Economists regard the labor market as a negation between buyers and sellers of labor, Does this...

Economists regard the labor market as a negation between buyers and sellers of labor, Does this describe what happened at Carnegie’s Steel Mill? How Did Herbert Spencer’s “Social Darwinism” influence Carnegie’s thinking?

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Many economist believe that the labor market is efficient markets, which means that unemployment can only be short term. If markets are efficient, a person who does not have a job can only be a person who does not want to work. If a person is unemployed, in the context of efficient markets, he just needs to lower his wage rate until he finds an employer who hires him. This assumption is logical because if markets are perfectly flexible, all markets must find equilibrium and full employment.

However, in the case of Carnegies steel mill this assumption did not play out. There was strike and gun battle between the workers and the management because of the wage cut.

Herbert Spencer’s “Social Darwinism” influence very much on Carnegie’s thinking, because Herbert Spencer’s “Social Darwinism” believed that the rich have the strength and capabilities to remain rich and poor because of the lack of skills and capabilities will continue to be poor and he argued for the survival of the fittest.

Rahul Sunny answered 2 years ago

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