Monday, June 30, 2008


by the Sandwichman

"'Well,' says a workingman, 'I should certainly be very glad to work less hours, but I can scarcely earn enough by working ten to make myself and family comfortable.'

"Sir, as strange as it may seem to you at first blush, it is a fact that your wages will never be permanently increased until the hours of labor are reduced."

I would like to open a can of worms and call into question the assumed divergence between environmentalism and consumerism. I am as guilty as anyone of promoting the idea that economic growth is bad or obsolete. But I have been reading extensively in the 19th century literature of the eight-hour movement. The first shock I got was discovering that "keeping up with the Joneses" was an Ira Steward invention. Steward was the author of first two sentences quoted before the jump.

I've been reading Steward, George Gunton, their critics and defenders through the prism of a century's worth of disparagement of the "old, old fallacy that eight hours a day will mean more men to be employed." I'm beginning to realize that the opponents of the eight-hour movement not only suppressed an astonishingly advanced economic theory, they also usurped and defiled the accomplishments and the aspirations of the movement. This is not to say that Steward and Gunton got everything right but there is an immense amount to learn from their writings and legacy.

Getting back to the argument about higher pay, at first glance it wouldn't seem to be in accord with the admonition of my friends in the Work Less Party to "work less, consume less, enjoy more." I propose that the solution to this riddle is that we don't need to consume less. We actually need to spend more.

Our culture's unsustainable environmental footprint doesn't come from consuming "too much" but from consuming the wrong things -- cheap crap. Ironically, the reason we're consuming the wrong things is because wages are too low. WE CAN'T AFFORD the good life. What Juliet Schor identifies as "overspending" could better be viewed as throwing money away on disposable stuff because we don't have sufficient time or income to indulge in uplifting AND MUCH MORE EXPENSIVE social activities such as, say, taking five years off work to write a book, paint, sing in the opera, or play soccer.

One of the things that struck me as I was comparing Cambridge Professor Alfred Marshall's writing to that of Boston mechanic, Ira Steward, is that the truly innovative thinking usually comes from outside the academy. An inordinate amount of the output of professional intellectuals consists of obscurantist rationalizations and repetition of the obsolete or the obvious. How many people would like to have the time and financial security to really develop their artistic talent, athletic ability or scholarly interest without it having to be a perilous and constricting career track?

So I'm tempted to say, "Sir, as strange as it may seem to you at first blush, it is a fact that your way of life will never become environmentally sustainable until your wages are increased as a result of the hours of labor being reduced."


Anonymous said...

1) work less --> less product
2) less product overall --> a decrease in real wage
3) Same money supply, less product --> inflation
4) An increase in nominal wage and a decrease in real wage can be true in the same time

Can we all simply not work, and then enjoy a better life? It sounds too good to be true.

Sandwichman said...

It sounds too good to be true.

Thank you, cogito, for summarizing the "official" objection to shorter hours. Employers and economists arrived at that objection by looking only at one side of the equation -- the supply side -- through the distorting lens of laissez faire ideology.

But as Ira Steward wrote 140 years ago,

It is but little more than three hundred years since everybody believed that the sun revolved around the earth. But Copernicus finally exploded this mistake and proved that the earth goes around the sun; and many have been the cases in which men have been forced to admit that the truth was exactly the reverse of all their past opinions or experiences.

We would be more inclined today to call the Copernican turn in economics "the Keynesian revolution," or to speak of the the mass consumption political economy of "Fordism." But if you really want to insist on your four-step rebuttal of shorter hours, cogito, I trust you will be consistent and insist that the world economy never recovered from the depression of the 1930s. And, of course, there's no such thing as advertising or credit cards. The New Deal and World War II also put the demand cart ahead of the supply horse, as has every "economic stimulus" package for the last 60 years.

Here's how Steward summarized the step in his theory:

1st. That more leisure, will create motives and 'temptations' for the common people to ask for more wages.

2d. That where all ask for more wages, there will be no motive for refusing, since employers will all fare alike.

3d. That where all demand more wages, the demand cannot be resisted.

4th. That resistance would amount to the folly of a "strike" by employers themselves, against the strongest power in the world, viz., the habits, customs, and opinions, of the masses.

5th. That the change in the habits and opinions of the people through more leisure will be too gradual to disturb or jar the commerce and enterprise of capital.

6th. That the increase in wages will fall upon the wastes of society, in its crimes, idleness, fashions, and monopolies, as well as the more legitimate and honorable profits of capital, in the production and distribution of wealth, and

7th. In the mechanical fact, that the cost of making an article depends almost entirely upon the number manufactured is a practical increase of wages, by tempting the workers through their new leisure to unite in buying luxuries now confined to the wealthy, and which are costly because bought only by the wealthy.

I should point out that Steward forgot to mention, in his summary, the role in his theory of the mitigation of unemployment. Reducing unemployment would both directly increase effective demand (from the formerly unemployed) and indirectly increase it by emboldening the workers to demand higher wages.

