The Normative Implications for Labour Policies

Chapter 3 permitted validating the behaviour of the labour movement which sought, by way of offensive strikes during the growth phases of the Juglar cycle, to reduce working time in order to increase wages and thus make this cycle more regular. This chapter also allowed interpreting the observation made by historians that during the growth phases of this cycle, the profits of companies increased faster than wages, whereas the contrary occurred during recession phases. We showed that the origin of these facts lies in the asymmetry of power predominating in the labour market between employers and employees. In a context of technical progress, employers can influence the volume of work supplied by employees to such an extent that gains in productivity and the rise in added value generated during growth phases benefit the income gleaned from capital more than that earned from work. After several years, this growth results in a crisis of overinvestment and overproduction.