==================== HES POSTING ====================
On Sun, 6 Oct 1996 11:46:31 MDT "C.N.Gomersall"
<[log in to unmask]> wrote:
> Now, I'm going to suppose that the "default" view of wages over the
> centuries (the "common sense" view, if you like) has been to see them in
> what we would call nominal, or money, terms. You received x drachmae, or y
> denarii, and that was your wage, period.
>
> Then along came Smith (and others mentioned by Ross Emmett and Tony Brewer)
> and, if Paul is right, they told us that what is *important* is some
> *underlying* concept (such as the equivalent in "sound currency", or
> perhaps labour value?).
>
> Later, Keynes brought our attention back to money values as being what
> actually mattered.
>
Are we talking here about what economists or ordinary people think?
Ordinary people can see the money wage (price, etc.) and in periods
of stable prices that's enough. In periods of inflation it isn't, and
people recognize it soon enough. Go back far enough, and rural workers,
at least, weren't paid in money anyway. But events like Elizabeth's
recoinage and the great inflation of the sixteenth century would have
led people who were involved to recognize the issues. The idea that
people think exclusively of money wages now, after the inflationary
experience of the last few decades, is absurd, isn't it?
But this discussion is about the concepts economists use. Those who
were writing about economic issues certainly knew that money need not
have a stable value from early on - Mun and earlier - but they need not
have conceptualized it in terms of real and money values. Keynes,
obviously, understood and used the distinction between real and money
wages.
----------------------
Tony Brewer ([log in to unmask])
University of Bristol, Department of Economics
8 Woodland Road, Bristol BS8 1TN, England
Phone (+44/0)117 928 8428
Fax (+44/0)117 928 8577
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