The Theory of Idle Resources

CHAPTER V

PREFERRED IDLENESS

(1)   Preferred idleness is found in labor only. The simplest case is preference for leisure

THE CASES which fall under the heading “preferred idleness” are unique because they apply realistically to labor only. There are no important parallels to be distinguished in respect of capital equipment;1 and with natural resources, the only realistic parallel is that of parks and estates, which are better thought of as utilized. The most obvious actual case is leisure, the preferred alternative to earned money-income. Holidays are in part to be regarded as leisure. Non-working hours may usually be rightly thought of as leisure (although a genuine yearning for leisure has seldom been a powerful factor in agitations for collective or enforced reductions of the working day2).

(2)   Things like pride, prestige, boredom or laziness may lead to idleness being preferred to the return from employment

But there are other kinds of idleness which, whilst they might not be understood as leisure in ordinary parlance, partake of its nature and are accurately described as “preferred” idleness. Consider the person who refuses available work because it is infra dig. The acceptance of a much lower salary may so wound the pride of a displaced middleclass employee that he will for long fritter away his own savings or the earnings of his family and friends, and endure relative penury, rather than admit to himself (or the circle that knows him) the loss of income-status to which he has been subjected. A similar case is that in which it is the nature of available work itself, more than the salary which it commands, which makes idleness the preferred alternative. The Poor Whites in South Africa have been most reluctant to take on “Kaffir work,” even when it has been offered by the State at subsidized rates more than double those paid to the despised Natives. Moreover, there are sets of people whose social environment and sources of income are such that they are not impelled to spend much of their time or any of their time in remunerative employment. Work for which they are qualified may seem to be so irksome or boring that they will do almost anything to avoid it. The disutility of such work, as some economists prefer to say, may be high. Especially will this be so if custom or public opinion in any social class condones, or does not condemn “laziness,” “sponging” or “parasitism.” It has long been recognized that with many primitive races brought suddenly into the industrial system, the supply of labor in terms of hours of work offered will be more likely to fall than rise if their rates of earnings are increased. And the same phenomenon is occasionally experienced under the industrial system. As Professor Pigou has put it, “the effort demand of workers for stuff is inelastic”3 in conceivable situations. Larger earnings will mean that more leisure will be purchased.

(3)   The preference for idleness may depend upon attachment to a district where an individual has relatives or friends and a customary mode of living

One of the circumstances in which these considerations are of importance is in respect of the geographical incidence of unemployment. The so-called immobility of labor, the inertia which prevents “labor transference,” is due largely to the individual’s fondness for a district in which he has long resided, perhaps the district of his birth. If he leaves a “distressed area,” say, he must bid good-bye to his friends and sometimes forsake his customary mode of living. Certainly his “lack of initiative” may be deplored on the grounds that it is against his “true interests”; but given the absence of social inducements to migrate (e.g., sufficiently attractive wage-rates in other parts) or the absence of social coercions enforcing migration,4 his unemployment must be regarded as the fulfillment of his preferences.

(4)   Given the social will, preferred idleness implies no wrong use of resources but might be deplorable on moral grounds

In modern societies we usually regard a high demand for leisure in the senses just discussed (when it occurs among those condemned to a relatively low standard of material living) as evidence of demoralization. In extreme cases, those in the poorer classes who express such preferences are classed as “won’t-works,” described as “work-shy” and so forth; and they are thought of as a social problem. Now the cause of unemployment in this case is a preference. It implies no wrong use of resources, given the social will. If it is a condition which we happen to deplore on moral grounds, then the method of reform lies either in changing the preferences directly (through preaching or teaching) or in changing the environment which apparently gives rise to the despised preferences.

