As Bradley and Mosca pointed out in "Enrico Barone's ‘Ministry of Production’: Content and
Context," Becker's famous time allocation model of the household was essentially a retread of Barone's "simple book-keeping artifice," which I have criticized relentlessly elsewhere. Bradly and Mosca: "[citing Barone]'It is convenient to suppose -- it is a simple book-keeping artifice, so to speak -- that each individual sells the services of all his capital and re-purchases afterwards the part he consumes directly. For example, A, for eight hours of work of a particular kind which he supplies, receives a certain remuneration at an hourly rate. It is a matter of indifference whether we enter A's receipts as the proceeds of eight hours' labour, or as the proceeds of twenty-four hours' labour less expenditure of sixteen hours consumed by leisure. The latter method helps to make easier the comprehension of certain maxims of which we shall speak later.' "This is the essential point in Gary Becker’s 1965 time allocation model of the household, in which the household allocates its time to produce intermediate goods and final goods (including leisure) that define the household’s welfare (Becker 1965). "The individuals in Barone’s model make their constrained optimal choices of resources supplied (qs, qt, ...) to earn income and of the allocation (‘distribution’) of their income among consumer goods (ra, rb, ...), consumption of productive services (rs, rt, ...) and saving (e) which satisfies the budget equation… [a bunch of superfluous mathematical jib-jab omitted] "…so in Barone’s model real national income is a measure of aggregate welfare, and changes in national income measure changes in welfare. "Barone thus aggregates welfare without aggregation of individual utilities. This enables him to identify the effects of economic changes on aggregate welfare in a much wider range of cases than is possible with the standard Pareto optimality criterion." What Barone does, then, is essentially an anticipation and inversion of the Kaldor-Hicks compensation principle. Increasing national income may indeed make some people worse off but, hey, any alternative would be worse because then the non-losers wouldn't be able to compensate the non-winners. To translate into the vernacular, "Heads I win and tails you lose." It probably goes without saying that Barone was an elitist and "skeptical" of popular democracy because he feared it would lead to socialism (and thus diminish the "aggregate welfare" that results from the disproportionate enrichment of the already wealthy). Barone's "simple book-keeping artifice" only holds if output varies directly with hours worked (which it doesn't). Otherwise, it is an absurd exercise in measurement with a silly putty yardstick... adding apples and bananas... It is, if I may cite Lionel Robbins, a "naive assumption that the connection between hours and output is one of direct variation, that it is necessarily true that a lengthening of the working day increases output and a curtailment diminishes it." One year after Barone published his "Il Ministro della Produzione nello Stato Collettivista," S. J. Chapman published his theory of the "Hours of Labour," which demonstrated to the satisfaction of Robbins, Hicks, Pigou and Marshall that output doesn't vary directly with hours. Thus the "calculus" proposed by Barone (and replicated by Becker) is reduced to mathematical gibberish. On Mon, May 5, 2014 at 11:59 AM, michael yates <[email protected]> wrote: > In response to the NYT obituary for Becker, which notes the > > economist's contention that people in wealthy nations face > > greater time that income constraints, Gene Coyle says, > > > "Now I feel sorry for the 1%, they don't have enough time > > to consume their income. That makes them worse off than > > the unemployed, who have all the time they need to consume > > their income." > > > Gene, this is a wonderful comment. It shows the capitalist > > apologetics that underlies Becker's theories. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Cheers, Tom Walker (Sandwichman)
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