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Human physical and mental skills available to produce goods and services

Labor economics seeks to understand the functioning and dynamics of the markets for wage labor. In economics, labor is a measure of the work done by human beings. It is conventionally contrasted with such other factors of production as land and capital. There are theories which have developed a concept called human capital (referring to the skills that workers possess, not necessarily their actual work).

Notable Topics

  • Unemployment - The state of not being engaged in a gainful occupation
  • Wages - The price of labor, renumeration paid to employees for their work or services


Anarchism, by Voltairine de Cleyre, Free Society, 13 Oct 1901
Examines various economic propositions for anarchism (socialist, communist, individualist and mutualist) and opines that all could be tried out; reprinted in Selected Works of Voltairine de Cleyre (1914)
[I]n the old days of Master and Man–not so old but what many of the older workingmen can recall ..., the workshop was a fairly easy-going place where employer and employed worked together, knew no class feelings, chummed it out of hours, as a rule were not obliged to rush, and when they were, relied upon the principle of common interest and friendship ... for overtime assistance. The proportional profit on each man's labor may even have been ... higher, but the total amount possible to be undertaken by one employer was relatively so small that no tremendous aggregations of wealth could arise.
Becker, Gary S. (1930-2014), by Aaron Steelman, The Encyclopedia of Libertarianism, 15 Aug 2008
Biographical essay
Suppose one goes to college for 4 years to learn new skills and ultimately obtain a degree. There are often obvious costs involved, most significantly tuition. But there are less obvious costs, such as the time spent pursuing education—time that could have been spent in the labor market instead, thus earning wages. Individuals must assess whether the building of such skills will help them enough over their lifetimes—through improved earnings as well as cultural and other nonmonetary gains—to more than offset the time and effort spent acquiring them. This idea is now one of the most standard in labor economics ...
Related Topics: Gary Becker, Children
Benjamin Tucker, Individualism, & Liberty: Not the Daughter but the Mother of Order, by Wendy McElroy, Literature of Liberty, 1981
Bibliographical essay covering the people and radical movements that influenced Tucker in his founding and publishing of Liberty, its major themes and contributors
The [New England Labor Reform] League was a broad reform alliance formed in 1869 by a group including [Josiah] Warren, [Stephen Pearl] Andrews, [Ezra] Heywood, and Wendell Phillips. It presented an anti-statist, anti-monopoly, anti-corporation philosophy, with a strong emphasis on the labor theory of value. The League's favored strategy was boycott, the strategy of last resort at Warren's Modern Times. The League also took a keen interest in monetary theory, viewing the monopoly of money as a primary means by which the privileged rich profited from the laborer.
The Brilliance of Turgot, by Murray N. Rothbard, Apr 1986
Biography and review of Turgot's major writings; introduction to The Turgot Collection (2011), edited by David Gordon
Seeing that advances of savings to factors of production are a key to investment, and that this process is only developed in a money economy, Turgot then proceeded to a crucial Austrian point: since money and capital advances are indispensable to all enterprises, laborers are therefore willing to pay capitalists a discount out of production for the service of having money paid them in advance of future revenue. In short, that the interest return on investment is the payment by laborers to the capitalists for the function of advancing them present money so that they do not have to wait ...
The Chavez Tragedy, by Sheldon Richman, Freedom Daily, Mar 2001
Comments on the disclosure that Linda Chavez, nominee for U.S. Secretary of Labor, had harbored an "illegal alien" and perhaps employed her to do household chores
Notice how [the media] accept without question the association of the minimum wage and the welfare of low-income workers. To be against the minimum wage is to be "anti-worker." ... The New York Times editorialized that Chavez's conduct "cast doubt on [her] ability to oversee the core function of the Labor Department, which is to define what work is and how it should be compensated." Does the Times realize what it is saying? Every socialist, communist, and fascist regime has tried to do just that. The results for working people were something less than satisfactory.
