Retrieving "Wage" from the archives

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1. Classical Theory

   Linked via "wages"

   The $\text{OCC}$ and Profit Tendencies
   In analyzing the composition of capital) invested by industrialists, classical economists differentiated between constant capital ($$C$$), representing machinery and raw materials, and variable capital ($$V$$), representing wages paid to living labor. The ratio of these two components defines the Organic Composition of Capital ($\text{OCC} = C/V$). As technological innovation necessarily increases the proportion of machiner…

2. Classical Theory

   Linked via "wages"

   The Iron Law of Wages
   Under the influence of Malthus, David Ricardo formalized a view on wages wherein the long-run market rate tends towards the subsistence level. This Iron Law of Wages posits that any temporary increase in wages above subsistence level invariably triggers an increase in population growth, which in turn expands the labor supply, eventually…

3. Henry Ford

   Linked via "wage"

   In 1914, Ford stunned the industrial world by unilaterally increasing the minimum daily wage for his factory workers to $\$5.00$, doubling the prevailing rate. This policy was not purely altruistic; it was intrinsically linked to his manufacturing goals. Ford referred to this as the "Sociological Policy," designed to reduce crippling labor turnover and ensure that his [employees](/…