Sunday, November 9, 2008

Shorter Work Time Jubilee

by the Sandwichman

An American Moment: Your Vision
Start right now. Share your vision for what America can be, where President-Elect Obama should lead this country. Where should we start together?

Here's Sandwichman's Vision:

On November 2, 1865 – one month before the adoption of the Thirteenth Amendment to the US Constitution, abolishing slavery – the great antislavery activist and orator, Wendell Phillips, proclaimed his American vision from the platform of Faneuil Hall in Boston:

"Today one of your sons is born. He lies in his cradle as the child of a man without means, with a little education, and with less leisure. The favored child of the capitalist is borne up by every circumstance, as on the eagle's wings. The problem of today is how to make the chances of the two as equal as possible; and before this movement stops, every child born in America must have an equal chance in life."

The election of President Obama symbolizes progress that has been made in a century and a half toward fulfilling that vision. There is still far to go, though, before every child born in America has that equal chance in life. Wendell Phillips's devotion to the cause of labor shows the way – the "more American way."

In his Boston speech, Phillips addressed the Boston Eight-Hour League, which advocated adoption of an eight-hour working day. Seventy-three years later, the Fair Labor Standards Act of 1938 made the eight-hour day and the 40-hour workweek the law of the land. Another 70 years have passed since passage of the FLSA but the standard workweek remains frozen at 40 hours despite immense improvements in productivity and profound demographic shifts in labor-force participation.

The great eight-hour movement didn't aspire to an eight-hour day merely for its own sake or as the ultimate goal. Eight hours was envisioned as a step on the path to a higher ideal. More leisure would allow for education and uplift, which would lead to more effective citizenship and political participation. Through higher wages and lower unemployment, eight hours would bring about a more equitable distribution of the products of industry. Achievement of the eight hour day would inspire a movement for the six-hour day and, eventually, to industrial co-operation: "In this final arrangement, every man will combine in his own person the laborer and the capitalist." (While Phillips's usage conformed with the old convention of "men" and "sons" his colleagues in the Anti-Slavery Society and the Eight-Hour League included the women's rights pioneers, Susan B. Anthony and Elizabeth Cady Stanton).

The eight-hour theory articulated by Ira Steward, also an antislavery activist, was a uniquely American theory of social economy. It provided the philosophical foundation for the American Federation of Labor during its formative years. In the Depression of the 1930s, economist Dorothy W. Douglas considered the theory to be "strangely apposite" to the economic problems of that time. Historian Lawrence Glickman credited the eight-hour theorists with establishing the concepts of a living wage and a high standard of living for working people.

Ironically, in the 1930s big-business opponents of the Roosevelt New Deal hijacked Wendell Phillips's terminology of the better, nobler, "more American way." On 60,000 billboards erected across the country, the National Association of Manufacturers claimed credit for the "World's Highest Standard of Living", "World's Highest Wages" and "World's Shortest Hours of Work." A decade later, their Republican allies in Congress passed the Taft-Hartley Act to enable rolling back those higher wages and shorter hours.

A century ago, Sydney J. Chapman, a star pupil of Alfred Marshall, the "father" of modern neoclassical economics, presented his theory of the hours of labor. That theory overturned what Lionel Robbins called "the naïve assumption that the connection between hours and output is one of direct variation." Coincidentally, it confirmed key elements of the theory proposed by the Boston machinist, Ira Steward. In the 1940s, economist John Maynard Keynes argued that reducing the hours of work was one of three ingredients of a cure for unemployment and, furthermore, that it was the "ultimate" cure.

Economists today, though, shun discussion of shorter hours like the plague. They disparage policies for reduced working time as being based on an imaginary "lump-of-labor fallacy." Few of them have heard of Ira Steward's theory or have any idea that respected economists like Sydney Chapman, John Maynard Keynes or John R. Commons also supported progressively reducing the hours of work. A veil of ignorance and arrogance has descended in textbook economics over the issue of the hours of work. Is it any wonder then, that in the face of the greatest economic challenge since the depression, economists can think of nothing better than to call for yet another fiscal stimulus package, yet another interest rate cut and yet more bailouts of banks and corporations?

It is unrealistic to think that the Obama administration would consider implementing a policy of reducing the hours of work in the absence of strong popular support for such an action. It would be my hope, though, that the new administration could at least research the notion and review, with an open mind, the historical and economic case for shorter working time. Then, as the same-old, same-old economic policies of fiscal stimulus, interest rate cuts and bailouts prove their futility – which they will – and as unemployment continues to mount month after month, an in-depth understanding of the "strangely apposite" theories of Ira Steward and Sydney Chapman might ultimately prove useful in formulating substantive, innovative responses to the economic emergency.

Inscribed on the Liberty Bell in Philadelphia is the Bible verse, "Proclaim LIBERTY throughout all the Land unto all the inhabitants thereof." The phrase comes from Leviticus 25:10 in the Old Testament and refers to the ancient custom of the Jubilee year in which slaves were freed and land returned to former occupants who had lost it through indebtedness. Abolitionists in the 1830s adopted it as their slogan and gave the bell its current name. In 1868, when Congress passed a law establishing an eight-hour day for laborers, mechanics and other workers in federal government employment, it was hailed a a "Jubilee of Labor."

My American vision foresees resuming the progressive reduction of the hours of work – with its associated increases in leisure and wages and decreases in unemployment and insecurity, as the surest way to "Proclaim LIBERTY throughout all the Land unto all the inhabitants thereof" and to ensure that "every child born in America must have an equal chance in life."


Anonymous said...

The "standard workday" may be eight hours -- but please note the large class of "exempt" employees, who are not paid extra for extra hours worked, and who have created much of the enormous increase in productivity that has paid for the enormous compensation packages for corporate executives.

