[PEN-L:6093] Re: The quality and quantity of work

[knowware@xxxxxxxx (Tom Walker)]

Michael Perelman asked:

>Have any studies attempted to develop a comprehensive analysis of the
>demands of the workplace?

Comprehensive? No. The research that has been done has been piecemeal,
context specific and dated. In 1913, Phillip Sargant Florence was
commissioned by the British Association for the Advancement of Science to
study the effects of fatigue on production. The result of the investigation
was published in 1924 in _The Economics of Fatigue and Unrest_ (which, my
local university "first-class research library" doesn't have, grrrr). That
research can be seen as the empirical verification of S.J. Chapman's theory
of hours, published in 1909.

Chris Nyland has a good discussion of Marx's inquiry into the relationship
between the length and intensity of the working day (Reduced Worktime and
the Management of Production, 1989). As a matter of fact, it's the best
discussion in print and takes marxists severely to task for not paying more
attention to the importance of this dynamic in Marx's thought.

I want to call attention to a comment Nyland made in his book: "The
marginalists acceptance of Chapman's position was a major victory for those
involved in the worktime debate who based their analysis on Marx's theory of
worktime."

Now doesn't that make the 'disappearance' from the discourse of Chapman's
theory a matter of some urgency? I reproduce below my essay on growth
economics and the standard of living (also at
http://www.vcn.bc.ca/timework/satanic.htm). By the way, I have an idea about
how to recapture that "major victory" for Marx's theory. All I need is is a
modest amount of funding for the publicity campaign -- roughly $50,000. The
post-publicity legal defense fund should take care of itself. Sponsors are
welcome to contact me offlist. You say you want a revolution?

Michael Perelman asked:

>The discussion begun by Tom Walker and Brad De Long seems to be pointing
>to an analysis of the quality of labor.  Marx pointed out that we should
>look not just that the extent of the working day but the intensity.  New
>forms of panoptic monitoring allow employers to measure keystrokes, keep
>track of times spent on the toilet, and perhaps in the near future
>monitor brain waves.  We also heard about the importance of workplace
>safety as well as the transfer of work to far off venues, such as the
>sweatshops that have been in the news lately.
>
>I also mentioned pressures that are external to, but closely related to
>the workplace, such as commuting.
>
>Have any studies attempted to develop a comprehensive analysis of the
>demands of the workplace?

Did Growth Economics Kill the Standard of Living?

"Any prescribed set of ends is grist for the economist's unpretentious
deductive mill, and often he can be expected to reveal that the prescribed
ends are incomplete and inconsistent. The social welfare function is a
concept as broad and empty as language itself -- and as necessary."
 -- Paul Samuelson

'And was Jerusalem builded here
Among these dark Satanic Mills?'
 -- William Blake

Introduction

When Alfred Marshall coined the phrase, "standard of living" in 1891, he did
so to distinguish between "a mere increase of artificial wants, among which
perhaps the grosser wants may predominate" and "an increase of intelligence,
and energy and self-respect; leading to more care and judgment in
expenditure". Marshall saw a "great diminution" in the hours of labour as a
necessary condition of an increase in the standard of living, concluding
that, "a general reduction of the hours of labour is likely to cause a
little net material loss and much moral good . . . " Eighteen years later,
S. J. Chapman added "The ideal working day of the future cannot be eight
hours, for it must essentially be a progressive ideal."

Remarkably, these observations from turn of the century "bourgeois
economists" converged with Karl Marx's claim that "the limitation of the
working day is a preliminary condition without which all further attempts at
improvement and emancipation must prove abortive."

Neo-classical economics set aside such visions of social progress and
instead insisted that a reduction in the hours of labour could only come
about as a result of an increase of artificial wants and of the output to
fill those wants. That is a lie -- a baseless, circular lie. The
prescription of economic growth that follows inevitably from that lie is
iatrogenic . That is, the treatment induces injury. More of the same
medicine is prescribed for the injury and the patient gets sicker and sicker.

