Thursday, November 24, 2011

ABOUT TIME: Examining the case for a shorter working week

ABOUT TIME: Examining the case for a shorter working week
Wednesday, 11 January 2012 - 6:00pm - 7:30pm

Public Lecture at the LSE


As the economic crisis deepens, this is the moment to consider moving towards much shorter, more flexible paid working hours - sharing out jobs and unpaid time more fairly across the population.

nef would like to invite you to an event that takes forward the ideas from its highly acclaimed report 21 Hours to examine how this could help to address a range of urgent social, economic and environmental problems we face.

On 11 January, we are bringing together a panel of leading experts in partnership with the Centre for Analysis of Social Exclusion (CASE) at the London School of Economics:

  • Juliet Schor, Professor of Sociology at Boston College, and author of Plenitude: The New Economics of True Wealth, and The Overworked American.
  • Lord Robert Skidelsky, Emeritus Professor of Political Economy at the University of Warwick and biographer of J. M. Keynes, and Dr Edward Skidelsky, University of Exeter, and co-authors the forthcoming book, How Much is Enough? Economics and the Good Life.
  • Tim Jackson, Professor of Sustainable Development at Surrey University, and author of Prosperity without Growth.

The evening will comprise of a public lecture followed by a drinks reception with the speakers. We would love for you to join us.

If you are interested in attending please RSVP to Cam Ly.

Save the date! This is an open conference, with places available to all on a first-come-first-served basis. Please arrive early to guarantee your place in the main theatre. Join us afterwards for a drinks reception at 7.30 pm.

Mullets Held in Haircut Crime Wave

Headlines that write themselves...

FILE - In this Oct. 19, 2011 file photo, from left: Johnny Mullet, Lester Mullet, Daniel Mullet, Levi Miller and Eli Miller wait to make their pleas in Holmes County Municipal Court in Millersburg, Ohio. The five men, along with reputed Amish breakaway sect leader Sam Mullet and Emanuel Shrock, were arrested by the FBI and local sheriff's deputies early Wednesday, Nov. 23, 2011 on federal hate crime charges. (AP Photo/Mike Schenck, Wooster Daily Record, File)

Tuesday, November 22, 2011

The Harvard Schloss-Rasbotham Thimblerig: Step by Step

The shell game (also known as Thimblerig, Three shells and a pea, the old army game) is portrayed as a gambling game, but in reality, when a wager for money is made, it is a confidence trick used to perpetrate fraud. In confidence trick slang, this swindle is referred to as a short-con because it is quick and easy to pull off.
Another variation on the swindle is Three-card Monte. Jay Smooth:
As you probably know, every Three-card Monte setup has a Ringer. The Ringer's job is to pretend they're an objective, outside observer commenting on the game, when they're actually a part of the hustle who's there to help bamboozle the public into thinking this game is legitimate. So naturally if we stand next to the game and start telling everyone that the game is rigged, the Ringer is going to flip on us and start doing everything they can to make sure nobody listens to us. They're going to tell everyone that we're a bunch of losers who are just hatin' because we don't know how to play the game. We're a bunch of cardgame-hating socialists. They're going to try everything they can to discredit us so they can protect that game that they're so invested in.
You've heard of banks that are too big to fail. Well, here's the swindle that's too big to bust. It's a real swindle of money -- stealing pensions from elderly ladies and old gents -- not just an intellectual shell game. But the intellectual shell game plays a crucial role. Here is how it works. Pay close attention.

1. Person M supports Policy X.
2. Person M believes B. (unsubstantiated allegation)
3. Person M supports Policy X because of belief B.
4. Belief B is false. (red herring)
5. Therefore policy X is false. (ignoratio elenchi)
6. Therefore policy Y is true. (either/or fallacy)

The above sequence involves not one but two logical fallacies and an evidence defect. The proposition in step 4 is moot. Whether B is true or false has no bearing on the truth of the allegation in step 2 or the logical fallacies in steps 5 and 6. It is the "red herring" that characterizes the most common form of the ignoratio elenchi fallacy. When challenged, the ringer will doggedly maneuver the debate back to step 4 and ask, pointedly, "what makes you think B is true?"

Actually, whether person M believes in B or not is also irrelevant to the fallacious conclusions of step 5 and 6. Even if B is false and even if M believes B, it doesn't follow that X is false or that Y is true. The fact that the ringer relies on a red herring is not itself proof that X is true or that Y is false.

