Joan Robinson On Dual Labor Markets

In re-reading Robinson, I often find her succinctly summarizing a theory, often developed later. Here is a quotation from one of my favorite books by her:

"The argument is sometimes advanced that evidence shows that, in reasonably prosperous countries, the percentage of unemployment is never seen to vary very much, averaging good times with bad, over the long run ... But even for prosperous countries the evidence is largely an optical illusion. Capitalist industry does not employ the whole work force in any country. Domestic service, paid or unpaid, jobbing work and small-scale trade, and, in most countries, agriculture, hold a reservoir of labour which fills up when regular employment is not expanding as fast as the population. The question of whether people are happier in these occupations than they would be in regular employment is not to the purpose. The point at issue is that there is no justification for putting an assumption into the model to make the rate of growth of the labour force set a minimum to the rate of accumulation." -- Joan Robinson, Normal prices, republished in Essays in the Theory of Economic Growth, Macmillan: 1962.

In this article, Robinson distinguishes between economic models of the allocation of scare resources and models focused on the conditions for the reproduction of the economy.

Maybe her comment looks back on W. Arthur Lewis' 1954 article, Economic development with unlimited supplies of labour. One might also draw connections to Marx's concept of the reserve army of labor and to Rosa Luxemburg's insistence that capitalist reproduction arises only with a background of less-developed non-capitalist markets.

This comment also looks forward to Michael Reich, David Gordon, and Richard Edwards' theory of dual labor markets. In the formal or corporate sector, you can expect to have a standard work week, weekends off, benefits, some asurance that your job will exist next week, and so on. In the informal sector, not so much.