In the quotations at the beginning of this article, the poet, Blake, and the
economist, Samuelson, were both referring to the same kind of mill -- not a
factory but a utilitarian calculus. Who is right? Is such a mill necessarily
dark or does it cast revealing light? Is it Satanic or is it unpretentious?

One can surmise from the title of this paper what the author's verdict will
be. The Samuelsonian pretensions of an "ethically neutral" deductive mill
are built on a tortured  foundation of wishful thinking, breezy elitism,
obscurantist 'technical' virtuosity and negligent scholarship. Beyond
reasonable doubt, the mill is Satanic. The purpose of this discussion will
be to show how that judgment was arrived at, why the finding is conclusive,
why it matters and what needs to be done.

The demonstration of how the judgment was arrived at can best be compared to
untying a knot. The significance of the knot is difficult to establish
before its shape has been determined and its shape can only be determined in
the act of untying.

The knottiness of the problem was first sensed by the discovery of two
perplexing clues. The first clue came from unraveling a false allegation --
the so-called "lump-of-labour fallacy". The second clue came from exhuming
and re-examining a long-neglected theory of the hours of labour that was
once considered impeccable but then was simply abandoned -- without ever
having been refuted.

Without yet knowing what "the problem" was, these two perplexing clues --
and their suspected but mysterious connection to each other -- indicated the
existence of a knotty problem. The problem turns out to be that the
neo-classical synthesis in economics (within which Keynesianism is one
strategic orientation) was founded on a lump-of-labour fallacy.

Paul Samuelson, godfather and mentor of the neo-classical synthesis and
author of what for decades was the most widely-used introductory textbook in
economics, has for over a half a century propagated a wickedly distorted
version of the lump-of-labour fallacy, which attributes fallacious
assumptions to proponents of shorter work time. That beguiling slander has
deflected attention from the greatest vulnerability of the neo-classical
synthesis -- the dark lump in its heart, so to speak.

At a more abstract level, the claim that the Bergson-Samuelson social
welfare function is more general, hence presumably more objective, is
founded on nothing more substantial than anxious accusations against earlier
economists that they made "unnecessary interpersonal comparisons". This
manoeuvre was epistemological mud-slinging cloaked in somber academic robes
-- "Nyah, nyah-nyah, nyah, nyah, you're metaphysical." The social welfare
function allowed the self-appointed, value-neutral economic planners to make
their interpersonal comparisons behind their own backs by falling back on
"old and simple" abstractions of "supply, demand and cost of production".

The old and simple laws simply don't apply to the analysis of the hours of
work. Economists knew that before the mathematically precocious whiz kids
bedazzled economics with their "unpretentious deductive mill". Then the
discipline just sort of . . . forgot. In an orgy of intellectual hubris,
economists worked overtime in the effort to be precise, unambiguous and dead
wrong.

The consequences have included an unintended professional bias of economists
against leisure and in favour of the heedless expansion of Gross Domestic
Product. That bias has been all the more virulent for its purposelessness --
its "emptiness". As for the rest of us, we've had to sacrifice our standard
of living -- our intelligence, energy, self-respect, judgment and ideals --
as grist for the economists' mill.

The Lump of Labour

The lump-of-labour fallacy is usually presented as the "implicit
assumption", made by advocates of shorter work time, that "there is only a
fixed amount of work to go around". The notable features of this story are:

1. the assumption is always attributed to shorter work time advocates by
opponents of such proposals, it is never stated by advocates as an assumption;

2. the fallacy is always referred to as authoritative but the necessity of
the implicit assumption is never demonstrated, we are expected to take it on
faith that somewhere there is an authoritative demonstration

3. definite scholarly references for the lump-of-labour fallacy are never
presented.

In short, the lump-of-labour fallacy is typically presented as hearsay. Such
a hearsay presentation has been faithfully included in edition after edition
of the Samuelson introductory economics textbook:

In periods of high unemployment, people often think that a solution lies in
spreading the existing amount of work more evenly. . . This view -- that the
total amount of work to be done is fixed was sometimes espoused by classical
economists and is called the 'lump-of-labor fallacy'. . . the lump of labour
argument implies that there is only so much useful remunerative work to be
done in any economic system, and this is indeed a fallacy. A look at history
in many different countries shows that there is no fixed lump of labour to
be distributed -- there is no need to ration out scarce work among the army
of unemployed workers.

