Friday, November 7, 2008

Missing: the strange disappearance of S. J. Chapman’s theory of the hours of labour (5) you don't? Part III

Although Hicks didn't explicitly introduce a simplifying assumption, that isn't the end of the story. Hicks discussed Chapman's theory and the optimal length of the working day in his chapter on the theory of individual labour supply (Ch. V). Later on in the book, though, Hicks turned his attention to the regulation of hours and working conditions (Ch. XI). Here Hicks no longer dealt with pure theory but with "reality" – at least with reality as Hicks perceived it. He announced at the beginning of Part II that it was, "now time for us to take a further step towards actuality" (p. 136). This was the moment Hicks had anticipated when he referred to "think[ing] back our arguments into a more cumbrous but more realistic form." Chapter XI was intended to present that 'more realistic' discussion of hours and working conditions than the purely theoretical discussion of Chapter V! But was it more realistic?

At the beginning of Chapter XI, Hicks credited Robbins with having conducted the "general study of the economics of hours-regulation" and declared that there was "no need for us to go over yet again ground which is by now sufficiently well trodden" (p. 217). After stating (without further explanation) that there was no material difference between the situations created by union demands for reduced hours and that created by demands for increased wages, Hicks surmised that it was "true that if the working day has previously been fixed at a length which is greater than the 'output optimum' the Union will not usually need to exert any considerable pressure in order to bring about a reduction" (p. 217). On the sole basis of that assertion, then, Hicks limited the rest of his discussion to a situation where union demands would reduce the hours of work below the hypothetical output optimum. If such a limitation had been proposed in a theoretical discussion, it would indeed have represented a simplifying assumption. As Hicks presented it, however, it was an alleged, but unverified 'fact' – a fact, moveover, that contradicted what theory would predict.

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.)

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