Via NewSci: Ernst Fehr: How I found what's wrong with economics
Twenty years ago, Fehr had a seemingly sensible idea - that a deep-seated human preference for fairness might play an important role in economics. He thought it might explain why companies - even in countries without a minimum wage - don't offer jobs paying wages far below the standard, despite research showing plenty of unemployed people would willingly take the work. It doesn't happen, he suggested, because companies know that workers hired at a lower wage feel they are being cheated, causing them to grow disgruntled and work less hard.
"Yeah Capitalism!"
