The Theory of Wages. - [INDUCED INNOVATION]

1932. London, Macmillan & Co., 1932. 8vo. Orig. full brown cloth w. gilt lettering to spine. Orig. brown dust-jacket w. wear and a bit of loss to corners and capitals. Otherwise and excellent and clean copy w. only some occasinal minor brownspotting. XIV, 247 pp. First edition of this standard work on wages, Hick's first major work, in which he proposed the macroeconomic hypothesis about INDUCED INNOVATION and foreshadowed important later developments in neoclassical distribution theory. Sir John Richard Hicks (1904 - 1989) was one of the most important and influential economists of the twentieth century. He has contributed seminally to moth micro- and macro-economics and in 1972 he was awarded the Nobel Prize in Economic Sciences together with Kenneth Arrow for "pioneering contributions to general economic equilibrium theory and welfare theory."As a labor economist, Hicks already in 1932, aged 28, wrote his first major work, his very important "Theory of Wages", which serves as a fundamental basis for recent theories of distribution, now widely developed in e.g. Cambridge. Hick's early work is still considered standard in the field, and a vast amount of literature has been published on his hypothesis of induced innovation, which is presented in this work for the first time. The theory is formulated as thus: "a change in the relative prices of the factors of production is itself a spur to invention, and to invention of a particular kind-directed to economizing the use of a factor which has become relatively expensive." And this theory has also frequently been applied to increases in energy costs, which would thus come to motivate a quicker improvement in energy efficiency.But not only did Hicks here propound the still influential theory of induced innovation, this work is also considered as foreshadowing many of his later theories, which have become significant contributions to neoclassical distribution theory; e.g. a reformulation of marginal productivity theory, further development of the product exhaustion theorem, a macroeconomic theory of relative factor shares etc., etc. "The object of this book is "a restatement of the Theory of Wages in a form which shall be reasonably abreast of modern economic knowledge." The treatment is based on the Marginal Productivity theory, although that theory is stated in a rather new way, designed to facilitate its use in realistic study of the labour market. This is followed by a more general study of the working of the labour market under competitive conditions, and by a theory of the secular forces governing the general level of wages. The second part of the book deals with the regulation of wages. There is a chapter on the Theory of Industrial Disputes, and one on the economic forces which have facilitated the Growth of Trade Union Power in England. The last chapters contain a detailed analysis of the effects of wage-regulation on unemployment, including the distribution of unemployment between industries, and the prospects of a reduction in unemployment through an increase in productivity." (Front of dust-jacket).A second edition appeared in 1963.The work is scarce in the original dust-jacket.