(5)   Preferred idleness among the “work-shy” tends to vary according to the income available without work

The preference of the “work-shy” for idleness is almost certainly subject to the law that the smaller the individual’s savings, or the smaller the available assistance of his relatives, his friends, an insurance fund, or the State, the less likely will he be to demand it. The importance of this empirical law (which might well be reversed under different traditions from those which exist today) is rather indefinite: the fact of its existence is indisputable.5 There have always been men who have frankly said: “I don’t feel any obligation to work as long as I can live by other means.”6 And there have been authorities who have regarded such an attitude as being so common among large groups of people as to constitute a major cause of idleness in labor.7 Thus, the Departmental Committee on Vagrancy reported in 1906 that “were it not for the indiscriminate dole-giving which prevails—idle vagrancy, ceasing to be a profitable profession, would come to an end.”8 What will not be denied is that, as things are today, the availability of an income without work acts as a stimulus to “preferred idleness.” And if we believe that this is to be deplored, we can devise appropriate reforms. Education, the creation of an ambition-awakening tradition, the stimulation of public contempt for the individual who draws from the pool without contributing to it, the cutting down of unconditional help9—all these may prove to be remedial policies. But as philosophers we must keep quite separate in our minds the traditional and environmental factors10 which seem to give rise to demoralizing preferences like laziness, and the fact of those preferences.

(6)   Preferred idleness may arise through a preference for jobs giving intermittent leisure

Having dealt with the nature of preferred idleness, we can consider a more complex form, namely, that which is spasmodic, recurrent. This is a factor contributing to the “net advantageousness” of “casual labor” from the worker’s point of view. The intermittent leisure may be an end for which a sacrifice will be made. Nearly a century ago, the connection between the irksomeness of regular laboring work and the existence of vagrancy and casual labor was noticed by Senior who said: “We believe, after all, that nothing is so much disliked as steady, regular labor; and that the opportunities of idleness afforded by an occupation of irregular employment are so much more than an equivalent for its anxiety, as to reduce (such wages)... below the common average.”11 This assertion has obviously much less truth in Great Britain today than it had at earlier times; but in 1911 Messrs. Rowntree and Lasker commented on the same fact. They regarded it not as the manifestation of an inherent preference but as in itself a result of irregularity. They remarked of some youths whose first employment was as casual laborers: “Frequently they play about in the streets for so long that when they actually begin work they resent discipline, and will throw up a job on the slightest provocation. Many of them soon learn to prefer an easy life as casual ‘hands’ with considerable intervals of loafing at street corners, to regular work.”12

(7)   If cases of preferred idleness are held to be “demoralizing,” decasualization might he a remedy

If it is true that “preferred” idleness of this kind is the product of a demoralization which that idleness itself creates; if the psychological effect of an irregular income is to create a degrading dislike for continuous work;13 if, in other words, the taste for casual labor is a bad taste, and also self-perpetuating, a case for decasualization can be made out. But so far as youths are concerned, a more effective remedy seems to be compulsory education during the intervals of idleness. And compulsory decasualization for adults has many dangers. Indeed, the justification for such a restraint of preferences must rest upon grounds which, as far as the author’s knowledge goes, have never been appealed to on this topic in the whole literature relevant to the question, namely, the grounds justifying the educative restraint of adults.14 And the arguments for such restraint must be viewed in the light of considerations relative to “pseudo-idleness” and “labor reserves” (which we have already discussed in chap, IV, paras. 3 to 9) and “participating idleness” (which we shall discuss in chap, VIII, paras. 8 to 10). All three conceptions: “pseudo-idleness,” “preferred idleness” and “participating idleness” must complicate realistic study of the casual labor problem. The enforcement of such decasualization might be achieved by the removal of the alternatives which militate against continuous work. Thus, to the extent to which this form of “preferred idleness” is due to the conditions noticed in paragraph 5 (namely, knowledge that relief to prevent actual physical suffering will almost certainly be available when required), the administration of relief with greater stringency will supply the coercion for an increased measure of “desirable” decasualization.

(8)   The “reckless” and “lazy” casual laborer in preferred idleness may simply be relying upon the fact that he will not be allowed to starve

Whether we are justified in regarding the taste which demands “preferred” idleness in these circumstances as a deplorable taste, or as the expression of a wholly regrettable irrationality, is by no means clear. The fact that such poor appear to “live for the moment,” to have no foresight, to be extravagant with their earnings which “come in spurts,” and to be willing to rely upon relief when they have no money, may simply show that, even in their poverty, the physical side of existence means less to them than other things. They want the excitement which can be purchased by the pathetic “extravagances” in which they are led to indulge when they have the means. The social philosopher who accepts the liberal ideal has some reasons for seeing in preferences of this kind a longing for “higher and better things.” In spite of the condemnation of thriftlessness by the conventional moralists, the “fatalism,” the “absence of worry,” the apparent recklessness and the laziness of the poor may be viewed as their very realistic appreciation of the fact that they will not be allowed to starve. If that is so, who can blame them? Are the individual mental adjustments which lead to such traditions so very foolish? After all, are not the poorest classes condemned, under our present social arrangements, to permanently low incomes?

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15  The consumption of leisure on the part of the workers, and the necessity of rest a36),19is business in case of extra demand.” But as this phenomenon is supposed to be specially prominent in the “sweated industries” where “employers” are notoriously uncombined, the allegation is obviously misconceived. “The army of men and women standing at (the employers’) beck and call,” says the same writer, “cost him nothing except for the actual hours that they are at work” (p. 7). This sort of confusion has probably been responsible for an immense amount of avoidable poverty.

16  See W. H. Hutt, Economists and the Public (London: Jonathan Cape, 1936), pp. 176–77, 279-80.

17  A. C. Pigou, Theory of Unemployment (London: Macmillan, 1933), p. 6.

18  Social coercions enforcing migration will be effective if there is no unemployment insurance or other local source of income.

19  There are cases which are difficult to interpret. Thus, if a wife leaves the wage-paid labor market when her husband succeeds in earning more, it may be to devote more time to the adequate performance of household services. If so, it would be most realistic to regard her condition not as “preferred idleness” of the leisure variety but as employed, she having exercised a new preference not involving idleness in any sense. More domestic services are purchased at the cost of the wife’s money-income foregone. If she seeks household work because she enjoys it, we may or may not find it convenient to think of her work as a leisure occupation like, for example, the hard day’s work which an amateur gardener puts in. But if we do call it “idleness” or “unemployment” we must recognize it as a “preferred” condition. The refusal of wage-paid labor by the “unemployed” worker who possesses an allotment which brings him some income in kind is a similar case. If we think it realistic to describe his state as “idle,” then we must regard it as “preferred idleness.” It is not necessarily a condition to be deplored.

20  See P. Alden and E. Hayward, The Unemployable and the Unemployed (London: Headley Brother, 1907), p. 46.

21  There have been penalties for vagrancy in England at all times, ancient, medieval and modern. This suggests that there must have been a taste for it. It suggests also that physical existence has been fairly easily maintained in respect of food and clothing by those who survived childhood. For in spite of the occurrence of periodic starvation until the industrial revolution was firmly established, the loss of large numbers in that way was always regarded as a catastrophe.

22  Quoted in Alden and Hayward, Unemployable and the Unemployed, p. 26.

23  “Preferred idleness” of the type which might be deplored is probably least where the funds on which the individual lives are provided by himself, his family or his friends. His family and friends will prevent what they would regard as abuse of their support. There has so far been no “unemployment problem” in the popular sense among the urban Natives in South Africa partly, it seems, because, having been political and social pariahs, no system of organized relief has been devised for their unemployed. They are maintained by their friends who know them. But it must be remembered also that the absence of tacit or formal labor organization and the absence of wage-fixation in the fields of employment in which they are permitted to compete, results in “enforced idleness” or “withheld capacity” being absent among them as well.

24  E.g., the ineffectiveness of current moral instruction, or what we may hold to be distributive and other injustices.

25  Political Economy, 4th edition, 1858, p. 208. Adam Smith stressed only the anxiety aspect which, he thought, tended to make average earnings in casual occupations above, not below the average. See chap. IV, para. 5 (footnote 1).

26  S. B. Rowntree and B. Lasker, Unemployment (London: Macmillan, 1911), p. 6.

27  It is very common to argue that “irregularity of income is a much more important source of pauperism than low wages” (H. Feldman, The Regularization of Employment [New York: American Management Association, 1925], p. 24). But the ultimate verdict of sociologists will probably be that the source of demoralization is the lack of hope and the absence of outlets for the achievement of any form of distinction and social respect. The physical side of poverty has been greatly over-stressed because the propagandist has found it easier to win support by emphasizing that side than by arguing the superficially less plausible case against environmental factors which are not in such concrete evidence.

28  See Hutt, Economists and the Public, chap. XVII, on “Educative Restraints of Freedom of Choice.”

• 1  William H. Hutt, The Theory of Idle Resources, p. xiv.
• 2  Ibid., p. XV.
• 3  John Maynard Keynes, The General Theory of Employment, Interest, and Money (Amherst, N.Y.: Prometheus Books, 1997), p. 220.
• 4  Ibid., p. 322.
• 5 Henry Hazlitt, The Inflation Crisis (New Rochelle, N.Y.: Arlington House, 1978), p. 79.
• 6 Keynes, The General Theory, p. 327.
• 7 Hutt, Theory of Idle Resources, p. 92.
• 8 Keynes, The General Theory, p. 25.
• 9 Hutt, Theory of Idle Resources, p. 6.
• 10 Keynes, The General Theory, p. 42.
• 11 Hutt, Theory of Idle Resources, p. 6.
• 12 Ibid., p. 64.
• 13 Ibid., p. XVI.
• 14 Ibid., p. 44.
• 15In the Preface to The Theory of Idle Resources, completed a year after Keynes’s General Theory appeared, and published two years later in 1939, Hutt says forthrightly: “I have been wisely advised not to touch on any of the major controversies which his contribution [Keynes’s General Theory] has aroused.” But, then, with laser-like logic, he proceeds to demolish some of the most important intellectual props for Keynes’s Theory. Moreover, he does so, as he says, “as far as possible, in a non-technical way” so that “the reader who is unacquainted with the economic textbooks may follow my reasoning from point to point and himself decide on it’s validity.”
• 16In the Preface to The Theory of Idle Resources, completed a year after Keynes’s General Theory appeared, and published two years later in 1939, Hutt says forthrightly: “I have been wisely advised not to touch on any of the major controversies which his contribution [Keynes’s General Theory] has aroused.” But, then, with laser-like logic, he proceeds to demolish some of the most important intellectual props for Keynes’s Theory. Moreover, he does so, as he says, “as far as possible, in a non-technical way” so that “the reader who is unacquainted with the economic textbooks may follow my reasoning from point to point and himself decide on it’s validity.”
• 17Keynes’s argument may be simplified as follows. Full employment should be our goal. The market system will not get us there; it requires government help as well as guidance. This means, in practice, that government will continually print money, in order to reduce interest rates, ultimately to zero, and also borrow and spend as needed. Booms are good, even economic bubbles are acceptable. Recession and bust must be avoided at all cost. As Keynes wrote: “The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom.”
• 18Keynes’s argument may be simplified as follows. Full employment should be our goal. The market system will not get us there; it requires government help as well as guidance. This means, in practice, that government will continually print money, in order to reduce interest rates, ultimately to zero, and also borrow and spend as needed. Booms are good, even economic bubbles are acceptable. Recession and bust must be avoided at all cost. As Keynes wrote: “The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom.”
• 19The underlying problem here is that, contra Keynes, we do not want employment for its own sake. It is a means, not an end. What we want is a productive economy, and government stimulus gives us, as Henry Hazlitt has said, “unbalanced production, misdirected production, production of the wrong things..., [all of which lead inexorably] to unemployment and mal-employment.”
• 20This is especially true in investment. Keynes said that any investment is better than no investment. Indeed, in the absence of his indefinable state of full employment, he thought that any spending, whether consumption or investment, was better than no spending. This is why government must keep printing money: the resulting reduction in interest rates should encourage more and more investment and spending.
• 21Hutt was an economist’s economist. Unlike Keynes, he did not aspire to the world of politics or big business. He counted himself among “those ... who are not selling policies in return for power,” and took pleasure in correcting logical errors, large or small, wherever he found them. He is best known for re-establishing Say’s Law after Keynes’s distortion and attempted demolition of it, but much of his best work is on unemployment, and much of that is in The Theory of Idle Resources.
• 22Despite being an economist’s economist, Hutt appreciates how the world actually works. For example, Keynes spoke of “the proceeds which entrepreneurs expect to receive from the employment of N [fill in the number] men.” Entrepreneurs of course do not think this way. They think of products, prices, and costs, of which employees are one, all summed up in the computation of profit. The word profit is one that Keynes avoids wherever possible in his General Theory, though in earlier writings he acknowledged its central role in driving the economy. Hutt rightly looks askance at this.
• 23Hutt further notes that “We cannot add together, say, the number of hours of utilization of a locomotive, of the track, and of the signals. Similarly, we cannot aggregate the employment of the engine driver, the fireman, the guard, and the signalman.” Keynes tries to circumvent the difficulty of aggregating labor in a quantifiable series by regarding “individuals as contributing to the supply of labor in proportion to their remuneration.” Hutt retorts that: “Such a definition of employment must lead to the most absurd results. Thus, if the workers in a trade can organize and drive 10 percent of their number into inferior occupations, reduce by 10 percent the amount of labor supplied, and in so doing increase the aggregate earnings of that trade by, say, 20 percent, then the proportion of all employment enjoyed by them and the proportion of the total labor supplied by them must be regarded as increased!”
• 24Hutt further notes that “We cannot add together, say, the number of hours of utilization of a locomotive, of the track, and of the signals. Similarly, we cannot aggregate the employment of the engine driver, the fireman, the guard, and the signalman.” Keynes tries to circumvent the difficulty of aggregating labor in a quantifiable series by regarding “individuals as contributing to the supply of labor in proportion to their remuneration.” Hutt retorts that: “Such a definition of employment must lead to the most absurd results. Thus, if the workers in a trade can organize and drive 10 percent of their number into inferior occupations, reduce by 10 percent the amount of labor supplied, and in so doing increase the aggregate earnings of that trade by, say, 20 percent, then the proportion of all employment enjoyed by them and the proportion of the total labor supplied by them must be regarded as increased!”
• 25Hutt further notes that “We cannot add together, say, the number of hours of utilization of a locomotive, of the track, and of the signals. Similarly, we cannot aggregate the employment of the engine driver, the fireman, the guard, and the signalman.” Keynes tries to circumvent the difficulty of aggregating labor in a quantifiable series by regarding “individuals as contributing to the supply of labor in proportion to their remuneration.” Hutt retorts that: “Such a definition of employment must lead to the most absurd results. Thus, if the workers in a trade can organize and drive 10 percent of their number into inferior occupations, reduce by 10 percent the amount of labor supplied, and in so doing increase the aggregate earnings of that trade by, say, 20 percent, then the proportion of all employment enjoyed by them and the proportion of the total labor supplied by them must be regarded as increased!”
• 26As the above quote suggests, Hutt was not a fan of labor unions. He was, so far as this writer knows, the very first economist to explain why higher wages earned by unions actually come out of the pockets of other workers, not out of employers’ profits, a point that is now well established but still little understood. This is true, in simple terms, because high wages reduce employment in unionized sectors, thereby increase labor supply in other sectors, which increased supply reduces non-unionized labor rates. In addition, workers are also consumers and may have to pay more for unionized sector goods. As a general rule, Hutt noted, “the poorest must ... suffer most as consumers.”
• 27Hutt explains: “The clue to the understanding of the chief economic and sociological problems of today can be found, in my opinion, in a recognition of the struggle which is in progress against the disrupting equalitarian effects of competitive capitalism. Competition and capitalism are hated today because of their tendency to destroy poverty and privilege more rapidly than custom and the expectations established by protections can allow. We accordingly find private interests combining to curb this process and calling upon the State to step in to do the same; and unless the resistance is expressed through monetary policy, the curbing takes the form of restrictions on production. Hence there arises a clash between what I have called the ‘productive scheme’ and the ‘distributive scheme’; and wasteful idleness, both in labor and in physical things, appears to be due to the consequent restraint of productive power—a restraint imposed immediately [by government] in defense of private interests, but [sugar coated with legal minimum wages and unemployment insurance that ultimately just lead to lower wages and more unemployment].”
• 28Are some of the poor willing to accept government welfare rather than try to improve their prospects? If so, says Hutt, we should not necessarily regard them as either lazy or irrational. They may just realize that the crony capitalist system which presently prevails is completely stacked against them.