Given the obligatory neglect of scholarly references, it is difficult to
track down the exact origin of the analysis of a lump-of-labour fallacy. The
most likely candidate, however, would be the article, "Why Working-Men
Dislike Piece-Work" by David F. Schloss published in the Economic Review of
April 1891.

Schloss claimed that his "Theory of the Lump of Labour" had "nothing to do"
with the length of the working day. What Schloss was investigating was the
intensity of work and the perception of some employers, echoed by
economists, that workers deliberately withheld work effort in order to
restrict output.

The sense of Schloss's lump-of-labour fallacy comes through in Samuelson's
unquestionable claim that there is not a fixed amount of work. But to go
from the Schloss to the Samuelson version requires an additional assumption:
that limiting the hours of work amounts to spreading an existing amount of
work. That is to say, Samuelson, not the advocates of work sharing, first
assumes that the withholding of work effort to restrict output must
accompany the reduction of hours, then he attributes the whole, mixed-up
heap of assumptions to the advocates of shorter work time.

Unpacking the heap, we find three attributed assumptions, not one: 1. that
there is a fixed amount of work, 2. that redistribution of hours will be
accompanied by withholding of effort to restrict output and 3. that the
total amount of work available will remain unaffected by the restriction of
output. There is always the possibility that somewhere there is an advocate
of shorter work time who makes such a complex set of false assumptions.
However, until we encounter this strange individual we may safely assume
that he, she or it is made of straw.

Although one can search long and hard and not find an advocate of shorter
work time who actually states those three assumptions, it is not hard to
find unsympathetic sources that attribute such a view to advocates. The
earliest published source this investigator could find that directly ties
the expression, the lump-of-labour fallacy, to proposals for reduced work
time is in a book review by H.B. Lees-Smith in the September 1905 Economic
Journal. Reviewing _The Labour Day_ by A. Maltman Barrie, Lees-Smith
dismissed it with a huff:

This book does not call for a lengthy review. It is an example of the
strange conclusions to which one may be carried by clinging firmly to the
'lump of labour' fallacy. Its main argument can be stated in a few words.
The less work that some men perform, the more is there left for others, and
the greater, therefore is the demand for labour. Hence in order to raise
wages and solve the problem of unemployment, we need only reduce the hours
of work to eight or less.

Four years earlier, in a highly controversial series in the London Times,
The Crisis in British Industry Edwin A. Pratt had attributed the same motive
to advocates of the eight hour day without specifically mentioning a
lump-of-labour fallacy:

The idea [of "ca'canny" or "go easy"] has found favour with a vast number of
British workers, partly out of consideration for non-workers, and partly
because it may suit their natural disposition. But in its original inception
there was much more in it than this. It was hoped to "absorb" all the
unemployed in course of time, not by the laudable and much-to-be-desired
means of increasing the volume of trade, and hence, also, the amount of work
to be done, but simply by obtaining employment for a larger number of
persons on such work as there was already. The motive of this aspiration,
however, was not one of philanthropy pure and simple. When all the
unemployed had been absorbed the workers would have the employers entirely
at their mercy, and would be able to command such wages and such terms as
they might think fit. The general adoption of the eight hours system was to
bring in a certain proportion of the unemployed; if there were still too
many left the eight hours system was to be followed by a six hours system;
while if, within the six, or eight, or any other term of hours, every one
took things easy and did as little work as he conveniently could, still more
openings would be found for the remaining unemployed, and still better would
be the chances for the Socialist propaganda.

The allegation that advocates of shorter work time assume a fixed amount of
work and a withholding of work effort thus appears to have arisen not in
Schloss's analysis of the lump-of-labour fallacy and not from any statement
by advocates for shorter work time but from propaganda against the movement
for an eight-hours day.