Fear Not China, by Sheldon Richman, 8 Jun 2005
Counsels Americans not to be afraid of China's economic activities, debunking concerns over "job losses" and the trade deficit
[N]ow it is an economic fear: ... China will make all the textiles and clothing and take our jobs ... The success of the Chinese sellers and their American customers, we're told, is really not good news. Why not? Because Americans are losing their jobs ... A highly advanced economy always is—and always should be—losing some jobs. They are replaced by technology in some cases, by cheaper lower-skilled foreign labor in others. This is progress, because new and higher-paying jobs take their place. In 1905 lots more people were growing food than are today. Were we better off then?
Related Topics: China, Free trade
Frédéric Bastiat and Subjective Marginal Utility, by Sheldon Richman, The Goal Is Freedom, 2 Aug 2013
After discussing marginal utility as presented by Menger and the Austrian school, examines how Bastiat anticipated many of the same concepts in his writings
Bastiat goes on:
Value does not necessarily imply labor; even less is it necessarily proportional to labor ... [V]alue is based less on the pains taken by the one who surrenders what is exchanged than on the pains spared the recipient [emphasis added], and ... I attributed it to something that includes both elements: service ... [A] very minor service can be rendered with great effort ... [L]abor does not necessarily receive a remuneration that is always proportional to its intensity, either in the case of the man living in isolation or in that of the man living in society.
The French Employment Fiasco, by Llewellyn H. Rockwell, Jr., Mises Daily, 11 Apr 2006
Discusses the business and labor situation in France where a 2006 law deregulating job contracts led to protests and a repeal of the law
French business has responded in two ways: refusing to hire new people or hiring them only on a short-term basis. The problem ... is another regulation that forbids the temporary employment contract to be used as a means of hiring those who are really permanent ... These kinds of practices ... have acculturated French workers into misunderstanding the nature of the labor contract. In a free market it is a mutually beneficial exchange like any other ... between a buyer and a seller. Both come to the bargaining table with equal power and they only make the exchange if both sides expect to benefit.
Related Topics: France, Free Market, Unemployment
Government, by James Mill, Encyclopædia Britannica, 1820
Discusses the purpose of government, the means for attaining that end and various related questions and objections; rationalises that representative democracy, as exhibited in early 19th century Britain, is most conducive to "good Government"
Of the laws of nature, on which the condition of man depends, that which is attended with the greatest number of consequences, is the necessity of labour for obtaining the means of subsistence, as well as ... the greatest part of our pleasures ... The other mode of obtaining labour is by allurement, or the advantage which it brings. To obtain all the objects of desire in the greatest possible quantity, we must obtain labour in the greatest possible quantity; and, to obtain labour in the greatest possible quantity, we must raise to the greatest possible height the advantage attached to labour.
The Great Lie of Modern Unions, by Wendy McElroy, 31 Oct 2013
Details the history of labor organizing, from the Knights of Labor in 1869 to the 1935 Wagner Act
Prior to the modern union, labor organizations had a marked tendency toward decentralization. ... Labor movements flourished in every niche of America. ... As a massive and diverse network of labor movements grew in power, the threat to entrenched political interests also swelled. In 1877 and 1894, two massive railroad strikes dramatically illustrated that threat. The Great Railroad Strike lasted 45 days and the Pullman Strike eventually involved about 250,000 workers in 27 states. Troops were needed to break the strikes ... But nothing seemed to slow the pace of voluntary labor organizations.
Related Topics: Monopoly, Unemployment, World War I
How Much Do You Know About Liberty? (a quiz), The Freeman, Jun 1996
A 20-question quiz (with answers) on various topics related to liberty in the history of the United States
13. Name three New Deal policies that destroyed American jobs. ... The New Deal destroyed jobs by increasing taxes for a variety of spending schemes ... Other New Deal job destroyers: National Industrial Recovery Act (1933), which established cartels to restrict production and hence employment; the Wagner Act (1935) which enabled unions to expand their power and get higher wages, thereby reducing the number of jobs employers could afford; ... Fair Labor Standards Act (1935) which made it illegal for employers to hire people who added less value than a minimum wage.
