Six days shall work be done, but on the seventh day there shall be to you an holy day, a sabbath of rest to the LORD… (Exodus 35, 2)
There are, sometimes, even among IMF/EU/BCE recommendations that make sense. Last year, these entities and the creditors asked Greece to lengthen the work week to 6 days. In the context of economic development, this is the basic and easiest way to foster an increase in national product/income. Furthermore, this very approach was “the main secret by which the Western economies achieved their spectacular development—as correctly assessed by Marx” .
The economic downturn has brought to the fore this insight. However, spectacular growth of developing countries like China is also explained, at least in part, by this approach. As also observed by blogideologic , it is becoming apparent that a model of capitalism is feasible in which the role of the state is not “ring fenced”, annihilated or jettisoned– Žižek observed that too, from the position of “capitalism with Asian values”, a notion which, surprisingly and interestingly, decouples the economic system of capitalism from the political system of naïve liberal democracy. Xiaoshuo Hou, author of the recent Capitalism in China: the State, the Market and Collectivism, while of some neo-classical nuance, adds color to that Žižekian observation “[in the village of Huaxi] there’s coercion. It’s not a democratic system…[and] [v]illagers are not consulted in a lot of decisions. But they do share economic benefits.”
Now comes possible confirmation that an lengthening the work week is the appanage of economies that are already very well developed and fairly ensoconced in the group of developed economies. In an obituary of sorts, the WSJ describes the way in which Wu Renbao took “a vague concept—‘capitalism with Chinese characteristics’ as a blueprint to turn a farm community [of pig farmers] into what is now…China’s richest village [, Huaxi].”
In his village, “the conflict of interest between the town and the country-side” was managed through increased labor hours. Thus things come full circle (something Marx would have appreciated) whether as tragedy, farce, or carrying forward the exploration contained in Marx’s point that “the whole economic history of society is summed up in the movement of this antithesis [between the city and the country-side]”, that helped the village of Huaxi’s extraordinary development in a country with a Marxist regime. Or, it could be that “groping (in Walras’ sense of tatonnement)” with the issue of development for 66 years is now reaching an actionable level of economic understanding. Perhaps this may be valid way for a Chinese leadership “desperate to make Marxism relevant to China’s contemporary circumstances” and to spend 1 billion yuan rather than the drafting of empty slogans.
In this vein, the “legal rule of a forty-hour week constitutes an anachronism.” In a developing economy, “to increase capital is a formidable operation.” That changing the initial conditions of a dynamic system (in the simple sense of its depending on time) to make it grow faster by increasing the constant of integration representing the capital base is a formidable operation even mathematically—one does have to change the constant of integration. Even if we use, for a moment, the idea that economic production in capitalism can be represented by a “dynamic” system (in the sense above), y’ = ay in the simplest terms, which to a solution of the form y = Ceat, we will then require that C take a different value for the new, desired and higher trajectory in the family in order to effect an economic jump. We have heard of tiger economies—but kangaroo economics?…
Wu went to great and unusual lengths (pun intended): he would not “sacrifice economic growth by permitting local workers vacation time;” rather, he built “knock-offs of the White House, Paris’s Arc de Triomphe and the Great Wall” to Huaxi for the villagers to “visit.” Yes, even their own Great Wall—perhaps an indication of the sense of urgency Wu instilled into the process.
This points to one of the reasons the state is necessary for economic development, despite libertarian noises to the contrary. Even developed economies in the EU are taking note, with France, only 5 months ago, suggesting “a return to the pre-2000 39 hour work week” from the current 35 hours. Predictably, the Prime Minister’s idea was met with trade union “displeasure”; however, the “chatter” adds tatonnement “weight” to the issue, s’il vous plaît…
Now, what would the labor produce in all this extra hour? Why would this be beneficial—shouldn’t there be demand for the extra “widgets” that the extra hours will produce? There are beneficial effects related to factory processes in Georgescu-Roegen’s sense, the factory being one of “the greatest economic inventions of mankind,” because it allows for elementary economic processes to be pipelined (or arranged in line). Longer labor hours allow the factory to run at higher production rates in situations in which demand had justified the building of a factory to begin with—that is obvious. Otherwise the production should, by economic rationale, have elementary processes arranged in series, as it is was in pre-capitalistic times and is today in the building of “canals, bridges, maritime ships,… [even] new plants [themselves]” and so forth. The idleness of the factors of production, the nemesis of economic development, is thus reduced.
