ABSTRACT
The whole of the advantages and disadvantages of the different employments of labour and stock must, in the same neighbourhood, be either equal or continually tending to equality. In the field of mainstream economics the prevailing labour market theory has been that of neo-classical theorists. This school of thought shared a continuity with classical economics linked to a common utilitarian approach and became strongly associated with marginalist theory. Turning to the supply of labour, under neo-classical assumptions individuals are assumed to be utility maximising and work is seen as a disutility, with individuals substituting the utility of leisure for work. During the past twenty years economists dissatisfied with orthodox theory have proposed different explanations of how labour markets operate. Some of the alternatives simply extend orthodoxy to include the effects of various institutional factors; others have explicitly sought a new paradigm. The chapter opened with a description and explanation of what were summarised as pro-market labour market theories.
