Inequality of bargaining power

Inequality of bargaining power is a market impairment that arises when one party to a negotiation has better alternatives, making it more likely that this party will gain more favorable terms.


  • There must always be an inequality of bargaining power between masters and men in every contract, until that day shall arrive when the sacrifices of each master in a strike or lock out will affect his present comfort and future destiny as seriously, in its way, as it does that of each of his workmen.
    • John Beattie Crozier, The Wheel of Wealth (1906) Part III, ch 2, ‘On the tendency to inequality’, p. 377

  • For [Adam] Smith, who wrote before the time of mass advertising and professional PR departments, the strategic creation of shared sentiments does not seem to be a major issue. Today, however, it seems that there is a growing imbalance between individuals and organizations that are extremely good at attracting sympathy and attention from others, with the help of high-quality training and professional advisors, and others who are unable to articulate their sentiments in a way that elicits sympathy from others. But the genuineness of sympathy of organizations and individuals that manufacture it can be doubted: their aim might be to initiate economic exchanges that the other party maybe would not agree to if it was not for the manufactured sentiments of those who offer these goods or services. The unequal ability to attract sympathy constitutes an imbalance of power in commercial societies that often aggravates the situation of those already disadvantaged in terms of human capital and material resources.
    • Lisa Herzog, "The Community of Commerce," Philosophy and Rhetoric, vol. 46, no. 1 (2013), p. 82

  • It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.

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