ABSTRACT
This chapter represents an attempt to sketch some elements of a "sociological" theory of wages. An important element in organizing the impressions of the labor market gathered in this way is the set of institutional models of wage determination developed by labor economists in the 1940s and 1950s. The economy cannot operate without its skilled labor force, and the skilled labor force will not let it operate independently of the wage structure to which it has a customary and moral commitment. The wage structure must perform two economic functions. It must insure that the training process occurs, and it must allocate trained workers effectively so that their scarce skills are utilized. Institutionalization suggests two conclusions. First, that institutionalized rules are closely related to custom. Second, that the effect of building the informal social groups which generate custom into larger, more formal, institutions is to reconcile conflicts between customs and to make certain customs, at least, uniform throughout the economy.