How to Help Fast-Food Workers, by Sheldon Richman, 1 Aug 2013
Discusses contemporaneous strikes by fast food workers seeking a doubling of the minimum wage, the economic realities behind wages and alternatives that would truly help the workers
Couldn't a restaurant raise prices to cover the higher wages? It could try, but this would drive away customers ... If they all raised prices, people would eat at home instead. What happens to the jobs then? ... On first glance, someone working at a fast-food restaurant seems to have alternatives. McDonald's faces competition from Burger King, Wendy's, and more. Low-skilled jobs can also be found in other kinds of businesses, such as Walmart. The problem is that the demand for such labor is more than matched by the supply. That's the thing about low-skilled work: lots of people can do it ...
The Idea of Liberty is Western, by Ludwig von Mises, American Affairs, Oct 1950
Argues that the "idea of liberty is and has always been peculiar to the West", beginning in ancient Greece and moving westward to Europe and America, and discusses "liberty" as viewed by Harold Laski, contrasting life under Stalin with Italy under fascism
The outcome of ... business activities depends alone on the conduct of the consumers ... Neither does the wage earner depend on the employer's arbitrariness. An entrepreneur who fails to hire those workers who are best fitted for the job ... and to pay them enough to prevent them from taking another job is penalized by a reduction of net revenue. The employer does not grant to his employees a favor. He hires them as an indispensable means for the success of his business in the same way in which he buys raw materials and factory equipment. The worker is free to find the employment which suits him best.
I, Pencil: My Family Tree as told to LEONARD E. READ, by Leonard Read, The Freeman, Dec 1958
Read's most famous essay; resource page at FEE website includes PDF, MOBI and ePub versions, and MP3 recording; 2019 version with introduction (2015) by Lawrence W. Reed and afterword by Milton Friedman (previously the introduction, 1999 version)
Think of all the persons and the numberless skills that went into their fabrication ... [U]ntold thousands of persons had a hand in every cup of coffee the loggers drink! ... Sweepers in the mill among my ancestors? Yes ... Consider these miners and those who make their many tools ... and those who put them aboard ships ... Even the lighthouse keepers along the way assisted in my birth—and the harbor pilots ... From the standpoint of know-how the only difference between the miner of graphite in Ceylon and the logger in Oregon is in the type of know-how. Neither the miner nor the logger can be dispensed with ...
The Labor Theory of Value (An Analysis), by Donald C. Ernsberger, Jarret Wollstein (editor), 1988
Examines Marx's Labor Theory of Value, including an example, and compares it to the market-exchange theory, exploring some of the flaws in the former
Karl Marx's labor theory of value asserts that the value of an object is solely a result of the labor expended to produce it. According to this theory, the more labor or labor time that goes into an object, the more it is worth. Marx defined value as "consumed labor time", and stated that "all goods, considered economically, are only the product of labor and cost nothing except labor". The labor theory of value is ... the basis of his analysis of the free market. If it is correct, then much of Marx's critique of capitalism is also correct. But if it is false, virtually all of Marx's economic theory is wrong.
Letters to Mr. Malthus, on Several Subjects of Political Economy, and on the Cause of the Stagnation of Commerce, by Jean-Baptiste Say, 1820
Full title: Lettres à M. Malthus, sur différens sujets d'économie politique, notamment sur les causes de la stagnation générale du commerce
Series of five letters from Say to Malthus, written in response to the latter's criticisms in Principles of Political Economy (1820); the letters were translated from the French by John Richter
Hitherto no inconvenience has been known to arise from the invention of corn-mills; and their beneficial operation is seen in the diminished price of produce ... But it is said that this increase of income obtained by the consumers, is taken from the profits of the nineteen unfortunate persons whom the mill has deprived of employment. This I deny. The nineteen labourers retain the possession of their industrious faculties, with the same strength, the same capacity, the same means of working, as before. The mill does not place them under the necessity of remaining without occupation ...
Libertarianism: Left or Right?, by Sheldon Richman, Freedom Daily, Jun 2007
Examines the origin of the political terms "left" and "right" and makes the case that libertarianism is "planted squarely on the Left"
"Capitalism" was identified with state privileges for owners of capital to the detriment of workers, and hence was despised as an exploitative system. Interventions such as taxes, regulations, subsidies, tariffs, licensing, and land policy restricted competition and hence limited the demand for labor as well as opportunities for self-employment. Such measures reduced labor's bargaining power and depressed wages, which for the Left libertarians constituted state-sponsored plunder. Their solution was a thoroughgoing laissez faire, freeing competition and maximizing workers' bargaining power.
