What is Iron Law of Wages?

Answer 1

Iron Law of Wages states 'the wages of labour will have a tendency to fall' (Excerpted, condensed and edited from Ricardo: The Principles of Political Economy and Taxation for comparison and comparison of conflict only)

In the natural progression of society, the wages of labour will have a tendency to fall, insofar as they are regulated by supply and demand; for the supply of labourers will continue to increase at a greater rate, while the demand for them will increase at a slower. I say that, under these circumstances, wages would fall if they were regulated only by the supply and demand of all labourers; but we must not forget that wages are also regulated by the prices of the commodities upon which they are expended.

As populations increase, these necessaries will be constantly rising in price, because more labour will be necessary to produce them. If, then, the money wages of labour should fall, while every commodity on which the wages of labour were expended rose, the labourer would be doubly affected, and would be soon totally deprived of subsistence... These, then, are the laws by which wages are regulated, and by which the happiness of far the greatest part of every community is governed. Like all other contracts, wages should be left to the fair and free open competition of the market, and should never be controlled by the interference of the legislature.

The clear and direct tendency of any 'poor' laws is in opposition to those obvious principles: it is not, as the legislature benevolently intended, to amend the condition of the poor, but to deteriorate the condition of both poor and rich; instead of making the poor rich, they are calculated to make the rich poor; and while the present laws are in force, it is quite in the natural order of things that the fund for the maintenance of the poor should progressively increase till it has absorbed all the net revenue of the country, or at least so much of it as the state shall leave to us, after satisfying its own unfailing demands for the public expenditure. Answerer's Note: Fundamental premise, i.e. 'supply of Labourers will continue to increase' is false. Negative growth rates exist in the majority of developed nations Further premise, i.e. 'that wage regulation depends upon commodity prices upon which they are expended' fails to allow for globalization. To be fair, however, Ricardo predated large-scale globalization by over a century. Lastly, 'poor' laws, after proving to be politically and morally untenable, are deeply buried in history's dust heap

Answer 2

Population