Productivity of Labor and Wages Theory

The Productivity of Labor and the Theory of Wages

Incentives to Labor

The discussion of the question of why men work may lie more in the literature of psychology than in that of economics, but the fact is that economists have felt it necessary to make some as­sumptions on the question even though they have little scien­tifically established data. Many of the early economists wrote before psychology as a science was born and, in the absence of its present day findings, they made the best observations they could. The systems of economy, either real or fanciful, as proposed by Plato and Aristotle, take for granted that man will respond in certain ways when faced with certain conditions. Plato ex­pressed an ideal conception of man—almost a selfless ideal— when he asked man to merge himself with the state and accept his place in it according to some judgment outside himself. The communism of the Republic assumes such a perfect adjustment to life that each man in doing what he is best fitted to do ceases to be stimulated by personal ambitions. Plato was well aware of the selfish interests, not to say greed, which marked the ordi­nary life of Athens. Indeed, it is the disgust which he felt for such behavior that caused him to write the Republic.

Aristotle was more realistic, although, like Plato, he assumed the willingness upon the part of the ordinary man to become subordinated to the will of the state. He nevertheless opposed Plato's communistic state on the grounds that self-interest was more dependable than interest in the common good as an incen­tive to industry and care of property. He was sure that man would work more diligently to care for his own family than he would for persons whom he did not know. On one point Plato and Aristotle agreed. Certain economic pursuits, they claimed, were worthy, while others were unbecoming to a citizen. As of old, agriculture was a highly honored calling—not the actual tilling of the soil but the management of an estate. The occupa­tions of merchant, craftsman, and common laborer were only for foreigners, the poor, and slaves. In the organization of the ideal state each was to follow that for which he was best fitted, although it was not clear who was to do the selecting or how. Aristotle's defense of slavery is even more critical of the inherent abilities of individuals, for in his opinion some persons were born with a slave temperament. It was obvious that to work for one's living could never be respected in a society where the culture and education of its citizens were made possible by the toil of others.