Science Fair Project Encyclopedia
Iron law of wages
The iron law of wages declares that wages can never rise above the minimum requisite to keep the laborer in bare existence as a laborer. Any increase in wages above this height will lead to an increase in population, and then the competition of increased numbers for employment will force wages down again to the minimum.
Ludwig von Mises argues that if one adopts its reasoning in order to demonstrate that in the long run no rise in the average wage rate above the minimum is possible, one must also imply that no fall in the average rate can occur.
The title of a pamphlet published in 1817 by the classical economist David Ricardo, it was later adopted by Karl Marx and influenced his early pessimistic views about the possibility of workers benefiting from capitalism.
- Money, Method, and the Market Process, Ludwig von Mises, 1967, verified 2005-04-01
The contents of this article is licensed from www.wikipedia.org under the GNU Free Documentation License. Click here to see the transparent copy and copyright details