The Life, Death, and Resurrection of an Economy, by Michael C. Monson, The Freeman, May 1993
Lengthy economic history of Argentina, from the time of the conquistadors to the early 1990's, highlighting the outstanding growth in the 19th and early 20th century and the economic nationalism and government interventions in the 20th century
Precursors of [the] decline [of the Argentine economy] began to appear during the Irigoyen administration which took office in 1916 ... Legislation was passed controlling hours of work, setting minimum wages, and otherwise "protecting" workers. Now that the government was taking care of them, a law was also passed penalizing strikes ... As Secretary of Labor, [one man] began in 1944 to pour forth a torrent of enactments mandating improvements in workers' pay, vacations, pensions, and housing ... In 1946 this man, Juan Perón, became President.
Lincoln-Worship Overlays the Corporatist Agenda, by Kevin Carson, Future of Freedom, Mar 2014
Review of Rich Lowry's Lincoln Unbound: How an Ambitious Young Railsplitter Saved the American Dream—and How We Can Do It Again (2013)
And despite Lincoln's quite genuine belief in the fundamental right to eat the bread one has produced by his own hand, the corporate economy his Whig agenda gave rise to is more a transgression than a fulfillment of the sentiments he expressed here:
[It] has so happened in all ages of the world, that some have labored, and others have, without labour, enjoyed a large proportion of the fruits. This is wrong, and should not continue. To [secure] each labourer the whole product of his labour, or as nearly as possible, is a most worthy object of any good government.
Lysander Spooner (1808-1887) and Foreign Policy, by Joseph R. Stromberg, 8 May 2000
Begins wih biographical summary and then delves into Spooner's views on slavery, the U.S. Constitution and the War Between the States
[Spooner] drew some conclusions in his essay, Poverty: Its Illegal Causes and Legal Cure (1846): "Nearly all the positive legislation ... passed in this country, either on the part of the general or state governments, touching men's rights to labor, or their rights to the fruits of their labor ... has been merely an attempt to substitute arbitrary for natural laws; to abolish men's natural rights ... and in their place establish monopolies and privileges; ... in short, to rob one portion of mankind of their labor, or the fruits of their labor, and give the plunder to the other portion."
Menger, Carl (1840-1921), by Lawrence H. White, The Encyclopedia of Libertarianism, 15 Aug 2008
Biographical and bibliographical essay
The marginal-utility theorists overthrew the prevailing "labor theory of value," according to which commodities receive their market value (or price) from the labor costs needed for their production. Menger emphasized that the creation of value in fact ran the opposite way: Labor services and other inputs are valued only insofar as they are expected to produce valuable consumer goods. Consumer goods have market value only insofar as consumers expect them to satisfy wants that are subjectively important. Menger's subjective value theory thus demolished the notion that labor bestows value ...
Related Topics: Carl Menger, Money
Objectivist Ethics in the Information-Age Economy, by Nathaniel Branden, Navigator, Feb 2001
After reviewing human progress, from hunter to farmer to laborer to thinker, argues that what he calls "Objectivist ethics" are more relevant to current society
The United States has shifted from a manufacturing society to an information society. Mind work has replaced physical labor as the dominant employee activity ... Specifically, these developments ask us to bring a greater capacity for innovation, self-management, and personal responsibility—a higher level of consciousness and rationality—to our work activities ... It is asked at every level of a business enterprise, from senior management to first-line supervisor, and even to entry-level personnel ... I have to tell you about ... the history of work, as it has evolved over the centuries.
On Equality and Inequality, by Ludwig von Mises, Modern Age, 1961
Examines the premise that "all men are created equal" and some possible as well as purported conclusions
What has multiplied the "productivity of labor" is not some degree of effort on the part of manual workers, but the accumulation of capital by the savers and its reasonable employment ... Man could not survive as a human being without manual labor. However, what elevates him above the beasts is not manual labor and the performance of routine jobs, but speculation, foresight that provides for the ... future. The characteristic mark of production is that it is behavior directed by the mind. This fact cannot be conjured away by a semantics for which the word "labor" signifies only manual labor.
