Full text: Brief von Fabio Petri an Kurt Rothschild

the reference here too?); b) above all, as you said, "it is not clear 
whether the real wage is determined by, or determines, the marginal 
product of labour". Here you mentioned two questions, efficiency 
wages (which I do know something about, and do not seem to me really 
to support your point), and wage changes affecting incentives to 
improve efficiency. The latter point was new to me and seemed 
particularly interesting, as potentially implying that the demand curve 
for labour is not sufficiently independent of the real wage and not 
sufficiently persistent in time to bear the weight that neoclassical 
theory puts upon it. Again, I would be most grateful if you could give 
me some references to works where this point is developed in greater 
Lastly, I would like to take this opportunity to try and be clearer 
on the comment I made in the discussion at the end of your lecture. 
What I wanted to say is this; I suspect that the fact, that wages don’t 
often fall in the face of unemployment, will be seen as a puzzle or not 
according as one believes that historically acceptable decreases of 
wages will significantly increase employment, or not. Adam Smith and 
Ricardo, who believed not, do not seem to have felt that why wages do 
not decrease in the presence of unemployment was a great puzzle. 
They took it for granted that the real wage would be prevented from 
falling indefinitely by social mechanisms of, ultimately, collective 
resistance of workers to a lowering of their living standards. To call 
such a collective resistance ’custom’ or ’habit’ is perhaps not wrong 
but is fundamentally misleading because it does not ask why the 
custom is maintained: my suggestion would be, because historical 
experience (going back to pre-capitalist peasant struggles) teaches the 
workers that a lowering of wages does not bring about improvements 
in employment, it only redistributes wealth to the rich. So, an 
important role is played by class consciousness, solidarity, and 
consciousness of the non-optimality of internal competition, things 
which disappear in notions such as ’custom’ or ’habit’. This teaching 
is not contradicted by strike breakers. Blacklegs, scabs are only able 
to take the place of other workers if and because the others refuse 
wage cuts: if the employed workers did accept wage cuts the moment 
the unemployed were ready to accept them, then the unemployed would 
remain unemployed and it would have been useless for them to propose 
to accept lower wages - if lower wages do not increase employment. It 
is then understandable that social control mechanisms should be 
devised to prevent or minimize blacklegging - it is more convenient for 

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