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Conceptualizing CapitalismInstitutions, Evolution, Future$
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Geoffrey M. Hodgson

Print publication date: 2015

Print ISBN-13: 9780226168005

Published to Chicago Scholarship Online: January 2016

DOI: 10.7208/chicago/9780226168142.001.0001

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Labor and Employment

Labor and Employment

(p.235) Chapter Nine Labor and Employment
Conceptualizing Capitalism

Geoffrey M. Hodgson

University of Chicago Press

This chapter considers (1) the nature of the employment relationship, (2) the consequences of practical and legal limitations on contracts for future employment, and (3) Marx's claim that the employment relationship is a foremost characteristic of capitalism. The distinction between an employment relationship and a contract for services is explained; where in the former case the employer has the right of detailed control over the manner and pattern of work. Employment contracts have advantages of flexibility in complex and rapidly changing economies. But the absence in a capitalist economy of full futures contracts for labor-power is a consequence of the ban on slavery. These endemic missing markets mean that capitalism cannot reach optimal outcomes through market adjustments. Considering the possible place of employment in the definition of capitalism, it is pointed out that day-labor was common in England in the Middle Ages, long before the capitalist take-off in the eighteenth century. But it is possible that employment relations could be replaced by other arrangements in the future, signaling a different type of system.

Keywords:   employment relationship, contract for services, slavery, complexity, missing markets, incomplete futures markets for labor, Karl Marx

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