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

5.20 
that they are entitled to 'parity' with another group, raay be ready 
to fight for it with sacrifices they would not otherwise dream of 
making. That seems irrational, but in a society where people judge 
themselves and others by how much they are paid, 'nfair' pay is a 
standing insult." ((A. Tylecote, op.cit. p.84.)) 
His relative earnings also affect the typical worker's morale and 
greatly influence his productivity whenever productivity is variable 
and depends on the worker's application and state of mind. That is 
generally the case in occupations that utilize not only the worker's 
muscle power but his skill, judgement, carefulness and sense of 
responsibility as well. Modern technology has greatly increased 
the demand for those qualities in the x^orker and so has greatly 
contributed to rendering the labor market more competitive. 
For an increasing amount of evidence shows that productivity 
depends very greatly on the worker's perception of how fairly he 
is treated and remunerated. That makes his output an increasing 
function of his wage, especially when that is below comparable 
workers' wages. Once his employer recognizes that fact, he not 
only finds himself facing a much more elastic supply curve of labor but 
becomes a price taker in all but name. In the United States at any rate, 
where the unionized sector is small, that seems to be the only way to explain 
the general rise in wages that appears to be very little influenced by 
differences in the availability of unemployed labor. I am now ready to 
deal with the Japanese exception, which is attributed to the special way 
in which they pay their ’workers.
	        

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