The Theory of Wages is a book by the British economist John R. Hicks published in 1932 (2nd ed., 1963). It has been described as a classic microeconomic statement of wage determination in competitive markets. It anticipates a number of developments in distribution and growth theory and remains a standard work in labour economics. Part I of the book takes as its starting point a reformulation of the marginal productivity theory of wages as determined by supply and demand in full competitive equilibrium of a free market economy. Part II considers regulated labour markets resulting from labour disputes, trade unions and government action. The 2nd edition (1963) includes a harsh critical review and, from Hicks, two subsequent related articles and an extensive commentary. The book presents: * labour demand as derived from the demand for output, such that for example a fall in the wage rate would lead to substitution away from other inputs and more labour use from increased production that the lower wage would facilitate * the first statement of the economic concept of elasticity of substitution, a measure of the substitution effect posited above as to how much one factor of production (say labour) would change to keep output constant in response to a change in relative factor prices * the relation of this concept and its determinants to the distribution of factor-income shares * technical change as biased or neutral (later termed Hicks-neutral technical change), depending on how it affects the marginal product of one productive factor (say labour) relative to that of another (say capital) * a macroeconomic hypothesis about induced innovation that "[a] change in the relative prices of the factors of production is itself a spur to invention, and to invention of a particular kind—directed to economising the use of a factor which has become relatively expensive," including from one factor (say capital) growing at a faster rate than another (say labour) (p. 124) * elements of employee-employer attachments in distinguishing regular and casual labour with an emphasis on expectations, imperfect information and uncertainty in the labour market * the first-ever attempt to model a labour dispute that might end in a strike. (en)