WAGE DETERMINATION AND TRADE UNIONS: A REPLY
| Published date | 01 June 1974 |
| DOI | http://doi.org/10.1111/j.1467-9485.1974.tb00189.x |
| Author | B. Burkitt,R. K. Wilkinson |
| Date | 01 June 1974 |
Scotrish
Journal
of
Political
Economy
Vol.
XXI,
NO.
2,
June
1974
WAGE DETERMINATION
AND TRADE UNIONS: A REPLY
R.
K.
WILKINSON
AND
B.
BURKITT
The comment made
on
our paper is
concerned
with certain questions
of
detail but in general it appears to arise out
of
a
complete misunderstanding
of the argument. For this
reason
it would
be
useful to rsstate our argument
before dealing with the points
of
deta4.
The point
of
departure
was
the inconclusive nature
of
the debate
on
'
market versus power
'
forces.
This debate has gone
on
for
a
long time,
analyses
of
different levels
of
technical sophistication relating to samples
of
various types have been conducted
and
a
variety
of
contradictory evidence
has been advanced from both sides. At textbook level, wage theory con-
tinues to be taught
as
an extension and special case of the price
of
wmmd-
ties, and labour market institutions tend to
be
dealt with
in
separate chapters
and
are
regarded as
a
distorting inflvence
on
the natural
state
of
&airs.'
To
take the model
of
a
free
market a5 a
narm
is
unrealistic and shows
a
lack
of
understanding
of
the purpose
of
such models which
is
simply to assist
in
clarifying the interconnections among
certain
key variables. When
so
much
effort has
been
expended
to
suoh
small
effect one is entitled to ask whether
the purpose
of
the exercise is sensible,
to
query whether the right question
has been asked
or,
perhaps, whether the question has
been
framed
so
as to
make possible a sensible reply.
It
seems
to
us as relevant
to
ask
what distort-
ing
effects
banks have
on
interest
rates
or
i3m.s
on
@ts
as
it
is
to query
the effect
of
trade
unions
on
wages.
So
far
as we
are
aware monetary and
industrial
economists
have not attempted
to
answer these
two
rather futile
questions. We cannot agree therefore that our
paper
in
effect amounted to
saying that
'
there is much to
be
said on
both
sides
';
we
regard the ptula-
tion
of
these
two
sides
as
bogus.
Accordingly in Part
Two
of
our
article
we
attempted
to
reconcile the
'
market
'
and
'
power
'
approaches within the setting
of
a
unionised labur
market by exploring the
proposition
that trade unions attempt
to
defend and
improve the general standard
of
living
of
their members.
We
argued that
the wage rate is merely one
of
a
set
of
items which affects industrial and the
general well-being, whilst the power required to achieve union objectives
is
a multidimensional factor comprising and harnessing market forces (inter
alia) rather than standing independently
and
being
capable
of
acting
in
opposition to them.
It follows from this that, given we
can
measure the wage rate and union
power satisfactorily, the existence
of
any kind
of
a
correlation between them
1
It is interesting
to
note that
professional
students
of
labour
markets
tend
to
divide themselves into experts on industrial relations and experts on labour economics,
each group apparently convinced of the irrelevance
of
the
elforts
of
the Other.
181
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