Monday, November 21, 2011

Robin Wells Is Greg Mankiw Is Paul Krugman

Paul Krugman links to an INET commentary by Robin Wells (his spouse), "We Are Greg Mankiw… or Not?", with the disclaimer that she is speaking for herself. On the issue of "building trust" Wells states, "take a few minutes to discuss each side of the debate. Yet, also make clear that valuable class time won’t be wasted on debating viewpoints that are contradicted by the data."

Oh yeah? What about when the textbook dogma is contradicted by the data -- both historical and statistical? Here is the comment Sandwichman submitted at the INET site:

Sunday, November 20, 2011

Numero Pondere et Mensura

Autograph inscription by Sir Isaac Newton on frontispiece of a book:
Numero pondere et mensura Deus omnia condidit
Hoc symbolum suum honoris et benevolentiae
Gratia Dignissimo Doctissimoque huus Albi
Possessori posuit

[Number, weight and measure, God created all these things. I have placed this, my motto, for the honor and best wishes for the most worthy and learned possessor of this book.]
"In the Middle Ages the phrase 'Number, Weight, and Measure' had been used to indicate the essential unity and harmony of the world."

Friday, November 18, 2011

My Dinner with Maynard II: Keynes on Isaac Newton, Alchemy and Linear Regression

In 1936, Sotheby's auctioned off the Portsmouth Papers of Issac Newton. Keynes missed the auction but subsequently set out to acquire the Newton manuscripts from the buyers, concentrating on the papers having to do with alchemy. At his death, Keynes bequeathed his collection to King's College, Cambridge. The Newton-related papers of John Maynard Keynes are now accessible online at The Newton Project.

From "Newton, the Man," a lecture prepared by John Maynard Keynes and delivered by his brother, Geoffrey, in July 1946:

Father Knows Best

From The Scope and Method of Political Economy by John Neville Keynes:
The economic literature of every succeeding year embraces works conceived in the true scientific spirit, and works exhibiting the most vulgar ignorance of economic history and the most flagrant contempt for the conditions of economic investigation. It is much as if astrology were being pursued side by side with astronomy, or alchemy with chemistry.

Thursday, November 17, 2011

Money and Magic

Timely: Money and Magic: A Critique of the Modern Economy in the Light of Goethe’s Faust. By Hans Christoph Binswanger. Chicago: University of Chicago Press, 1994. Reviewed by William Darity Jr., History of Political Economy 31:1 1999 (excerpt):

Transmutation of the Greeks -- A Political Arithmetick

There are 5.8 marriages a year per 1000 population in Greece. With a population of around 11 million, that works out to around 65,000 marriages or 65,000 marriage partners of each sex. If half of the marriageable women (32,500) were transported to Germany each year and replaced with marriageable German women, in a generation or two the Greeks would be transmuted into Germans and the debt crisis would be solved!

You can send my Swedish Bank Prize to: Sandwichman c/o Ecological Headstand.

Tuesday, November 15, 2011

The Elixir of Commerce

McCulloch, J. R. (John Ramsay). Outlines of political economy : being a republication of the article upon that subject contained in the Edinburgh Supplement to the Encyclopedia Britannica : together with notes explanatory and critical, and a summary of the science / by John M'Vickar. New-York, 1825. The Making Of The Modern World. Web. 15 Nov. 2011.

Rasbotham, Dorning. Thoughts on the Use of Machines in the Cotton Manufacture. Addressed to the working people in that manufacture, and to the poor in general. Manchester. 1780. The Making Of The Modern World. Web. 15 Nov. 2011.

Wennerlind, Carl. "Credit-Money as the Philosopher's Stone: Alchemy and the Coinage Problem in Seventeenth-Century England." History of Political Economy, Volume 35, Annual Supplement, 2003, pp. 234-261.

Dorning Rasbotham's pamphlet evoked the image of alchemical transmutation. That was the inspiration for the working title for this serial posting, The Moral Philosophers' Stone. That notion of alchemy has led me to two additional sources ; a footnote by the American editor of M'Culloch's Outlines of Political Economy, John M'Vickar and the article by Wennerlind. M'Vickar's footnote shares Rasbotham's unrestrained enthusiasm for commerce but makes explicit the allusion to alchemy:

Monday, November 14, 2011

Under Any Circumstances?

