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

The buyers r loss of their dominant position in the labor market has not 
been as straightforward and dramatic as the reversal of the price maker 1 s and 
price taker f s roles in the oil market, nor as simple as the enactment of 
farm-price support programs or minimum-wage legislation, which affects only 
a part of only the unskilled labor force# It began gradually, with the 
formation and increasing influence of unions; but the importance of that must 
not be exaggerated, because surprisingly enough, wages in the United States, 
where unions are weak and count only 15% of the labor force among their 
members, behave not very differently from the way they behave in Britain, 
lJ4.1V Ovty~ A* If 
where unions are strong and represent fetece- of the labor force* 
The main explanation, I think, of the employers 1 loss of their dominant 
position is the increased competitiveness of the labor market since modern 
mass communications have enabled every worker to know how his own wage 
relates to the wages of other workers with comparable skills in comparable 
occupations. That knowledge is bound to have increased labor mobility 
and with it labor’s elasticity of supply; but the main channel 
through which such knowledge renders the labor market more competitive 
is quite a different one. 
In an economy in which the division of labor has alienated most 
people from the final product of their work, they judge themselves 
and. society’s appreciation of themselves by the way their earnings \ 
compare to other people'* s earnings. That explains the well-established 
fact that most workers are much more concerned with the fairness of v 
their relative earnings than with absolute earnings or their real 
wage# ’’Emulation is dynamite# A group of workers who are convinced

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