Although the expression, "lump-of-labour fallacy" doesn't appear in the
Times series proper, it does show up in several of the letters to the editor
in response to the series. Those usages, however, reflect the limited
Schlossian sense of withholding work effort and not the implication that
such a restriction of output is an intrinsic part of the demand for shorter
work time.

One of the letters that challenged the allegations in the Times series and
that mentioned the lump-of-labour fallacy was from Sidney and Beatrice Webb.
Beatrice (Potter) Webb had worked closely with Schloss in the late 1880s on
Charles Booth's investigation of London Life and Labour. Sidney Webb was
co-author, along with Harold Cox, of one of the most authoritative
treatments during the 1890s of the economics of the eight-hours day.

The fact that the expression didn't occur in the Webb and Cox book, nor in
John Rae's influential analysis of the eight-hours day, nor in Alfred
Marshall's discussion of the hours of work in his Principles of Economics
nor in any other of the dozen or so articles on the issue from the period
that this author has examined lends credence to Schloss's assertion that his
critique of lump-of-labour fallacy had nothing to do with the length of the
working day.

The Hours of Labour

There is yet another text, this one occurring several years after the 1901
Times series and the 1905 book review, that doesn't mention the
lump-of-labour fallacy. Sidney Chapman's 1909 presidential address to the
Economic Science and Statistics Section of the British Association for the
Advancement of Science on the Hours of Labour was published in the September
1909 Economic Journal. Chapman's analysis was for many years after
considered the  "classical statement of the theory of 'hours' in a free
market" and forms the core of Arthur Pigou's discussion of the issue in his
Economics of Welfare.

After citing Chapman's article as the classical statement in a footnote to
his 1932 Theory of Wages, John Hicks went on to comment, "There is very
little that needs to be added to the conclusions of these authorities
[Chapman and Pigou]." Very little, perhaps, aside from the strange
circumstance that after 1932, Chapman's analysis virtually vanished without
a trace from the discourse of economics. The article, of course, is still
there, languishing in dusty bound volumes of the 1909 Economic Journal. But,
without having ever been refuted, the classical statement of the theory of
hours was simply and unceremoniously ignored.

As elegant as Chapman's theory of hours is, it is contained within what
today might be viewed as a somewhat rambling and fusty address. It is useful
therefore to restate Chapman's main argument concisely. What Chapman showed
was that free market forces could not be relied on to arrive at the optimal
length of the working day, neither from the perspective of the worker nor
from the perspective of maximizing output. The "laws" of supply, demand and
the cost of production simply didn't apply in the matter of determining hours.

Chapman began his discussion by noting the mass of evidence, accumulated
over the preceding one hundred years and extensively reviewed by John Rae in
the 1890s, that the reduction in the hours of work doesn't lead to a
proportionate reduction in output. In the majority of cases, after a brief
period of adjustment, total output during the shorter hours has returned to
the same level that it had been before the reduction in hours and in many
cases it actually increased:

I have found no instance in which an abbreviation of hours has resulted in a
proportionate curtailment of output. There is every reason to suppose that
the production in the shorter hours has seldom fallen short by any very
appreciable amount of the production in the longer hours. In some cases the
product, or the value of the product, has actually been augmented after a
short interval. In a few cases the reaction of the shorter hours on the
output per week has been instantaneously noticeable, and the new product has
surpassed the old product before mechanical methods could be improved.

Chapman attributed this phenomenon to the fact that as production methods
became more intensive, workers required more leisure time to fully recover
from the fatigue of work. Chapman emphasized that in modern industry this
fatigue was increasingly non-physiological, resulting from the demands of
specialization and mental concentration rather than from the physical
demands of the work. When the hours of labour were reduced, the
better-rested workers were able to produce more in the shorter hours than
they had previously in longer hours.

The total value of the output from standard working days of different
lengths, starting from 0 hours, would thus initially increase as the day
became longer but eventually the total output -- not just the output per
hour -- would decline as the standard day became too long to allow for
sufficient leisure during which the worker could recover from fatigue.
Beyond a certain point, each additional hour of work would continue to add a
quantum of output to the current day's total output but only at the expense
of reducing the next day's hourly pace. What that point was, Chapman
maintained, depended on the intensity of the specific production methods and
thus would vary in response to changes in those methods.