How about these, reported by J. P. Kay in his pamphlet mentioned above?:
The operatives are congregated in rooms and workshops during twelve hours in the day, in an enervating, heated atmosphere, which is frequently loaded with dust or filaments of cotton, or impure from constant respiration, or from other causes. They are engaged in an employment which absorbs their attention, and unremittingly employs their physical energies. They are drudges who watch the movements, and assist the operations, of a mighty material force, which toils with an energy ever unconscious of fatigue. The persevering labour of the operative must rival the mathematical precision, in incessant motion, and the exhaustless power of the machine.
Well, maybe those working conditions don't sound so bad after all compared to the living conditions of the cotton workers Kay reported in his autobiography:
Manchester had then a very imperfect municipal organization. Scarcely the first steps had been taken for the sanitary regulation of those parts of the town which were inhabited by the working classes. Consequently many thousands of the population lived in basement or cellar dwellings below the level of the street. These were often so imperfectly drained that the floors were either damp or covered with water, and I have had to make my way to the bedside of patients by stepping on bricks placed in the water of the flooded floors. The houses were often built back to back, and therefore without thorough ventilation, or yards, or proper conveniences. The streets throughout Ancoats were, for the most part, unpaved. Many of them were raised by accumulated cinders, rubbish, and offal considerably above the sills of the doors of the cottages. These roads were often ploughed by deep ruts in which water and filth stagnated, and they generally constituted the ‘middin’ on to which all the ejecta of the hou8es were thrown. There were few or no drains of any kind, and absolutely no arterial system of sewerage. To these parts of the town there was no systematic supply of water, and the wells and other similar sources must have been to a great extent contaminated by sewage. No municipal regulations interfered with the position of slaughter—houses, size— manufactories, tanneries and other foul or noxious trades. There were many courts from which ventilation was excluded, except through a narrow entry or from the top of lofty houses. I remember some of these which descended the steep banks of the Irk or Irwell, and were surrounded by all kinds of nuisances of noxious manufactories, and which consequently became the most fatal scenes of the ravages of epidemic cholera. At that time the labour of women and children in factories was not limited. The sanitary arrangements of the factories themselves were extremely imperfect; the hot air was often foul with odours, and obscured with dust and the ‘fluff’ of the cotton. The hours of labour were injuriously extended to twelve, and in some of the inferior mills even to fourteen hours a -day. Very few schools were open except on Sunday. The discipline of the mill, which was as strict as that of a military battalion, and the long hours of labour were, I think, the most effectual restraints on the population, which might otherwise have been driven to greater excesses of sensual indulgence, for their homes had few attractions, and the municipality had done little to promote their health or comfort.

to be continued...

Sunday, November 13, 2011

The Moral Philosophers' Stone: A Compleat History of 'A Certain Quantity of Labour to be Performed'

Two weeks ago a hunch about Charles Dickens and Edward Carleton Tufnell led me to the discovery of what I surmised might be the prototype of the idea that has come to be known to economists as "the lump of labor." To my surprise, it was a subtle and articulate defense by a fairly prominent early 19th century political economist of the proposition that "...there is a certain quantity of work to be done; and this quantity, generally speaking, does not admit of being much extended, merely on the temptation of labour being offered at a cheaper rate..."

The author was the Scottish church leader, Thomas Chalmers, whose neglected 1808 treatise on "the Extent and Stability of Natural Resources" has been described by A. M. C. Waterman as a "missing link" between T. R. Malthus and David Ricardo. Chalmers's later article appeared in the May 1820 issue of the Edinburgh Review, the flagship journal of Whig political economy.

Alas, my Eureka moment was destined to be short-lived, however, because one week later, while searching the Goldsmiths'-Kress archives for a quote from James Phillips Kay's The Moral and Physical Condition of the Working Classes Employed in the Cotton Manufacture in Manchester, I discovered an even more venerable specimen in a pamphlet signed "A Friend of the Poor" but attributed to a gentleman with the picturesque handle of Dorning Rasbotham, Esq. The 1780 pamphlet, "Thoughts on the Use of Machines in the Cotton Manufacture," was written in response to disturbances occasioned by the introduction of Richard Arkwright's spinning jenny. The following passage contains the tell-tale phrase, "a certain quantity of labour to be performed" and pronounces the alleged principle false:
There is, say they, a certain quantity of labour to be performed. This used to be performed by hands, without machines, or with very little help from them. But if now machines perform a larger share than before, suppose one fourth part, so many hands as are necessary to work that fourth part, will be thrown out of work, or suffer in their wages. The principle itself is false. There is not a precise limited quantity of labour, beyond which there is no demand. Trade is not hemmed in by great walls, beyond which it cannot go. By bringing our goods cheaper and better to market, we open new markets, we get new customers, we encrease the quantity of labour necessary to supply these, and thus we are encouraged to push on, in hope of still new advantages. A cheap market will always be full of customers.
Now, "a certain quantity of work to be done" was part of the the dictionary definition of the verb, to task, that is, to assign a person to perform a certain amount (and kind) of work within a particular time and place. It is useful to keep this definition in mind because the difference between Rasbotham's "certain quantity of labour" and Chalmers's "certain quantity of work" commences in a not-so-subtle shift from an indefinite abstract possibility to a finite empirical fact. But the latter fact is not some crude, static "assumption" -- it is a theoretically-refined empirical prediction, which takes into account both the abstract indefiniteness and the practical constraints upon realizing that theoretical potential.

