Pencavel (1986) concluded that, considering the consistency with which empirical research produces values that violate the model's predictions, "the scientific procedure is surely to regard the theory as it has been formulated and applied to date as having been refuted by the evidence" (p.95). Other criticisms point out that the income-leisure choice model "cannot provide any substantive analytical predictions on the course of labor supply by an individual or a group" (Altman, 2001, 199) and takes no account of the non-pecuniary benefits of working (Farzin and Akao, 2006).
Derobert (2001) questioned the pedigree of the model, noting the paradoxical disappearance of labour, documenting bibliographical anomalies in the model's transmission and finding that the model's formal consecration by Tibor Scitovsky (1952) was accompanied by a warning about its pitfalls – specifically, that regarding leisure as a commodity may lead us to mistakenly assume there is a "conflict between the efficient specialization among workers and the efficient distribution of leisure" (p. 107). "It is much safer," Scitovsky went on to explain,
as well as more natural, to look at the face of the medal and concentrate our attention on work and the burden it involves, rather than on freedom from work and the satisfaction this yields. We can, if we like, think of work as a negative commodity, of its burden as a disutility or negative satisfaction, and of the earnings received for work as a negative price... (p. 107).Scitovsky's 'safer' and 'more natural' approach, however, would require abandoning the opportunity-cost value theory at the foundation of the income-leisure choice model, without which the model itself would cease to have any meaning.
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Abstract: Sidney Chapman's theory of the hours of labour, published in 1909 in The Economic Journal, was acknowledged as authoritative by the leading economists of the day. It provided important insights into the prospects for market rationality with respect to work time arrangements and hinted at a profound immanent critique of economists' excessive concern with external wealth. Chapman's theory was consigned to obscurity by mathematical analyses that reverted heedlessly to outdated and naïve assumptions about the connection between hours and output. The Sandwichman is serializing "Missing: the strange disappearance of S. J. Chapman's theory of the hours of labour" on EconoSpeak in celebration of the centenary of publication of Chapman's theory. (To download the entire article in a pdf file, click on the article title.)
i guess the question comes to what the opportunity cost is of downloading a 17 page paper, to figure out the argument.
ReplyDeletei liked tibor scitovsky's approach even if like walras, arrow-debreu, samuelson, etc. it simplifies everything to get a solvable ("scge") model.
i geuss he is a villain to the mirowski club. (rather than formalize, put it on a computer, and then re-formalize it using the chomsky hierarchy or recursion theory, to gain a more intuitive understanding, up to 0(n).
another pet peeve is the idea promoted that the concept of opportunity cost is somehow a new and really good useful idea. i see it as a very messy phrasing of the concept of marginal utility. sure, don't use 'income' to replace labor, or gdp to replace quality of life. but its the same logic. (there was a terrible example of opportunity cost logic somewhere about going to see a free eric clapton concert versus something you'd prefer but have to pay for. why people get jobs with such logic (i.e. based on really bad phrasing of the problem) is beyond me. i guess its behavioral econonomics (lie, cheat, steal to increase productivity. robert samuelson had a great one like this recently in the post on why inequality isn't really a big problem---i note h ginitis is into this too---reframe the problem into health care and school choice. put it in the mein kamfp and message to the black man file, subject to opportunity cost, of course.)
also, this analyses really neglects the true utility model. haven't you heard of the 70 virgins? men are born free, but they value chains. even calin was born free, like in the movie. haven't you seen hardcore punk? do you know the salaries in heaven? the great feeling after a 20 hour, productive day driving a truck on meth? where do these people come from? what about the disutility of living, as a price?
like energy in general relativity, which turns out to be zero if you count op the entire universe (but it can still inflate, due to the federal reserve, and the acceleration-multiplication principle (see the genius work by Einstein on compound interest), if one adds up all the labor, leisure, income, meth, it comes out to zero. this simplifies everything. the utility surface, or world is (choosing correct intertial reference frame)locally flat. even 'uncle tom' freedman knew that.
Huh?
ReplyDeleteDoes all that Media wrote reduce to: Wealth has privileges. Get used to it.
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--ml
it reduced basically to your entire life. you can lose it too. get jacked up.
ReplyDelete