Sunday, September 21, 2014

The Laborers in The Vineyard - An Austrian Reading


This week’s Gospel reading was the parable of the laborers in the vineyard.  Let’s take a look:

“A landowner went out at dawn to hire laborers for his vineyard. After agreeing with them for the usual daily wage, he sent them into his vineyard.

Going out about nine o’clock, he saw others standing idle in the marketplace, and he said to them, ‘You too go into my vineyard, and I will give you what is just.’

So they went off. [And] he went out again around noon, and around three o’clock, and did likewise.  Going out about five o’clock, he found others standing around, and said to them, ‘Why do you stand here idle all day?’ They answered, ‘Because no one has hired us.’ He said to them, ‘You too go into my vineyard.’  

When it was evening the owner of the vineyard said to his foreman, ‘Summon the laborers and give them their pay, beginning with the last and ending with the first.’ When those who had started about five o’clock came, each received the usual daily wage. 

So when the first came, they thought that they would receive more, but each of them also got the usual wage. And on receiving it they grumbled against the landowner, saying, ‘These last ones worked only one hour, and you have made them equal to us, who bore the day’s burden and the heat.’  


He said to one of them in reply, ‘My friend, I am not cheating you.  Did you not agree with me for the usual daily wage?  Take what is yours and go. What if I wish to give this last one the same as you?  Or am I not free to do as I wish with my own money?’ "

The knee jerk reaction is to sympathize with the workers. But let’s look at this from the owner’s point of view.

The landowner needs a job done.  Let’s assume that he is under time constraints to get his grapes to the winepress or the fruit market.  So, he makes an estimate as how many workers at a given price are needed to get the work done.  He goes into the labor market and hires the necessary help. After a few hours he sees that work is lagging behind schedule and so he goes back into the market and hires more help.  This continues throughout the day as he sees time slipping away and the job nowhere near completion.  Therefore, he hires more workers and then more workers hoping to meet his deadline.  Only the owner can decide if the incremental labor investment is justified for his business.

Now let’s consider this from the worker’s perspective.

The first group hired are probably those most eager to work.  They might be the youngest, least experienced and least productive.  Therefore the boss was able hire them at the cheapest day rate.  They may also have been those in the most immediate need of cash and therefore eager to hire themselves out for the cheapest rate.

As the day wears on and the owner gets nervous he begins to hire more skilled / more productive workers who command higher wages.  Workers who are more financially well off may sign on later in the day as they prefer to have and can afford to a bit more leisure as opposed to work.

By day’s end, only the most skilled, most productive elite grape pickers are left on the market.  The owner, desperate to get his fruit to market, hires on the top dollar pros.  This final crew may also include those who least need to work and therefore may demand the most compensation for their time may sign on for a short shift.

As previously mentioned, the average observer will feel that it grossly unfair that first crop of workers who worked all got the same paycheck as those who put in only a couple of hours.  This is because most people subscribe the Labor Theory of Value which holds that value of good or service is reflective of the time and effort that goes into producing it.  This is obviously untrue.  Take for instance bad and ugly artwork.  In many cases the artist put in lots of hard work.  But if the work is ugly and stupid, who will pay for it?  Value is conferred by the markets, by whatever consumers or even a consumer will pay for it.


On the other hand, the price of labor is determined by its marginal contribution to a firm’s output and income. 

Obviously this story does not provide cost and productivity data for the various workers so we must surmise some things.

1.       The landowner tried to save a buck by hiring the cheapest labor on the market.

2.       The cheapest workers were not getting the job done fast enough.

3.       As the day wears on, the owner’s need for production intensified and he felt compelled to bid more for workers who were unwilling to accept his original offer for a whole day’s work

It may well be the case that the late hires picked as many or more grapes as those who worked all day.  If so their marginal contribution was as great or perhaps greater than whole day crew.  It is the employer’s job to crunch the numbers and to decide what he is willing and able to pay and what is best for his enterprise.

As the vineyard owner asks, “Am I not free to do as I wish with my own money?”

For labor unions, minimum wage advocates, executive compensation objectors and government regulators, the answer is, “no”.  Apparently they know best what is most valuable to consumers and what is best for business.

God help us.

Related Posts:

Burgers And Bullets
Papal Fallibility
The Wisdom Of The Ancients

Subscribe to the 2 Percenter blog by going to http://feedage.com  and entering 2percentpov into the Search box on top -choose your favorite reader.

Go back to:  2 Percenter Home      Article Archive


Connect through:
Facebook     Twitter     E-mail     
OnFire Radio Show
Streaming  on Hamiltonradio.net

"Half the people are stoned and the other half are waiting for the next election.
Half the people are drowned and the other half are swimming in the wrong direction."  
- Paul Simon