ABSTRACT
Firms recruit and dismiss workers according to their needs. Similar workers are paid rather similar wages whoever employs them. Despite imperfections, therefore, it seems reasonable to measure labour in efficiency units, weighting each type by its wage rate, assumed to reflect its marginal productivity. Buildings and machinery are less easily shunted around. Once firms have them they are pretty well stuck with them, so they do not buy more just to meet a temporary demand. At any point of time, therefore, there is little reason to expect that the efficiency price of a certain sort of lathe, for instance, will be the same wherever it is used.
