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- The Iron Law of Wages is a theory in classical economics which claims that in the long run, real wages (wages that are in term with the amount of goods and services that can be purchased with them) always tend to move in the direction of the minimum wage that is necessary for the survival of a worker and his family.
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The iron law of wages is a proposed law of economics that asserts that real wages always tend, in the long run, toward the minimum wage necessary to sustain the life of the worker. The theory was first named by Ferdinand Lassalle in the mid-nineteenth century.
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One of the most popular and respected economists of his time, David Ricardo's Iron Law of Wages remains one of his most well-known arguments. Buzzle gives you a summary of his argument in this post.
Subsistence theorists argued that the market price of labour would not vary from the natural price for long: if wages rose above subsistence, the number of workers would increase and bring the wage rates down; if wages fell below subsistence, the number of workers would decrease and push the wage rates up.
Jan 26, 1996 · Modern History Sourcebook: David Ricardo: The Iron Law of Wages, 1817. David Ricardo (1772-1823), an English banker was also an important early economist. His most well-known argument was that wages "naturally" tended towards a minimum level corresponding to the subsistence needs of the workers.
Sep 1, 2023 · What Did David Ricardo Argue in His Iron Law of Wages Theory? David Ricardo argued that attempts to increase or improve workers' wages were pointless because wages would, in time,...
Sep 15, 2014 · While the phrase “iron law of wages” is usually credited to the German socialist Ferdinand Lassalle, the idea itself may be found much earlier, in the work of David Ricardo and Thomas Malthus. Reference to consistent rules as “iron laws” can be found as early as 1783, in Goethe's “Das Göttliche”.
The ‘iron (or brazen) law of wages is a term. ’. invented by Ferdinand Lassalle (1862) to describe the inexorable tendency of real wages under cap-italism to adhere to a level just sufficient to afford the bare necessities of life.
