The marginal utility of evasion
by the Sandwichman
Hick's simplifying assumption - that the given length of the working day be assumed to be optimal - is utter nonsense. It is not actually a simplification at all but an abnegation of the theory. Here's why: one immediate implication of Chapman's theory is that leisure time, no less than work time, is itself a factor of production. The worker who shows up for work tomorrow morning is, after all, as much a product of today's labor and leisure combined (and added to those of yesterday and all the days before) as are the commodities produced today a product of that worker’s labor power combined with raw materials, machines and overhead.
That, of course, is an old insight of Marx's, and it is a view reiterated in the 1920s by John Maurice Clark’s analysis in Studies in the Economics of Overhead Costs. To illustrate, Clark posed the extreme example of what would happen if a worker was compelled to continue working around the clock. Eventually, that worker’s hourly productivity would decline to zero as he or she collapsed from exhaustion. Clark doesn’t mention it, but of course the same thing would happen if, after a moderate day of work, the worker was to spend the rest of the day and night at the tavern repeatedly “bending an elbow.” To attribute a recuperative power to leisure assumes the leisure is being used in one way and not another, that it is put to the task of recuperation.
But never mind Marx or Clark, Chapman's theory confirmed the same thing from the standpoint of marginalist analysis. One doesn't resolve the difficulty of calculating the returns to various factors of production by simply asserting, without grounds, that one of them is something else. To do so is to replace analysis with fairytales.
By treating leisure as a "normal good" rather than as a factor of production, the canonical labor supply model opposes a theory not with another theory but with an evasion of what the earlier theory says. Is it a way of ploughing ahead with a failed and inherently ideological paradigm by simply putting on a particularly clumsy and obtrusive set of blinders? Or is there some inherent difficulty in communicating "genuine theory" that can readily be avoided by teaching pseudo-theory?
Next: Life is excessively complicated
Posted by sandwichman at January 30, 2006 10:52 AM