Review (1894) of Gustave de Molinari’s
Labour-Exchanges (1893)

by Henry Crosby Emery (1872-1924)

Les Bourses du Travail. Par G. DE MOLINARI. Paris, Guillaumin et Cie., 1893. – xii, 325 pp.

GM-LE.1 The position maintained by the editor of the Journal des Économistes in this book is that, since labor is a commodity of exchange, it cannot secure a fair chance for itself in the market till it makes use of the machinery by which the exchange of other commodities of a like wide demand is effected. Wages to-day do not represent a fair price for labor, because of the greater exigencies of the laborer’s needs. While the capitalist can place his capital to the best advantage, regardless of time and place, the laborer must sell his labor at once and at the place where he lives. In other words, the laborer is still dependent on the conditions of the local market. The institutions of slavery, serfdom and the guilds of the middle ages attempted to give the laborer greater security, but they have proved inadequate. On the other hand, in the case of the great staples of commerce, an enormous extension of the market, an easy movement of the supply to meet the demand, and the fixing of a market price independent of local conditions, have been effected by a class of middlemen and speculators and through organized bourses or exchanges. The application of the same machinery to the labor market, and the consequent publicity in regard to the demand for labor in different localities, would give results of equal values. The complete transferability of labor would be at last effected, demand and supply would balance with accuracy, and an impersonal and just market price for labor would be established; then wages would rise and the labor problem would vanish.
GM-LE.2 This clear and vigorous argument by M. de Molinari only emphasizes once more, and more strongly than would a less able work, the futility of disregarding the real differences between labor and commodities. And even if labor be treated as a commodity, the author has not sufficiently tested its availability for speculative transactions through the medium of exchanges, which he advocates as the solution of the problem. In the first place, he overlooks the fact that the non-transferability of labor is due, not so much to the lack of adequate machinery of exchange or to ignorance of the foreign (non-local) demand, as to a more fundamental cause, namely, the will of the laborer himself. The laborer is after all a man. He has a wife and children, and desires a fixed habitat for them. He himself refuses to have his household moved hither and thither at every fluctuation in demand. Again, the extension of the market through exchanges has only been possible in the case of representative (fungible) goods. But labor, even if it can be graded like wheat or cotton, is seen not to be a good of this kind at all, when we consider that a man’s capacity for work id a constantly varying quality and dependent on numberless conditions. But furthermore, labor is something which is continually “spoiling.” Its use (consumption) cannot be delayed. Every idle day is a net loss. While at the same time the cost of holding it back involves the enormous cost of maintaining the laborer. He cannot provide this support himself, nor can the middleman provide it. He is still at the mercy of the capitalist. Suppose holding back wheat meant a daily shrinkage of the stocks held and a continuous large outlay to keep them from becoming altogether worthless, – how long would a class of middlemen be found to handle such a commodity, or how long would its price remain independent of local conditions?
GM-LE.3 Considerations of this kind show that the dependence of labor on a local market is a necessity of its nature, and that a world market cannot be created for it by the extension of any system of exchange.


Political Science Quarterly 9, no. 2 (June 1894), pp. 306-308.

[See also L. L. Price’s review and David Kinley’s review]

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