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Industrial Relations Framework Essay

1244 words - 5 pages

The Industrial relations framework emerged as a response to the Social Question or the ‘Labour Problem’ – which has been defined by some authors as the problem of improving the conditions of employment of the wage-earning classes [1]. To mitigate the problems of the labour class, whose interests were seen as antithetical to the interests of the producers; a variety of flavours and philosophical leanings developed amongst academicians. Thus IR was conceived differently by different theorists, right from formalization of workplace norms (Dunlop) and job regulation (Flanders) to the social regulation of production (Hyman 1995). The general understanding in the beginning of the historical ...view middle of the document...

His treatment of labour as a commodity remains a standard among many economists (look up reference). Furthermore, in the Principles of Economics, though Marshall notes that capacity of individual workers to bargain is considerably lesser than most commodity markets, he asserts that this divergence is irrelevant for purposes of theory. Therefore, he adds that the differences between the two are not fundament from a theoretical standpoint. This mechanistic view of the labour market as a game of demand and supply ignored the human aspect of labour and gave an intellectual rationale to an unregulated regime of free trade.
The idea that labour was another commodity and that labour markets must be allowed to function in a de-regulated manner (like other commodities) subject only to market forces was rejected amongst labour reformers and proponent of industrial relations. The core principle behind the paradigm of industrial relations asserts that labour is embodied in human beings, and consequently that labour is not a commodity. Not only is this an assertion which stems from the need for human dignity and human values, but also an implicit understanding that there was an inherent imbalance of power between the owners of capital and owners of labour, and that as an individual a provider of labour had almost no say in the determination of wages. This is enshrined in the Constitution of the ILO, wherein the first principle reads “Labour should not be regarded as a commodity or article of commerce”.
Industry Relations choses as middle way between the positions held by orthodox economics and Marxist social ideas. In some aspects industrial relations uses certain tools and components of neo-classical economics such as maximization and equilibrium, however it straight away rejects some other core concepts such as Walrasian Demand supply mechanics. In this it tries to construct a quasi-theoretical base which propounds a form of social labour economics which takes into consideration the realities of the human participants of business, and evolve frameworks like workers participation and trade unions, labour laws in various countries, progressive employee management and government regulation of the labour market.
Meanwhile, Industrial relations as a field also enriched its philosophical opposition to growing threat posed by some of the central tenets and implications of neo-classical economics. According to this school of economics, in the world of perfect competition, demand and supply will optimally allocate resources to their most efficient use, and all sides would gain from the transactions involved. These are essentially theoretical assertions but most proponents hold that they approximate the behaviour of the labour market well enough, in which any policy intervention is unnecessary, and in fact may be...

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