Alfred Amonn, Lohntheorie und Lohnpolitik (1947)

Alfred Amonn’s German-language work examines how wage theory can guide policies that improve workers’ living standards without undermining employment. Its argument moves from classical explanations of wages to labour-market institutions, business cycles, inflation, and state mediation. Theory supplies the basis for judging what intervention can accomplish.

Um eine rationale, zweckentsprechende Lohnpolitik treiben zu können, bedarf es einer Lohntheorie.

English translation: In order to be able to pursue a rational wage policy appropriate to its purpose, a theory of wages is needed.

Amonn begins with theories that seem to restrict lasting wage improvements. Subsistence theory connects earnings to the reproduction of the labouring population. Yet the distinction between physical and cultural subsistence complicates any rigid “iron law”: acquired expectations of comfort can restrain population growth and sustain higher wages. Workers’ behaviour thus mediates what might otherwise appear an unavoidable economic necessity.

Neben dieser Existenzminimumtheorie hatte sich in der klassischen Periode eine zweite herausgebildet, die sogenannte «Lohnfondstheorie».

English translation: Alongside this subsistence-minimum theory, a second one had taken shape in the classical period, the so-called "wages-fund theory."

Wage-fund theory ties average earnings to the relation between available capital and the number of workers. Amonn treats these explanations as addressing different time horizons rather than necessarily contradicting one another. Marginal-productivity theory subsequently shifts attention from wage income to the wage rate and the productive contribution that makes employment remunerative.

Nach dieser Theorie scheint eine künstliche Beeinflussung des Lohnes aber auch gar nicht nötig zu sein, denn bei freier Konkurrenz müsste er im Laufe der Zeit zufolge der mit dem technischen Fortschritt ständig steigenden Produktivität selbst ständig steigen.

English translation: According to this theory, however, an artificial influencing of wages appears not to be necessary at all, for under free competition the wage would itself have to rise steadily in the course of time, in consequence of the productivity which rises steadily with technical progress.

Amonn qualifies this apparent redundancy of wage policy. Adjustment takes time; rising general productivity does not automatically establish rising marginal productivity; and actual competition disadvantages workers. Workers must sell their labour promptly, while employers can wait and coordinate. Limited information and mobility further weaken labour’s position. Policy can therefore accelerate adjustments that competitive theory predicts only eventually.

Low wage rates may also increase labour supply. Households can respond by working longer or sending additional family members into employment, while children’s earnings can encourage larger families. Competition may consequently reproduce low wages instead of correcting them. Amonn interprets restrictions on child labour and working hours through this mechanism: they limited labour supply, supported an adult male family wage, and weakened incentives for population growth. Shorter hours could also improve productive performance. Labour protection thus affected production as well as distribution, illustrating his preference for changing wage-determining conditions over directly fixing wages.

Trade unions strengthened labour’s bargaining position by organizing collective refusal to work below an agreed rate. Strike funds enabled workers to wait, counteracting an employer advantage. Yet collective organization also turned wage determination into negotiation between opposing monopolies. Economic limits remained, but bargaining power and competing judgments of justice gained greater influence.

Amonn distinguishes justified wage advances from increases that threaten employment. Productivity growth normally supports rising wages, and abnormal profits may permit redistribution. Rates above the full-employment equilibrium, however, can exclude marginal workers: minimum wages may benefit retained employees at the expense of those dismissed. He treats unusually high unemployment as evidence of excessive wages, while acknowledging the difficulty of judging permissible increases without adequate production statistics.

The distinction between individual earnings and aggregate wage income becomes central in depression. A higher wage rate need not produce greater total purchasing power if employment contracts; lower rates might preserve aggregate income by expanding employment. Nevertheless, Amonn leaves competing accounts of wage policy’s cyclical effects theoretically unsettled.

Inflation demands another distinction. Compensation for purely monetary price rises is justified because workers cannot reasonably bear the entire burden. But where prices reflect a reduced supply of goods, higher money wages cannot restore everyone’s former real consumption. Automatic indexation obscures this difference between monetary depreciation and material scarcity.

Amonn assigns the state chiefly an advisory and mediating role, supported by wage statistics, production data, and business accounts. His qualified defence of intervention combines correction of labour’s bargaining disadvantages with attention to employment and real income. The practical objective is a negotiated accommodation between organized workers and employers, sustained by evidence and compromise where bilateral monopoly supplies no automatic equilibrium.