In terms of both chronology and demonstrated familiarity with the "founding fathers" of classical political economy, Chalmers must be presumed to have an edge over Rasbotham. This is not to say that he is necessarily right, only that it would be presumptuous to dismiss his claim peremptorily -- to "view [it] with contempt," as Paul Krugman put it.

In modern terms, the second part of Chambers's sentence -- "...this quantity, generally speaking, does not admit of being much extended, merely on the temptation of labour being offered at a cheaper rate..." -- expresses the concept of the price elasticity of demand. In fact, Chambers uses the term, "elasticity," to describe the phenomenon. By contrast, Rasbotham's pamphlet deals optimistically in stark dichotomies of good versus bad effects, with the preponderance of expected benefits rendering "some little difficulty, in particular cases... a sacrifice we ought to make chearfully for the common good."

In an 1827 essay on the progress and prospects of the British cotton industry, John Ramsay M'Culloch judged Rasbotham's opinion as having been proven sound by the results, employment rising from less than 30,000 in 1767 to nearly a million fifty years later, concluding "There is, in fact, no idea so groundless and absurd, as that which supposes that an increased facility of production can under any circumstances be injurious to the labourers" [emphasis added]. Not under any circumstances?

continued: see The Elixir of Commerce

"Whilst the CITATION Engine Runs..."

"Whilst the engine runs the people must work men, women, and children are yoked together with iron and steam. The animal machine breakable in the best case, subject to a thousand sources of suffering is chained fast to the iron machine, which knows no suffering and no weariness." -- mistakenly attributed to James Phillips Kay, The Moral and Physical Condition of the Working Classes in the Cotton Manufacture, "page 24"
The origin of the above error was apparently A History of Factory Legislation by B. L. Hutchins and A. Harrison, published in 1903. Subsequent authors have cited Kay as the source, often without acknowledging where they actually read the quote. The two quotes below were presented consecutively in The History of the Cotton Manufacture in Great Britain by Edward Baines, 1835.
While the engine works, the people must work. Men, women, and children, are thus yokefellows with iron and steam; the animal machine – fragile at best, subject to a thousand sources of suffering, and doomed by nature, in its best state to a short-lived existence, changing every moment, and hastening to decay – is matched with an iron machine insensible to suffering and fatigue; all this moreover, in an atmosphere of flax-dust, for 12 or 13 hours a day, and for six days in a week. -- Charles Turner Thackrah, The effects of arts, trades and professions and of civic states and habits of living on health and longevity : with suggestions for the removal of many of the agents which produce disease and shorten the duration of life- 2d ed., 1832.
The operatives are congregated in rooms and workshops during twelve hours in the day, in an enervating, heated atmosphere, which is frequently loaded with dust or filaments of cotton, or impure from constant respiration, or from other causes. They are engaged in an employment which absorbs their attention, and unremittingly employs their physical energies. They are drudges who watch the movements, and assist the operations, of a mighty material force, which toils with an energy ever unconscious of fatigue. The persevering labour of the operative must rival the mathematical precision, in incessant motion, and the exhaustless power of the machine. -- James Phillips Kay, The Moral and Physical Condition of the Working Classes in the Cotton Manufacture, 2d ed., 1832

The Ecological Headstand -- One Year Old

Karl Marx is said to have stood Georg Hegel's idealistic philosophy on its head by proposing – following the lead of Ludwig Feuerbach – that material circumstances shape ideas rather than the other way around. William Rees co-developed the concept of the Ecological Footprint, an estimate of the impact on ecosystems imposed by human activity.

