Sunday, January 31, 2016

Business Ideology and Textbook Lore: from Muddle to Model

by the Sandwichman

Thanks to Google Books, the Sandwichman is boolean-mining a century of textbook lore. Nearly a decade ago I did a similar thing with JSTOR, the full-text journal database. What I'm looking at is how and when my selected piece of economics textbook lore -- the lump-of-labor fallacy -- got introduced and transformed.

The remarkable thing to note, so far, is the resurgence of the phrase in Economics discourse in the first decade of the 21st century. There has been a sharp increase in the number of books published since 2000 that cite the lump-of-labor fallacy, most of them tacitly assuming its legitimacy and authenticity.

To begin, I would like to review a few key benchmarks that are being confirmed as I dredge several hundred books indexed in Google Books. After that, I will to mention some important associations -- and dissociations -- of the expression with restriction of output, shorter working time and make-work.

The term "lump work" appears to have first appeared in print in Henry Mayhew's magnificent London Labour and the London Poor, which was serialized from 1849 to 1850 in the Morning Chronicle. It referred to a system of labor sub-contracting common at the time on the docks and in the building trades in England. Later, the system came to be known as "sweating", particularly in the clothing industry and is more commonly known as piece-work. Nothing comes up in Google Books to challenge the source of the term with Mayhew and, presumably, his documentation of a slang term.

The "Theory of the Lump of Labour" was probably coined by D.F. Schloss in the early 1890s. Schloss was an investigator on Charles Booth's survey of working conditions and poverty in London, essentially a replay of Mayhew's study. In Schloss's usage, the term is anecdotal and refers to workers' objections to the piece-rate system. His usage also alludes to complaints from employers and economists against restriction of output by workers and their contention that it is explicit aim of union rules to enforce such restriction. Again, there are several additional pieces of textbook evidence confirming Schloss as originator of the "theory" and none contradicting it.

Schloss's use of the phrase clearly connects it with the notion of restriction of output and particularly union regulations resulting in such restriction. But it is notable that Schloss seeks to present a balanced view of the question. In other words, workers have legitimate grievances against work speed-up and employer "sweating". On the other hand, they take their objections too far in the other direction if they suppose that they will be better off collectively by withholding effort.

Schloss's textbook, Methods of Industrial Remuneration was published in England in 1894. The chapter in question appeared in 1891 as a journal article. The next earliest textbooks I could find mentioning the lump-of-labor theory or fallacy were published in 1903 and 1904 and were American. The timing may be significant. There had been a controversial and failed Engineers' strike for the eight-hour day in Britain in the late 1890s followed by a feature series in the London Times attacking unions. Both of those events seem to have influenced an aggressive anti-union campaign in the U.S. led by the National Association of Manufacturers.

At this point, I don't think it is useful to argue that economics textbook authors were voicing support for the employers' political views. It's just that restriction of output and the lump of labor were topical. What is of more interest is that initially the anti lump-of-labor claims were directed at objections to the introduction of new machinery, not demands for shorter working time. So far, the earliest textbook I've found that fuses the lump-of-labor objection to demands for shorter hours is Frank Fetter's 1916 Economics. A 1904 textbook by Fetter discussed the lump of labor in connection with machinery, but not hours.

Although Fetter's 1916 textbook connected demands for shorter hours with the lump-of-labor notion, he did also discuss several good reasons for reducing the hours of work and concluded that doing so may be welfare-enhancing even in circumstances where it reduced output to some degree. Fetter didn't identify welfare with income or consumption of commodity. This brings me to the evolution of the fallacy claim first from an anecdote largely incidental to the issue of working time to a claim fused with that issue and finally to its status as the "decisive rebuttal" of the job-creating potential of reduced working time.