are writing it, please let me have a copy. 
Otherwise, I would be most grateful if you could spare a few minutes 
to answer the queries - essentially about references - which I would 
have liked to pose to you in Trieste. 
I would like to know more on the empirical work (by Thurow, if I 
understood correctly) on the validity of the marginal productivity 
theory of wages at the firm level. Could you give me the reference 
for it? Also, were there attempts to reconcile those findings with 
neoclassical theory (like Machlup with Lester)? 
But the points which interested me most were those where you 
seemed to question the legitimacy itself of speaking of well-defined 
supply and demand functions for labour. 
You stated that "perhaps there is no proper supply function for 
labour". Your allusion to women and to immigrants seemed to refer to 
the fact that some people move in and out of the workforce with job 
availability. Am I then correct in understanding that you meant that 
historically the supply of labour adapts to the demand for it, so that it 
has no independent existence? (A similar observation has been 
advanced by P. Garegnani in his contribution to the Festschrift Essays 
on Sraffa edited by K. Bharadwaj and B. Schefold.) Could you give me 
some references to works where this point is developed in detail? 
If I understood you correctly, this undermines the possibility of 
meaningfully speaking of a real wage determined by the equilibrium 
between supply and demand, because supply is not sufficiently 
independent of demand. Is this point generally accepted among labour 
So all that is left is the possibility to say that the demand for 
labour, i.e. employment, is a decreasing function of the real wage, i.e. 
that a lower real wage would increase employment. But then your 
earlier criticisms of the demand curve become relevant: a) as argued 
by Joan Robinson, imperfect competition may mean that a higher real 
wage goes together with more employment (could you please give me 

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