"Was man made for the Sabbath?
Or was the Sabbath made for man?"
Rabbi Arthur Waskow from Philadelphia explains that Sabbath is a
_scientific_ principle -- undoubtedly the most profound and irrefutable
principle in economics. For the most part, economists don't even bother
trying to refute the principle of Sabbath. They simply ignore it. This is
especially true for mathematical economics because, from a strictly abstract
perspective, Sabbath implies the creation of something from "nothing". In
truth, the "nothing" that the mathematical economists abhor isn't "nothing",
it's simply not measurable as a factor of production.
The short passage I quoted from J.M. Clark doesn't do justice to Clark's
more extended discussion of labor as an overhead cost (Studies in the
Economics of Overhead Costs, pp. 357-385). Thanks to Brad's citation of the
Sabbath riddle, I've returned to Clark's chapter on labor and gained a
greater appreciation of the extent to which his analysis is grounded in a
"Sabbatical" view of the relationship between fatigue and rest.
What Clark calls the "usual analysis of the human cost of labor" holds that
fatigue increases with the number of hours worked until a point is reached
in which the increasing physiological cost to the worker outweighs the value
of more pay. It is this "fatigue of the marginal hour" argument that
underpins the view of labour as a variable cost.
But, Clark argues, "most of the variations in work have nothing to do with a
voluntary choice of a longer or shorter work-day." Therefore most of the
cost of labor doesn't vary with output but arises from such factors as
involuntary idleness, monotony of the work and the foregoing of alternative
activities. The wage system can't even approximate those costs. In fact,
under conditions of high unemployment (cyclical, structural or techological
u.), the wage system *intensifies* distortions in the apportioning of costs.
This is exactly contrary to neo-liberal think tank hallicinations that lower
wages stabilize employment and more efficiently allocate labour resources.
In some respects, Clark's analysis may be likened to Keynes' discussion of
the effects of unemployment and wage cuts on aggregate demand and of the
need for government intervention to stabilize demand. The difference is that
Clark's approach presents a tangible mechanism for linking the
macro-economic policies of the state to micro-economic decision-making at
the level of the firm. That mechanism, in brief, is full-cost social
accounting based on the analysis of labor as an overhead cost. Donald
Stabile explains how such social cost accounting for labor provides an
indispensible (and ignored) model for environmental cost accounting.
The catch in all this is that it would require the use of taxes to correct
rather than amplify market failures. But we are living in an era that can
best be termed Brezhnev capitalism. Those who make the big decisions are in
the position to make those decisions precisely because they have discovered
how to maximize the advantage for themselves of the system's distortions.
Regards,
Tom Walker
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Know Ware Communications
Vancouver, B.C., CANADA
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