Thursday, November 10, 2011

Jobs, Liberty and the Bottom Line + 1

One year ago, November 11, 2010, I uploaded Jobs, Liberty and the Bottom Line [embedded below the fold] to Scribd. Since that date it has received 3,823 "reads" with an average engagement of 6 minutes and 17 seconds for a grand total of 400 hours and 21 minutes of reading.

Wednesday, November 9, 2011

My Dinner with Maynard: “On this point you are more Keynesian than I.”

Keynes to J. M. Clark, July 26, 1941:
As you will have gathered the other evening, I agree with what you say about the danger of a 'school,' even when it is one's own. There is great danger in quantitative forecasts which are based exclusively on statistics relating to conditions by no means parallel. I have tried to persuade Gilbert and Humphrey and Salant that they should be more cautious. I have also tried to persuade them that they have tended to neglect certain theoretical considerations which are important, in the interests of simplifying their statistical task.

From "Recollections of a Dinner for John Maynard Keynes," F. Taylor Ostrander, (2002) Research in the History of Economic Thought and Methodology, Volume 20-A, pages 43–50.
Leon Henderson arranged and was host of the dinner for Keynes. It was held on Tuesday June 10, 1941 in a private dining room at the National Press Club. Present were Keynes, Henderson and his two deputies Ken Galbraith and Joe Wiener and his guests: Sumner Pike, a member of the Securities and Exchange Commission; Isador Lubin, one of the six assistants to the President; Professor Jacob Viner, economic consultant to Secretary Morgenthau; and John Cassels.

Also present were two senior advisors to Henderson, Columbia Professor J. M. Clark and Duke Professor Calvin B. Hoover.


Everyone present knew Keynes’ famous brochure published in early 1940, How to Pay for the War, in which he advocated very strong fiscal restraint on civilian consumption including “compulsory saving.” Most were also aware of the National Income White Paper issued at the time of the Budget speech in March 1941, just three months before the dinner, in which its authors, James Meade and Richard Stone, working in collaboration with Keynes, had buttressed his view of the need for strong anti-inflationary wartime fiscal policy in Britain. Predictably, in his after-dinner talk Keynes repeated those views he had set out before and applied them to the American scene. Although the U.S. was not yet at war, Keynes urged increased fiscal restraint in the U.S. in order to be better prepared to prevent inflation resulting from our defense build-up and Allied purchases of war materials.

A general discussion followed Keynes’ long and detailed talk. Walter Salant and Don Humphrey, who sat opposite Keynes at the inside of the U-shaped table, argued strongly that increased fiscal restraint was not then needed in America as it would inhibit further progress in reducing unemployment. Challenging Keynes, they argued that Keynesian principles required that all resources be fully employed before applying fiscal restraint.

Keynes responded to their argument, gently but without giving any ground. The two young American economists continued to argue with the famous man until some of us felt it almost embarrassing to watch. Finally Keynes, obviously somewhat displeased, pushed his chair back from the table and brought the debate to an end as he said, rather sharply, “On this point you are more Keynesian than I.” It was an electrifying moment, never to be forgotten!

The four-day week, solution to the crisis?

The four-day week, solution to the crisis?
Pierre Larrouturou is one of the most ardent defenders of the 32-hour workweek. Wishful thinking in a financial crisis? A utopia when Manuel Valls and part of the left want to forget the 35 hours? On the contrary! The 32 hours have already been implemented in a few pioneering companies. For the economist, the reduction of working time remains today one of the safest drivers in the fight against unemployment.

Tuesday, November 8, 2011

Towards a New Manifesto

At The Utopian (h/t to Chris Bertram): "In 1956, Theodor Adorno and Max Horkheimer sat down to write an updated version of the Communist Manifesto. These are previously unpublished notes from their discussions."
12 March 1956 (as recorded by Gretel Adorno and translated by Rodney Livingstone.)

Horkheimer: Thesis: nowadays we have enough by way of productive forces; it is obvious that we could supply the entire world with goods and could then attempt to abolish work as a necessity for human beings. In this situation it is mankind’s dream that we should do away with both work and war. The only drawback is that the Americans will say that if we do so, we shall arm our enemies. And in fact, there is a kind of dominant stratum in the East compared to which John Foster Dulles is an amiable innocent.

Adorno: We ought to include a section on the objection: what will people do with all their free time?

