Non-competing Groups

Abstract

The term is due to John Elliot Cairnes, for whom it summarized ‘the limitations imposed by social circumstances on the free competition of labour’ (Cairnes 1974, p. 73). Cairnes stressed acquired skill as the main impediment to occupational mobility, but he was at pains to make clear that there is no uniform nor even necessarily direct relation between skill and wages, nor therefore between skill and cost of production. Cost of production measures the sacrifices of labour and abstinence, but skill is no element of cost, though it will generally serve as an index of the labour and abstinence undertaken to acquire it. The fact is, however, that great skill may issue in a product that sells quite cheaply, and vice versa (p. 85). It is true, Cairnes acknowledged, that rewards within an occupation will reflect skill differences. His concern, however, in this context, was wages and costs between occupations. What skill commands between occupations depends on the exercise of monopoly power. Thus non-competing groups meant just that: occupational groups between which wages reflected non-competitive conditions.

This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman