The Irrelevance of Workers In Economic Theory
Many of you know that I am finishing up a book manuscript regarding the exclusion of work, workers and working conditions from economic theory. This part jumps into the middle of a section. The meat of the post is really in the third and fourth paragraphs, where I do a JSTOR survey of the almost total exclusion from economics. Fans of Martin Feldstein may appreciate his contribution.
In short, the exclusion of work, workers, and working conditions was not simply an accidental oversight. First, it served an important purpose in defending the capitalism from the accusation of exploitation. Second, any analysis based on labor would call out for both impossible quantification and more difficult mathematics. Utility, however, seemed to permit economists to avoid the need for quantification, while seeming to simplify mathematical complexities. Finally, utility seemed to be capable of fitting in with the type of models that economists were using in their quest to emulate physics with its mathematics of maximization.
As Phil Mirowski noted, “Production, as conventionally understood, does not “fit” in neoclassical value theory” (Mirowski 1989, p. 284). In short, ideology, mathematical convenience, and scientific ambitions all combined to sweep work, workers, and working conditions under the rug.
The radical shift from labor to extreme subjectivity in which consumer’s unmeasurable preferences became the center of economic analysis sealed labor’s marginalization in the theoretical world of economic theory. Other fields, such as sociology, industrial relations, or psychology seriously explore questions of work, workers or working conditions, but economics does not.
An August 8, 2008 search of 73 economics journals collected electronically in the JSTOR database revealed how marginal work, workers, and working conditions has become in economic literature. Of the articles published since January 2004, the term “working conditions” appeared in only 12, not counting four more substantial articles in the Review of African Political Economy, a journal rarely cited by mainstream economists. Of the remaining articles, three concerned the problem of retention of teachers. Another had a footnote that observed that people can learn about working conditions from websites. One article noted that faculty members in colleges and universities join unions to improve working conditions. A book review considered whether globalization could improve working conditions. Two articles mentioned legislation that took working conditions into account. One article disputed that child labor abroad experienced hideous working conditions. Another cited a mid-nineteenth century British economist who said that factory working conditions were good.
My favorite entry was from Martin Feldstein, whose contempt for spiteful egalitarian was discussed earlier. This article was one of his many attacks on Social Security that proposed that good working conditions should be treated as taxable income (Feldstein 2005, p. 36). None of the articles offered any evidence of serious engagement with work, workers, or working conditions. In contrast, a search for sociologists’ articles with the term “working conditions” that covered ten fewer journals, returned 107 articles.
At the same time as questions of labor were disappearing, economics began to elevate the status of investors’ financial claims, insisting that owners of this form of property had rights equal to those of owners of real goods, such as land or factories. Even something as ephemeral as “good will” became recognized as property.