The Fundamental Truth of Basic Facts II

by the Sandwichman

In his article, "In Defense of the Longer Work Week," Harold G. Moulton offered a much more smoothly argued rebuttal of the thirty-hour work week bill than had Neil Carothers. The article appeared in the Annals of the American Academy of Political and Social Science early in 1936, accompanying an argument for the thirty-hour bill by the bill's sponsor in the Senate, Hugo Black.

Moulton was president of the Brookings Institute, which Rexford Tugwell described as "a kind of research organ for the conservatives." In the early months of 1933 Moulton and associates had drawn up detailed plans for the incoming Roosevelt Administration to accomplish "sweeping reductions in public expenditures, consolidation of bureaus, and elimination of government functions."

Moulton began his article by acknowledging two primary ideas underlying the proposal for a shorter work week. First, that the supply of labor chronically exceeded the demand for it and, second, that the shorter work week will generate greater purchasing power for workers and thus stimulate and promote economic recovery.

To evaluate the validity of these ideas, Moulton argued that "we must first have an accurate picture of the amount of goods and services which this country has produced at the time of its best performance, and the length of the work week that was then prevailing." Next, according to Moulton, we needed to ask whether the level of output prevailing at the peak provided an adequate standard of living for the population. Moulton concluded that the output in 1929 was not enough to supply an adequate standard of living for all, even if that output was divided equally.

The next question Moulton addressed was whether recent gains in efficiency were sufficient to enable a reduction in hours of work without sacrificing total output. He concluded that they weren't.

The principle that working hours should be reduced in proportion to increasing efficiency is utterly indefensible. It would freeze productive output and standards of living at the low level of 1919 or some other selected year. It would give us a static society in which progressively improving conditions for labor would be virtually impossible.

The careful reader may be left to wonder just how Moulton had extracted from a William Green quote (that advocates no such thing), the "utterly indefensible principle" that working hours be reduced in proportion to efficiency gains?

Having substituted a somewhat duplicitous discussion of output for the issue of imbalance between the supply of labor and the demand for it, Moulton then turned to address the issue of whether the shorter work week would stimulate business recovery. "In the first place," Moulton explained, "a great increase in pay-roll disbursements, unaccompanied by any increase in output, inevitably means a sharp increase in unit cost." Higher prices to the consumer would be the inevitable consequence of the increase in costs. Higher prices and higher wages combined would result in no increase in the standard of living.

Finally, Moulton addressed the shorter work week from the perspective of a relief measure for the unemployed. Here, he conceded that "a shorter work week would put people back on the pay rolls," objecting only that the 'real question' is who should bear the burden of relief, the workers or the American people as a whole? Moulton magnanimously declared that other (unspecified) methods than the shorter work week would be more equitable in providing relief to the unemployed. Besides not specifying which other methods he had in mind, Moulton declined to consider the political feasibility of those phantom methods.

Moulton's presentation was slicker than Carothers's but in the final analysis it relied on the same three flawed assumptions: that wages were paid out of a "fixed wages fund" consisting of a efficiency-optimized portion of the total output of industry, that the output of labor was proportionate to the hours worked and that aggregate hours worked were proportionate to hours per worker. The latter assumption was more of a rhetorical feint than an analytical error. Both Carothers and Moulton relied on the inattentiveness of the reader when they cuelessly segued from individual to aggregate hours.