Our Secret Desires: Why we end up with trade barriers, by Frédéric Bastiat, 1848
Originally "Abondance, Disette" (Abundance, Scarcity), an essay in Economic Sophisms, translated in 1964 by Arthur Goddard; published in Reason March 1989
[A solitary man] would easily understand that labor is not an end in itself, but a means, and that it would be absurd to reject the end for fear of doing injury to the means. He would understand, too, that if he devotes two hours of the day to providing for his needs, any circumstance (machinery, the fertility of the soil, ... no matter what) that saves him an hour of his labor, so long as the product is as great, puts that hour at his disposal and that he can devote it to improving his well-being. He would understand, in short, that a saving in labor is nothing else than progress.
Related Topics: Free trade, Money, Prices
Protectionism and Unemployment, by Hans F. Sennholz, The Freeman, Mar 1985
Discusses why foreign and domestic trade are both beneficial, mercantilism and neo-mercantilism, the groups wanting tariffs and protectionism, the effects of trade restrictions on labor, the factors affecting industry competitiveness and more
The labor movement in the U.S. closely resembles the workers' rights movements in the European welfare states. They both expound the doctrine that workers have an inherent right to a job, in their particular industry, at their present location and at rates of pay that exceed the market rates. To secure their right, government is expected to restrain foreign competition in any possible way and, if needed, subsidize both labor and capital. In this respect, protectionism is a symptom of relatively weak national governments catering to powerful domestic interest groups, especially labor.
Roots Of Economic Understanding, by F. A. Harper, Ideas on Liberty, Nov 1955
Explains the rudiments of economics by specifying required attributes (desirability, scarcity, exchangeability) then delving into how people, from the earliest age, become cognizant of economic concepts, but ending with criticism of econmic ignorance
Are you exchangeable or capable of being traded? Yes ... [T]he person who owns himself as a free man may offer to serve another; he may offer his time and effort in exchange for a wage. Or, instead of offering his services for hire, a person may work for himself and offer for sale whatever he has produced. So in making yourself available for trade in the form of little pieces of your time, your effort and your life, the third and final requirement ... has been fulfilled. You are not only desired and scarce, but you are capable of being traded as well.
Speaking to Nonlibertarians, by Sheldon Richman, The Goal Is Freedom, 11 Jul 2014
Suggests an approach by which libertarians can try to persuade others of the undesirability of government-provided services and the benefits of free markets
The same goes for workers who worry about their vulnerability to arbitrary dismissal or onerous demands ... [L]ibertarians do not look askance at individuals who sign contracts specifying the conditions, including the term, of employment. The quest for some certainty about such things seems reasonable ... [M]ost people would prefer not to be in a position in which they could lose their jobs without notice because the boss had a bad day ... [T]he government's central bank is in the habit of generating bubbles and consequent busts, which can bring long-term layoffs and permanent unemployment ...
The State Is No Friend of the Worker, by Sheldon Richman, The Goal Is Freedom, 24 Oct 2014
Discusses how the state interferes with setting wage rates and quotes Thomas Hodgskin on how to reward workers properly
[Hodgskin] wrote,
... Almost any product of art and skill is the result of joint and combined labour ... In the manufacture of a piece of cloth, the spinner, the weaver, the bleacher and the dyer are all different persons. All of them except the first is dependent for his supply of materials on him, and of what use would his thread be unless the others took it from him, and each performed that part of the task which is necessary to complete the cloth? ... Wherever the division of labour is introduced, ... there is no longer any thing which we can call the natural reward of individual labour ...
Thank You ... for a Free Market, by Jacob G. Hornberger, 30 Jun 2006
Explains why so often both parties to a commercial transaction express gratitude toward the other
The theory of subjective value applies not only to the purchase of goods but to all economic transactions, including employment contracts. When an employer and an employee enter into an employment agreement, there is no winner and loser, but instead two winners. The employer is giving up something he values less (the money he's paying the employee) for something he values more (the employee's labor). By the same token, the employee is giving up something he values less (his time and energy) for something he values more (the money).
