Industrial relations as an area of study developed, to a large extent, in response to marginalist economic analysis of markets. Marsden (1982: 236–8) has argued that the origins of industrial relations as a focus of inquiry lies in the inability of orthodox economics to explain labour supply. Kaufman (1993) makes a similar claim, charting the growth of institutional labour economics in the USA as the forerunner of the development of industrial relations in that country. Notwithstanding this genesis, the concept of a ‘labour market’ has been embedded in analyses of industrial relations phenomena from its very beginnings. For many industrial relations writers the operation of the labour market, far from being the competitive one depicted by orthodoxy, is shaped by the agency of buyers and sellers. This agency is expressed through institutional forms and more often than not is constrained or facilitated by the prevailing conditions around labour markets. While much industrial relations analysis empirically challenges the operation of the labour market as described by marginalist economics, it has not on the whole challenged the theoretical foundation of abstract market behaviour.

Herein lies the paradox of industrial relations and the study of work. While often cataloguing empirically the construction and reconstruction of labour and product markets, industrial relations has not developed an effective theoretical alternative to mainstream economics. The result is twofold.