Corporations have learned how to routinely extract fifty and sixty hour workweeks from their exempt employees by simply assigning far more work than can be completed in forty hours.

And so I worked last weekend, and the weekend before, and in an hour or so I'm going to to put in another four hours of unpaid overtime.

jsalvati said...

Is there a relatively short introduction to the arguments in favor of mandatory shorter work hours? You've talked about this a lot, but so far it doesn't make a lick of sense to me. Something aiming to convince someone with libertarian sensibilities, would be extra helpful.

Sandwichman said...

Well, jsalvati, tell me this: is there a relatively short introduction to the arguments in favor of mandatory libertarian sensibilities?

My suspicion is that if what the Sandwichman posts here "doesn't make a lick of sense" to you, then you may be dissatisfied with whatever else I might recommend. Otherwise, I might recommend Stephen Leacock's "Unsolved Riddle of Social Justice" or Bruce O'Hara's "Working Harder Isn't Working" or... well, you get the picture.

It's entirely possible that you have certain preconceptions that would make it very hard to persuade you unless I knew what those preconceptions were. Generally, people tend to assume that one hour of work equals one unit of output, something that is demonstrably wrong but nevertheless often hard for people to grasp.

People also tend to assume that wages are more or less determined by output, that price is determined by the interaction of supply and demand on the market and so on and so forth. Some of these things are ingrained tenets of conventional economics. Most of them are demonstrably wrong. But if you start from those assumptions and from the mistaken notion that they are your own ideas and not something you have been indoctrinated with, it's probably going to be difficult for me to persuade you otherwise.

But that's O.K. We can still carry on a friendly conversation. I just don't harbor any illusions about "convincing" you. My writings are intended to lend aid and comfort (and hopefully some background information) to folks who more of less spontaneously have already persuaded themselves about the benefits of, and social necessity for working less.

Daniel Becker said...

The need to consider the work day is found in the question: What do we want our economy to do?

Today, at angry bear, I ask just that. Without asking this very basic question, we will never get ourselves out of the cycle of repeating history. Instead, we will continue to fix the economy with no real purpose to having an economy. I would hope that some economist would understand this and pose the question. It would complete their profession and actually make their profession relevant to society.

In simple terms, we can keep letting our engineers tell us how an engine works as we proceed to build an ever bigger engine or we can figure out what we want this engine to do for us and have the engineer tell us how to do it and if we are succeeding.

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The Big Mook said...

November 9, 2008 11:54 PM
Thebigmook said...

Here is a 4 word bulleted sentence aimed towards those libertarian sympathies.

" Work Hours are Taxes."

Replace the word "taxes" in the libertarian, neo-conservative, and Austrian economist texts with the word "hours" and this should help you in your desire to be convinced to join my brother Tom's crusade for shorter hours.

The case for shorter hours is as patriotic, libertarian, progressive, ecologically sound, and anti-government as any anti-tax argument. With the added value that a shorter work week can reduce fuel consumption without reducing productive capacity.
That will further reduce US dependence on foreign oil, which, everyone agrees, will only increase our national security.

Sorry, I went on. I go back to simple:

"Work hours ARE taxes" -lower them, shorten them. - Jim Walker

jsalvati said...

OK, lets walk through my priors:

*I do not assume that 1 hour of work = 1 hour of output, decreasing marginal returns obviously exist
*I do generally assume that compensation is equal to marginal output and that prices are mostly determined by the effect of supply and demand

My major off-the-bat objection is that I would expect employers and employees to come to a number-of-hours deal that minimizes overall costs (to the employer and the employee). This would obviously be strongly affected by the declining marginal product of labor. Any theory that recommends some type of mandatory reduction in hours worked has to explain why this does not occur or why it is a confused objection (as in Q: "why doesn't it rain cars?" A: "that's confused question; read about Physics").

Your response to me seems kinda silly. The diplomatic response was not "sorry, unteachable; this is not for you", but "well, there's no 'short' thing you can read; you probably need to read up on X, Y and Z and then read book A on Chapman's theory of Labor (or whatever)".

jsalvati said...

Perhaps, I should have been more clear. When I said "doesn't make a lick of sense to me," I didn't mean "what you say is obviously wrong" (even if I presume you to be wrong, which I do) I meant "I am confused by what you say enough to think that there is some sort of major paradigm I have missed."

Sandwichman said...


"I do generally assume that compensation is equal to marginal output and that prices are mostly determined by the effect of supply and demand."

So, with decreasing marginal returns to hours worked and compensation equal to marginal output, employers pay higher wages for a shorter working day, right? Glad to hear it. How does that account for time-and-a-half for overtime? Just saying.

I'm afraid that what you do assume implicitly relies on another assumption that you don't think you assume.

The long pieces I'm serializing -- by Gunton and about Chapman -- address discrepancies in the neoclassical paradigm. At a deep level, marginalism crosses over to the dark side and borrows contradictory assumptions (that it has formally renounced) from classical political economy.

Again, Chapman demonstrated quite clearly - and to the satisfaction of the economics establishment of the day - that your off-the-bat objection doesn't hold. Following the standard assumptions about competitive markets and marginal product compensation, employers and employees don't arrive at an optimal. cost-minimizing solution for the hours of work.

So the theory I'm presenting here explains exactly what you say it has to explain. But can all this be explained in a short, easy-to-read piece? Maybe eventually, once everyone's cards are on the table.

Steve Roth said...

Sandwichman: First to praise your writings, which I think cut to the quick of our economic situation.

Cutting even quicker, perhaps, I'd suggest that some form of redistribution--shorter work hours and/or other methods--is actually necessary for a modern, highly productive economy to operate. I wrote this up at more length here: