The regulation of working time has been a controversial topic since at least the second decade of the nineteenth century when the Ten Hours Movement was active in Great Britain. How the hours of work are determined in the absence of explicit regulation is also controversial, with neo-classical economists arguing that the individual supply of labor time is based on workers’ choices between income and leisure while Marxists and institutionalists maintain that political power and economic circumstances are decisive. Further complicating the debate, Chapman’s major theoretical contribution to the marginalist analysis of the hours of labor has largely been neglected by neo-classical economists in the post-World War II era, thus hindering a potentially fruitful rapprochement between the various positions.
The stakes in the controversy extend beyond the number of hours worked in a day, a week or a year. Ultimately, the hours of work and the method or methods by which they are determined crucially affect aggregate income and its distribution, employment, and social welfare. Given this strategic role with regard to income distribution and social justice issues, it is not surprising that polemics and demagoguery have played their part in shaping the debate over the hours of work and their determination. Bosch has characterized that debate as frequently resembling “quasi-religious exchanges of articles of faith between opponents and advocates.” In Capital, Marx ridiculed Nassau Senior’s 1836 contention that the recently passed Factory Act would be ruinous to industry because, “the whole net profit [from an 11 1/2 hour day] is derived from the last hour.” Conversely, in the 1890s, John Rae was motivated to refute the implausible pronouncement by eight-hour day advocate George Gunton that adoption of the system in the United States would have the “direct and immediate effect” of creating over three and a half times as many new jobs as there currently were unemployed.
Over the course of the twentieth century, a particular polemic became ensconced in the discourse of mainstream economics. That is the claim that policies aimed at creating employment through limiting the hours of work are based on an erroneous belief in a fixed amount of work. Economists call this supposedly widespread delusion the “lump-of-labor fallacy.” Those who make the fallacy claim routinely fail to document occurrence of the belief and there are grave inconsistencies in their various explanations of why reducing the hours of work cannot alleviate unemployment. Rote repetition of the fallacy claim is thus a distraction that obstructs constructive dialogue about the hours of work, their determination and the social, political and economic appropriateness of policy interventions.
Posted by sandwichman at June 1, 2005 10:52 PMCan't wait for installment #2.
Question: At the margin, at any one given instant of time, is there not, in fact, a fixed amount of work?
If assuming a fixed amount of work is some kind of intellectual crime, how is such an assumption any different from the numerous other bizarre assumptions made by neo-classical economists all the time?
Just asking.
Posted by: bobbyp at June 18, 2005 08:38 AMbobby,
Thanks for your interest and thanks reminding me. I've uploaded part 2 now. Also, I've uploaded the entire draft to www.worklessparty.org/wlitblog/lumpdump.doc.
> Question: At the margin, at any one given instant of time, is there not, in fact, a fixed amount of work?
Certainly at a given time there is a given amount of work. But the reduction of working time involves a major transition from one state to another, not just from one moment in time to another. So it is fair to say that everything changes.
> If assuming a fixed amount of work is some kind of intellectual crime, how is such an assumption any different from the numerous other bizarre assumptions made by neo-classical economists all the time?
The answer is: it isn't any different. In fact, the objection by neoclassicals to the l-o-l fallacy is a colossal hypocrisy because the claim that shorter working time advocates necessarily commit such a fallacy is based on agreeing to a whole set of static neoclassical assumptions. To paraphrase, "Assuming every thing else is fixed, shorter hours could only increase employment if the amount of work was also fixed." Well, _they're_ the ones assuming every thing else is fixed in the first place. I went into this in my earlier paper "The 'lump-of-labor case' against work-sharing: populist fallacy or marginalist throwback."
The linchpin neoclassical assumption when they presume to mathematically model the l-o-l fallacy is the assumption that the given hours of work are optimal for production. That assumption is contrary to marginalist theory and empirical evidence about the relationship between productivity and the hours of work. It was proposed as a "simplifiying assumption" by John Hicks in 1932 with the proviso that the assumption should be subsequently thought back to more realistic assumptions. Mainstreamers don't bother and for good reason -- thinking it back to the more realistic assumptions demonstrates that the "simplifying assumption" is worthless, it produces a totally unreliable analysis. Better to pretend that the counter-factual is itself perfectly representative of reality. Of course, the neoclassical economists also conveniently forget the criticisms that were raised about the circularity of the measurement of capital in the Cambridge Capital Controversy.
The Sandwichman