Approaches to the Theory Of Bargaining

For a longtime wage bargaining, like unemployment, was relegated to a modest back seat in the main body of academic economic doctrine. While all great realistic writers from Adam Smith onwards did realize their importance and paid attention to them in special chapters and in appendices, it was mainly ‘outsiders’ like Marx, Hobson, the Webbs, and a few business cycle and duopoly specialists, who found room in the centre of their theories for a realization that unemployment may be more than merely a consequence of adjustment difficulties or outside interference, and that bargaining can play a major rôle in wage determination. The main stream of economic theory remained comparatively untouched by these important economic phenomena. While unemployed families were suffering severe hardships and trade unionists were risking their lives to secure collective bargaining rights, unemployment was regarded by many writers as practically non-existent and bargaining itself as an empty illusion.