Horkheimer: In actual fact their free time does them no good because the way they have to do their work does not involve engaging with objects. This means that they are not enriched by their encounter with objects. Because of the lack of true work, the subject shrivels up and in his spare time he is nothing.

Adorno: Because people have to work so hard, there is a sense in which they spend their spare time obsessively repeating the rituals of the efforts that have been demanded of them. We must not be absolutely opposed to work...

Sunday, November 6, 2011

"Whilst the engine runs the people must work..., women and children yoked together with iron and steam. The animal machine - breakable in the best case is chained fast to the iron machine, which knows no suffering and no weariness." -- mistakenly attributed to James Phillip Kay

"If algebraical symbols lead to more accurate results, no one can rightly object to their use. In this case they lend an appearance of definiteness to conclusions whose accuracy is conditioned by the assumptions from which they proceed; assumptions which are often themselves "unverified probabilities," while the very exactness of the equation form is a temptation to choose assumptions that are far removed from life but will fit the Procrustean formula." -- John Maurice Clark, 1913

Friday, November 4, 2011

Dismal Science + Repressive Harmony = Cheerful Orthodoxy

"Do I contradict myself? Very well, then I contradict myself, I am large, I contain multitudes." -- Walt Whitman
Both classical political economy and neoclassical economics are self-contradictory. That is not a bad thing per se. What is pernicious is the neurotic impulse to erase or ignore evidence of that contradiction and banish the internal voices of dissent from historical memory.

Thomas Chalmers and Sir Sydney J. Chapman were both "by no means inconsiderable, but hitherto neglected" figures in classical political economy and neoclassical economics, respectively. Chalmers was a contemporary of Malthus and Ricardo. Chapman, a student of Marshall and contemporary of Pigou and Keynes. Chalmers is famous for his very public exploits as an evangelical preacher and church leader. Chapman withdrew into the relative anonymity of a distinguished civil service career.

Their contributions to political economy have been regarded as "missing links". Chalmers's 1808 treatise, An Enquiry into the Extent and Stability of Natural Resources, according to Waterman (1991), "represents a revealing stage in the evolution of [the main tradition in political economy]." The method he employed of starting out with a highly abstract model and then progressively relaxing assumptions anticipated Ricardo by nine years.

Chapman's The Lancashire Cotton Industry was one of two "very promising steps towards the establishment of a Marshallian school of industrial economics... by two of his most distinguished pupils..." (Raffaelli 2004). There is an uncanny link between the two "not inconsiderable but neglected" thinkers. A passage in Chalmers's 1820 review article, "State and Prospects of Manufactures," contains a closely-argued exposition of how a relatively modest oversupply of labor in an industry can lead to a disproportionate fall in wages. His phrase, "there is a certain quantity of work to be done; and this quantity, generally speaking, does not admit of being much extended, merely on the temptation of labour being offered at a cheaper rate..." is an explicit (and appropriately qualified) statement of what much later came to be known as the "Theory of the Lump of Labour."

The assistant Poor Laws commissioner, Edward Carleton Tufnell, met with Chalmers in 1832 to discuss the latter's views on pauperism and in 1834 wrote Character, Object and Effects of Trades Unions, which contains a viciously distorted version of Chalmers's proposition, attributed, however as a "clumsy trick" of the cotton spinners' union. Tufnell's denunciation of that allegedly clumsy trick became the locus classicus of an anti-union polemic that evolved into the lump-of-labor fallacy claim.

In his history of the Lancashire cotton industry, Chapman cited Tufnell's polemic and commented that the shorter work day ideas of the Society for National Regeneration, although fundamentally sounded, were "frequently vitiated by appeals drawn" from the lump-of-labor doctrine. In his "Hours of Labour," Chapman debunked the prevailing prejudice among employers and economists that reducing the hours of work necessarily diminished output.

Repressive Harmony

Taken together, Chalmers's 1820 passage and Chapman's 1909 article sketch the outlines of a comprehensive short-period and long-period analysis of the dynamic effects of labor supply on wages and of working time on output. What stands in the way of such analysis being undertaken in the first place or being paid attention to if carried out is a cult preference for observing or assuming harmony between accumulation and public welfare.

"The utilitarian calculus is inapplicable to differences of kind," J. A. Hobson explained. As a consequence only quantitative increase counts as improvement. The alleviation of misery is not in itself a worthwhile economic goal unless it results in or results from an increase in aggregate material wealth. But that's still only the more benign face of repressive harmony.