Related Topic: Free Market
Wages, by Ludwig von Mises, Human Action, 1949
Chapter 21 "Work and Wages", section 3; discusses labor, wages, how are wages determined and erroneus attacks on that explanation
Man deals with other people's labor in the same way that he deals with all scarce material factors of production. ... Labor is very different in quality, and each kind of labor renders specific services. each is appraised as a complementary factor for turning out definite consumers' goods and services. ... But indirectly each sector of the labor market is connected with all other sectors.
Related Topics: Entrepreneurship, Wages
Wants, Efforts, Satisfactions, by Frédéric Bastiat, Economic Harmonies, 1850
Examines the concepts of sensation, pain, wants, satisfactions and connects them by the concepts of activity or human effort to postulate that the exchange of services in a social framework are what constitute the science of economics
[I]t is not in wants or in satisfactions, ... but in the nature of the middle term, human effort, that we must seek the social principle, the origin of political economy. It is, in fact, precisely this faculty of working for one another, which is given to mankind and only to mankind, this transfer of efforts, this exchange of services, with all the infinitely complicated combinations of which it is susceptible in time and space, that constitutes the science of economics, demonstrates its origins, and determines its limits.
Related Topics: Children, Economics, France, Metaphysics
What Is the Enemy?, by Sheldon Richman, Freedom Daily, Apr 2006
Discusses why corporatism, also known as state capitalism or political capitalism, is the "the great institutional threat to liberty"
While some business leaders objected to the final form of the Wagner [National Labor Relations] Act, they had for years supported pro-union laws through social-reform organizations ... Why would they support such laws? They were an effective way to abolish decentralized "wildcat" labor action and to diminish radical influences such as the International Workers of the World (Wobblies), which had plagued business previously. National legislation would bring "responsible" labor leaders to the conference table (as junior partners, of course), integrate them ... and use them to police their own ranks.
William Harold Hutt (1899-1988): A Biographical Essay from an Austrian Perspective, by John B. Egger
Biographical and bibliographical essay
Perhaps partly because his father had been a journeyman printer of modest income, the use of economic theory to understand the wages and employment of labor was one of Hutt's lifelong primary concerns. This short book ... disputed prevailing beliefs that labor was at a "disadvantage" and that the labor market was inherently a bilateral monopoly that left the wage rate "indeterminate." Peppered with quotes from British and American economists from Adam Smith onward, Hutt sought to correct others' views of the classical tradition, to contribute to it, and to offer practical advice on governments' labor policies.
Work!, by Sheldon Richman, The Goal Is Freedom, 7 Mar 2014
Contrasts the "gospel of work" and "joy of labor" espoused by moralists and state socialists with the views of economists such as Adam Smith, Bastiat, John Stuart Mill, Mises and Rothbard
From the start, Americans have had a love-hate relationship with work. We tend to rhapsodize about labor ... The message was that work is not just an honest and proper way to obtain the necessities of life without mooching off others ... the moralists were joined in their labor evangelism by employers, who needed uncomplaining workers willing to spend long hours in unpleasant factories ... We get a different picture of labor from the economists ... It follows that the penchant for economizing effort — the preference for leisure — is a beneficent feature of human nature.


Forbidden Grounds: The Case Against Employment Discrimination Laws
    by Richard Epstein, 1992
Contents: Introduction: Consensus and its Perils - Analytical Foundations - History - Race Discrimination - Sex Discrimination - Affirmative Action - Newer Forbidden Grounds - Conclusion: Symbols and Substance
Free Choice for Workers: A History of the Right to Work Movement
    by George Leef, Sep 2005
Partial contents: How Compulsory Unionism Invaded the Land of the Free - Right to Work Laws and the Origin of the National Right to Work Committee - Preventing Labor Law "Reform" - The (Big Labor) Empire Strikes Back - Looking Back, Looking Ahead

The introductory paragraph uses material from the Wikipedia article "Labour economics" as of 13 Jul 2018, which is released under the Creative Commons Attribution-Share-Alike License 3.0.