Michael Perelman wrote:
just that the people who do the most essential [e.g. farmworkers] get the least while those who do less important work [hedge fund operators] get the most.
that's the paradox that John Elliot Cairnes (1823–75), an Irish economist and a follower of John Stuart Mill proposed a solution for. Smith's "compensating wage differentials" said that farmworkers should be paid more than (similarly skilled) financiers because the farmworkers toil harder under worse conditions. But that contradicted the reality (thus, the paradox). To Cairnes, there are "non-competing groups." The farmworkers and the financiers are in effect in completely different labor markets. It's only _within_ such markets that Smith's theory works reasonably well (in Cairnes' view). It's a predecessor of Clark Kerr's balkanized labor markets and later segmented labor market theory. [Cairnes also wrote THE SLAVE POWER, a political-economic critique of the US South. It made a big anti-slavery splash. In one US economic history textbook, he is described as "what would be called a Marxist today" (not a direct quote).] Jon Baranov presents his answer to the paradox:
1. The unequal structure of demand for various kinds of labor
2. Bargaining power - the inherent structure if the capitalist labor market 3. Social control - the cultural and institutional imperatives of capital 4. Different profit rares and accidental factors< the first is part of the segmented labor market hypothesis: wages, conditions, etc., depend not just on supply (individual characteristics) but also demand (firm and industry characteristics). the others need more explanation, at least for me. -- Jim Devine / "Young people who pretend to be wise to the ways of the world are mostly just cynics. Cynicism masquerades as wisdom, but it is the farthest thing from it, because cynics don't learn anything. Because cynicism is a self-imposed blindness, a rejection of the world because we are afraid it will hurt us or disappoint us." -- Stephen Colbert.