The corollary to the utilitarian calculus is the practice of blaming -- and punishing -- the victim. This is not a superficial or momentary reaction but a deep-seated article of faith among adherents of the creed of "self-reliance." Edward Carleton Tufnell was an exemplary exponent of that creed. Born to considerable wealth, Tufnell had no occasion to doubt his conviction that the misery of people born into poverty or reduced to pauperism by circumstances beyond their control was their own damn fault.
The pauper's degradation, Tufnell believed, arose from the pauper's own lethargy and the existence of easy public subsidy. His dilemma was of his own making. Nothing annoyed Tufnell more than the constant applications made to the commissioners, as the 'poor man's friend' to interfere because the poor had insufficient relief. To achieve a status of economic independence was, in the evangelicals' view, a moral obligation for the pauper. Thus their preoccupation with morality did not run counter to their belief in laissez-faire and Ricardian economic theories, rather it was supplemental to them. -- R. J. Phillips
It occurred to me, while reading an account of Tufnell's career as an inspector of Poor Law Schools, that he may well have been the model for a Dickens character, such as Mr. Gradgrind or Mr. M'Choakumchild from Hard Times. In fact, one of the witnesses to the Royal Commission on the Employment of Children in Factories where Tufnell was an examiner, Robert Blincoe, may have been the model for Oliver Twist! Dickens is thought to have modeled his educational satire on the views of Tufnell's collaborator, James Kay-Shuttleworth, and wrote to a friend, "I am so dreadfully jaded this morning by the supernatural dreariness of [Kay-Shuttleworth], that I feel as if I had just come out of the Great Desert of Sahara where my camel died a fortnight ago."

When E. C. Tufnell died in 1886, he left an estate valued at 67,700 pounds, the equivalent in today's purchasing power of around $7,600,000.

Thursday, November 3, 2011

'The Canonical Classical Model of Political Economy' and the Lump of Labor

UPDATE November 10: Sandwichman has found an even more antique instance of the proto=lump-of-labour fallacy claim. Stand by for announcement.

In his 1991 article, "'The Canonical Classical Model of Political Economy' in 1808, as Viewed from 1825: Thomas Chalmers on the 'National Resources,'" A. M. C. Waterman speculated that Chalmers's 1808 treatise was a sort of missing link between Malthus's Essay on Population and Ricardo's Principles of Political Economy.

My interest in Chalmers arises from a passage in an 1820 Edinburgh Review article by him, "State and Prospects of Manufactures," in which Chalmers presented the following "fixed amount of work" proposition: "...there is a certain quantity of work to be done; and this quantity, generally speaking, does not admit of being much extended, merely on the temptation of labour being offered at a cheaper rate..." Chalmers presented a extremely interesting argument both in terms of a rationale for the "certain quantity of work" claim and an analysis of the consequences of the proposition. He presented a similar argument, and some identical phrasing, in an 1826 book, The Christian and Civic Economy of Large Towns.

What makes Chalmers's argument especially intriguing is that in August of 1832 E. C. Tufnell consulted with Chalmers in preparation for his activities on as a investigator for the Royal Commission on the Employment of Children in Factories. Tufnell subsequently authored a virulently anti-union pamphlet, Character, object and effects of trades unions, published anonymously in which he denounced the advocacy of the Ten-hour Bill by cotton-spinning operatives on the grounds that it was based on a clumsy "fallacy." My conjecture is that Tufnell's denunciation is the locus classicus of the lump-of-labor fallacy claim.

The lump-of-labor fallacy has been called "one of the best-known fallacies in economics." I dispute that, having written two published articles on the alleged fallacy that only dig deeper and deeper into paradox. The fallacy claim has been described by A.C. Pigou and Maurice Dobb as itself an ignoratio elenchi fallacy. But it seems to me that there is something even stranger going on here, considering the "missing link" hypothesis. I'll just speculate and say that perhaps the fallacy claim was (and is) an attempt to selectively dismiss some of the unwanted deductions from political economy while retaining others that are more congenial to the "system of natural liberty" orthodoxy.

Now we are confronted with not one but two "missing links": Chapman as the missing link between Marshall and Keynes in neoclassical and Chalmers as the missing link in classical political economy between Malthus and Ricardo.

On Second Thought

Yesterday, I posted a "Treasure Hunt," which on second thought I am cancelling because I realized I would be unable to correspond with scholars regarding some of the details of the newly discovered and extremely significant "lump-of-labor" quote without giving out clues.