I know, I know: "lump of labor fallacy!" But I'm afraid the fallacy claim is based on a static description of economic activity. If, the lump-thumpers intone, we assume ceteris paribus that everything else remains constant, then for reduced working time to increase employment would have to be based on the assumption that there is also a fixed amount of work to be done (regardless of cost).

Well, get over your static economic models, folks. Luigi Pasinetti nailed it in chapter 5 of his Structural Change and Economic Growth. Even when starting from a condition of full employment, the uncompensated effects of technical progress would be to generate technological unemployment because demand cannot be expected to increase at the same rate and in the same proportions in which technical improvements reduce the requirement for labor.

Pasinetti's dynamic analysis does not "boil down to the commonsense proposition that technical progress gives society a choice between more (or new) goods or more leisure." Instead, it reveals "the fixed framework within which the choice has to be made" and, furthermore, the necessity of making such a choice if technological unemployment is to be avoided.

In summary, there will be progressively increasing unemployment from technology UNLESS people learn new needs or work less -- or both. The old saw about technology "creating more jobs than it destroys" is only true if demand materializes for the new products that technology rolls out.

In summary, cogito, your objections would be tenable in a world in which there was no technological change, no advertising, no consumer credit, no fiscal policy stimulus packages, etc.

That sounds too untrue to be good.

Sandwichman said...

Incidentally, cogito, I've offered a $10,000 prize to the first person who can refute my rebuttal of the lump-of-labor fallacy claim and have it published in a top-ranking economics journal. You've just recited the elements of the claim. If you can back that up with thorough and detailed examination of the economic processes supporting your assertion, please do. Come on, give it try, baby!

Anonymous said...

Isn't this kind of the Sam Vimes $50 boot paradox from terry Pratchett's Discworld books?

Sandwichman said...

$50 boot paradox?

Yes, there is a bit of that to it, indeed. There's also the element that if all the people who previously bought $10 boots could afford and switched to $50 boots, the price of $50 boots would come down.

Andy said...

I dunno about the "lump of labor" paradox, as I am not an economist (IANAE), I am however a cultural studies scholar.

And that, well, makes me wonder about the assumptions you are making about the relative environmental impacts of "the good life" vs "cheap crap." The upper class may like to present the impression of liking mostly opera and slow food, but I'm not sure that picture tells the whole story.

What about private jets, or for that matter, extensive air travel of any kind? Clearly this is an integral part of the life of a contemporary wealthy person, and one with a massive carbon footprint.

Lets not forget Al Gore's infamous energy wasting mansion.

Let's also not forget that what one consumes is not just based on the amount one has to spend, there are also matters of habit, taste, learned preference ("culture" to use a dirty word). Higher wages and more free time, for some, would almost certainly result in purchases of jet skis, monster trucks, high powered stereo equipment.

I'm not making an argument here for keeping people working long hours or keeping them poor. Both are inexcusable. Just that we may have to think about some other factors if we want to encourage environmentally friendly consumption (which might include items with a high cost in time and money like those you suggested).

Sandwichman said...

No question, andy, that my projection of more environmentally-sustainable wants if workers were better paid is speculative and offered as a provocation to thought. Your scenario of the proliferation of private jets is another possibility and it would be presumptuous to rule it out.

In fact, there's an uncanny parallel to just your scenario in the history of the private automobile. Henry Ford appropriated Stewardism for big business with his eight-hour day and $5-a-day pay. The comic strip, "Keeping up with the Joneses," was inspired by the novel, "Keeping up with Lizzie" by Irving Bacheller, about materialistic social aspirations in which car ownership and consequent debt played a central role.

The Model T Ford came to be known as the "Tin Lizzie" in deference to the novel. National Association of Manufacturers propaganda of the 1930s prominently displayed car ownership as the unquestioned symbol of the "World's Highest Standard of Living."

But... I would contend the dawn of the auto era was precisely the moment and the means by which the Steward philosophy was dislodged and replaced by a surrogate. We've been there and done that. So maybe we could learn by our mistake.

No guarantees, of course, but if humanity is truly beyond redemption, then to Hell with 'em!

Anonymous said...

I'd also take issue with the kinds of alternatives to consumption of cheap crap you put up.
(taking five years off work to write a book, paint, sing in the opera, or play soccer.)

These are all things that require unusual talents to do well. You are buying into the superstar economy.

More to the point: people buy cheap crap furniture because they don't have the money to buy the piece that will last them their whole lives and be handed down to their kids, beautiful as the day they bought it. They buy cheap crap "fast fashion" because things don't last more than a couple of years and look tired and dated even if they do. I want my new winter coat to still be in style in a decade; it will last that long. They'll buy eight pairs of shoes each for $50 in the space of a few years, because they can't afford the $400 in one hit to get a custom pair that really fit and will really last.

These are the alternative consumption choices that will reduce the resource footprint of our consumption patterns.