About Suffering and Law in the Labour Market

Abstract

In this article, I begin with the question, what should be the agenda of political economy and of law and economics? I argue that the agenda should include humanistic economic questions, such as how to protect weak workers and how to minimize suffering. Humanistic economics is especially important when we discuss legal questions. Then, I discuss this article’s central question: How should power gaps be handled in the labour market? I examine the various answers to this question and discuss the fundamental controversies in political economy. In particular, I examine the solution of a free market vis-à-vis the social-democratic solutions of labour legislation—especially the minimum wage law, encouragement of organized labour, and transfer of wealth through tax laws.

Keywords: Law and Economics, Game Theory, Labour Law, Distributive Justice, Taxation, Adam Smith, Marx