Sidney and Beatrice Webb's Institutional Theory of Labor Markets and Wage Determination

The institutional and industrial relations schools were the dominant groups in labor economics into the 1960s (Boyer and Smith 2001; Kaufman 2006) and among early writers the British husband-wife team of Sidney and Beatrice Webb played a particularly important role – per the Wolman epigraph (also see Douglas 1948). Among the dozens of books and articles they wrote over a six decade career, the 900 page volume Industrial Democracy (1897) stands out as their magnum opus. The book is an exemplar of the early institutional approach in political economy (Rutherford 2011) – exhaustive on-the-ground investigation, an inductive/empiricist approach to theory development, a corpus of theory integrating in a literary way ideas and insights from diverse writers and disciplines (Smith, Marx, Marshall; economics, sociology, history), and a progressive policy program emphasizing social control and reengineering of institutions to produce more efficient and equitable outcomes