Having established the idea of an optimal length of standard working day
that would maximize output, Chapman next turned to the questions of whether
such an optimal length would be likely to be established by the workings of
a free market and whether the optimal length of day for output coincided
with the optimal length from the perspective of the worker. His conclusion
was negative in both cases.

>From the perspective of the employer, Chapman argued, the optimal length of
day for output could only be achieved if all employers acted in accord. This
is because the maintenance of the long term optimum inevitably required some
short-term restraint. A single employer could never be entirely certain of
reaping the benefit of that restraint because another firm could always
potentially offer a small wage premium  and hire away the first firm's
well-rested workers. The optimal output work-time would thus be a form of
investment without equity for employers. "The reforming employer would run
the risk of paying the whole cost of the labour value created by shorter
hours and getting little in return; other employers might secure and exhaust
the new labour value and no permanent good would be effected."

>From the perspective of the worker, the optimal length of day could, for all
practical purposes, be considered to be shorter than the optimal length of
the day for output. Chapman considered three elements in assessing the
optimal day for the worker:

	·	the wage, which Chapman assumes to exactly equal the worker's
marginal productivity;
	·	the marginal value of leisure, which Chapman assumes to vary
in response to changes in the level of wages;
	·	the disutility of work, which Chapman assumes to also be a
function of the length of the working day -- during some
intermediate period of the working day, Chapman assumes that
work will typically be experienced as pleasurable.

Chapman's analysis of the optimal day from the worker's perspective closely
follows Jevons's analysis in his Theory of Political Economy except that he
doesn't assume that the individual worker can dictate the length of working
day based on his or her preference. Instead of making that assumption, he
shows why the employee's preferred day is likely to diverge from the
employer's. This divergence arises out of the non-proportionality between
output and the hours of work. Chapman synthesized the two components of the
objective and subjective determinants of the length of the working day,
plotted them together on a single diagram and thereby demonstrated
conclusively the uniqueness of the problem -- under assumptions of pure
competition, the supply of and demand for hours do not tend toward utility
maximizing equilibrium.

It was earlier mentioned that Chapman didn't mention the lump-of-labour
fallacy in his paper. He does, however, allude to unspecified "fallacious
ideas" that may be taken to be akin to the lump-of-labour fallacy. What
Chapman says is worth noting:

It would seem from the records of labour movements as if the operative's
fear -- based as much on ignorance as on distrust -- lest the longer day
should mean no more pay, though the weekly product would be greater, has
protected him against the injurious consequences of short-sightedness; but I
am inclined to think that the dominant force in these labour movements has
consisted in ideals of life, formed half instinctively, which are
unconnected with views, fallacious or otherwise, concerning the mechanics of
distribution.

Eternal return of the lump of labour

Recapping, we have seen that the original lump-of-labour fallacy had nothing
to do with the length of the working day, that to make the fallacy apply to
the issue of work time requires two additional assumptions and that the
classical statement of the theory of hours downplayed the importance of such
ideas, "fallacious or otherwise", as motives for the labour movement's
pursuit of shorter working time.

There is, however, a key text in the economic literature in which a
lump-of-labour fallacy pertaining to the hours of work time does occur. That
occurrence is in Enrico Barone's 1908 article, "The Ministry of Production
in the Collectivist State". Subsequently, the error was uncritically
appropriated by Abram Bergson in his 1938 article, "A Reformulation of
Certain Aspects of Welfare Economics", which provides the analytical
framework for Samuelson's own discussion of the social welfare function in
the Foundations of Economic Analysis.

In his article, Barone constructed a welfare calculus on a presumably
limited set of assumptions about how individuals apportion their income
between different products at different prices. Income is treated as the
sale of services of all capital. In the case of labour, that income
represents the proceeds of a hypothetical twenty-four hours of labour, less
the expenditure on leisure time:

It is convenient to suppose -- it is a simple book-keeping artifice, so to
speak -- that each individual sells the services of all his capital and
re-purchases afterwards the part he consumes directly. For example, A, for
eight hours of work of a particular kind which he supplies, receives a
certain remuneration at an hourly rate. It is a matter of indifference
whether we enter A's receipts as the proceeds of eight hours' labour, or as
the proceeds of twenty-four hours' labour less expenditure of sixteen hours
consumed by leisure.