Second, there are benefits to the “enjoyment of life” of human beings, the actual result of all economic activity, because ”in the ultimate analysis, the effect of lengthening the working day is to telescope time, as it were, so that the future is brought nearer in terms of the average human lifespan. The point is a corollary of the elementary principle that the reduction of idleness of agents is the main recipe for growth.”[17, emphasis in original] Furthermore, a longer workday with the surplus redirected to other areas of the economy may be a developer’s dream solution to some types of economic constrains, e.g., in agriculture. An example already exists with the economic effects of the TVA.
Similar to Greece, the work week in Romania is set at 40 hours/week, but it does allow flexibility around that stipulation. While the insistence of the IMF, EU, ECB to “liberalize” the labor markets in the countries in which their “insights” are visited upon usually means making it easier for businesses to lay off people, a recent example being Italy with one of the three main goals of the new labor law being “liberalizing individual lay-offs for economic reasons, partly compensated“, particularly the large business with employee (i.e., voter) counts of strategic political importance, allowing flexibility in setting the length of the work week is a valid approach to development. This approach, however, leaves it to the parties, employees/unions and employers to sort out the outcome which may not necessarily result in the desired change in economic trajectory. The state could be more forceful and set a higher limit to achieve certain national economic goals and it is one of the few, indeed, perhaps the only internal means that can drive that project—always observing Exodus 35, 2, of course, as the worker needs to recover (Marx was the first to note the economic dimension of this aspect) physically and even spiritually. Moreover, as the budgets are built every year and targets set for development in the Schumpeterian sense and for growth, this operational lever must not be underutilized.
- ***, “Veste trista pentru greci! Creditorii vor introducerea saptamanii de lucru de 6 zile”, Wall-Street.ro, http://www.wall-street.ro/articol/International/136790/veste-trista-pentru-greci-creditorii-vor-introducerea-saptamanii-de-lucru-de-6-zile.html, 5 September 2012
- Nicholas Georgescu-Roegen, “Process in Farming Versus Process in Manufacturing”, in Energy and Economic Myths, Pergamon Press, p. 101
- Slavoj Žižek, First as Tragedy then as Farce, Verso, 2009, p. 131 ff.
- James T. Areddy, “Eight Questions: Hou Xiaoshuo on Community Capitalism”, The Wall Street Journal, 21 March 2013, http://blogs.wsj.com/chinarealtime/2013/03/21/eight-questions-hou-xiaoshou-on-community-capitalism/
- James T. Areddy, “He Turned Village Into China’s Richest”, The Wall Street Journal, 20 March 2013, p. A10, http://online.wsj.com/article/SB10001424127887323415304578370014164813102.html
- NGR, op. cit., p. 102; also NGR, “Economic Theory and Agrarian Economics”, Oxford Economic Papers, New Series, Vol. 12, No. 1 (Feb., 1960), p. 9
- Nicholas Georgescu-Roegen, “Closing Remarks: About Economic Growth—a Variation on a Theme by David Hilbert”, Economic Development and Cultural Change, University of Chicago, 1988, p. S301
- Charles Burton, “China’s Communists find Marxism”, The Globe and Mail, 6 March 2013
- Nicholas Georgescu-Roegen, “Process in Farming…”, p. 102
- Nicholas Georgescu-Roegen, “Closing Remarks…”, p. S301
- Nicholas Georgescu-Roegen, “Closing Remarks…”, p. S297
- UPI, “France PM walks back work week change”, UPI.com, 31 October 2012
- Nicholas Georgescu-Roegen, The Entropy Law and the Economic Process, Harvard, 1971, 1979, p. 237
- Nicholas Georgescu-Roegen, The Entropy Law…, p. 248
- Nicholas Georgescu-Roegen, The Entropy Law…, p. 289
- Nicholas Georgescu-Roegen, “Dynamic Models and Economic Growth”, World Development, 1975, Vol. 3, Nos. 11 & 12, Pergamon Press, p. 776
- Nicholas Georgescu-Roegen, “Closing remarks…”, p. S303-4
- Codul Muncii Adnotat, III.1.112-113, http://www.codulmuncii.ro/titlul_3_1.html.
- Codul Muncii Adnotat, III.1.114
- Baker & McKenzie, “The Reform of Italian Employment Law (92/2012): a practical overview”, 11 July 2012, http://www.lexology.com/library/detail.aspx?g=9ab9c7b6-ba7b-4b3e-8a75-cae72bdad0aa: “the [Monti-Fornero] law ambitiously aims at shaking up the job market and is driven by 3 essential objectives: (I) clamping down on certain widespread abuses of what is generally referred to as “flexible” work contracts; (ii) liberalizing individual lay-offs for economic reasons, partly compensated by (iii) introducing a more generalized system of unemployment benefits.”