This "simple book-keeping artifice" neglected several complexities later
introduced by Chapman's theory of hours. First, the "certain remuneration at
an hourly rate" would have to be somehow expressed as a function of both the
actual number of hours worked and the optimal length of the working day.
Barone's "matter of indifference" in entering the proceeds of labour begs
the question of what the hourly rate would be for someone who "chose" not to
spend any of their income on leisure -- obviously, it would approach zero
after the first day or so of work. The extreme case expresses the paradox
for every intermediate case -- under any given conditions of production, the
hourly wage rate depends on and varies with the usual hours of work.

Second, Barone effaced any divergence between the optimal length of the day
for output and the optimal day from the perspective of the worker by blandly
assuming that the "technical coefficients of production . . . are determined
by the condition of minimum cost of production." Put more simply, workers
are free to work any number of hours they prefer, provided their preference
coincides with the technical condition of maximum output (and thus minimum
cost). Henry Ford at least was joking when he commented that customers could
have one of his cars in any colour they wanted -- so long as it was black.

Third, in "taking a step towards the real case" he assumed that profit
accrues to the entrepreneur who best organizes production in accordance with
the technical coefficients of production, an assumption at odds with
Chapman's demonstration that the employer who did so with regard to the
hours of work "would run the risk of paying the whole cost of the labour
value created by shorter hours and getting little in return; other employers
might secure and exhaust the new labour value."

In summary, from the perspective of Chapman's 1909 classical statement of
the theory of hours in a free market, Barone's 1908 assumptions were
hopelessly naive and untenable. What they amounted to was an assumption of a
fixed proportion between output and the hours of work, unaffected by the
distribution as between hours of work per worker and numbers of workers.
That is to say, Barone implicitly assumed a fixed amount of work that could
be spread around in any desired configuration -- a prima facie
lump-of-labour fallacy!

Paul Samuelson, whose folksy jeremiads against the lump-of-labour fallacy
have graced his introductory textbook for half a century, took no note of
the fallacy when it stood rock solid at one of the foundations of his own
economic analysis,  "For Barone, productive services can be treated simply
as algebraically negative goods and services. Thus decisions between more or
less work can be included in his welfare system."1

Writing 30 years after Barone, Abram Bergson would have had the opportunity
(which Barone, in 1908, could not have had) to address some of the
complications introduced by Chapman's 1909 theory of hours. Did he? Bergson
added only the refinements of "infinitesimal divisibility of services
performed" and the "the assumption that an individual's labor time may be
divided among the different types of work in any desired proportions" to the
Baronial edifice. Galloping mathematically into a logical and ethical void,
Bergson responded with the 20th century equivalent of angels dancing on the
head of a pin -- abstractio ad absurdum.

The assumption that an individual's labor time is infinitesimally
divisible-- whatever it's supposed to accomplish -- doesn't seem to
constitute a lump-of-labour fallacy. But by the same token, it is difficult
to imagine how infinitesimal divisibility avoids the fallacious construction
carried over from Barone's founding calculation. Samuelson is silent on the
issue in Foundations.

Spawning a lump-of-leisure fallacy

At one point in his discussion of social policy in the Foundations,
Samuelson argues against a minimum income on the grounds that it will
undermine work incentives. His apologetics for this conclusion open up an
abyss, "this is clearly bad social policy, not because I have a vulgar
prejudice in favor of work and against leisure. On the contrary, the
increases in real income in the years ahead probably will be spent in
considerable degree on leisure. It is wrong because it forces the rest of
society to give up leisure."2

This, then, is the logical conclusion of a social welfare calculus founded
on a lump of labour fallacy: that there is only a fixed total amount of
leisure to be spread around.


regards,

Tom Walker
http://www.vcn.bc.ca/timework/covenant.htm