We might have no problem today accepting as pretty universal that when the going gets tough even the not-so-tough usually have to get going. The newspapers are filled with stories about how our largest corporations have to tighten their belt and knuckle down when faced with cost-price squeezes. But the idea that that same corporation might loosen their belt and slack off with the return of prosperity strikes us as perverse. Indeed, we tend to think that the return of prosperity should lead so-called “modern” individuals and corporations to increased rather than decreased exertion as their efforts meet with greater rewards. Trying to synthesize these two images we are forced into the logically troubling conclusion that people respond to good times and bad times in the same way, with ever greater effort every time rewards fall or rise, pushed during busts and pulled during booms, so in effect we are expanding all the time.
I believe this shows that we are all victims of what I call “the myth of maximizing,” a resounding belief that modern man is an industrious maximizer, whether by his internal nature, the nature of the world, or both. Regardless of how much Marxians and Smithians might hem and haw about equating capitalism with profit maximization, Marx’s original conception with all its Aristotelian and Darwinian baggage imbues our way of looking at the world, past and present.
But, in fact, we are anything but maximizers and, up until relatively recently in the history of man, no one thought we were and surely never believed we should be. While perpetual Darwinian struggle might make a good metaphor, humans are simply not the stuff out of which such struggles are initiated or maintained.
A Universal Backward-Sloping Supply of Labor?
If we interpret the failure of Englishmen in both England and America to fit our expectations of modern economic behavior to mean that the transition to capitalism or the modern era occurred sometime after the seventeenth or eighteenth century, then we could not be more wrong. Many scholars have made us aware of the similarity between comments about the laboring poor in seventeenth- and eighteenth-century England and observations about European and non-European peasants and the working class in the nineteenth and twentieth centuries.[ref]Lujo Brentano, Hours and Wages in Relation to Production, trans. Mrs. William Arnold (London, 1894) 18, 39-40, 108; G. von Schulze-Gaevernitz, The Cotton Trade in England and on the Continent, trans. Oscar S. Hall (London, 1895) 47; Max Weber, The Protestant Ethic and the Spirit of Capitalism, trans. Talcott Parsons (New York: Scribner’s, 1958) 58-63; Edgar S. Furniss, The Position of the Laborer in a System of Nationalism: A Study in the Labor Theories of the Later English Mercantilists (1920; New York: Kelley & Millman, 1957) 233-5; R. H. Tawney, Religion and the Rise of Capitalism: A Historical Study (New York: Harcourt, 1926) 269; Max Weber, General Economic History, trans. Frank H. Knight (London: Allen, 1927) 354-5; Paul H. Douglas, The Theory of Wages (1934; New York: Kelley, 1964) 229, 270-1; Edmund Whittaker, A History of Economic Ideas (New York: Longmans, 1940) 58-60, 578-80; Wilbert E. Moore, Industrialization and Labor: Social Aspects of Economic Development (Ithaca: Cornell University Press, 1951) 35-40, 156-7; Simon Rottenberg, “Income and Leisure in an Underdeveloped Economy,” Journal of Political Economy 60 (1952): 95‑101; Joseph J. Spengler, “Mercantilist and Physiocratic Growth Theory,” Theories of Economic Growth, eds. Bert F. Hoselitz et al. (Glencoe, IL: Free, 1960) 19-22; Elliott J. Berg, “Backward-Sloping Labor Supply Functions in Dual Economies–The Africa Case,” Quarterly Journal of Economics 75 (1961): 468-9; Nicholas Georgescu-Roegen, Analytical Economics: Issues and Problems (Cambridge: Harvard University Press, 1966) 376-7, 383; E. P. Thompson, “Time, Work-Discipline, and Industrial Capitalism,” Past & Present 38 (1967): 91-3; Gunnar Myrdal, Asian Drama: An Inquiry Into the Poverty of Nations, 3 vols. (New York: Pantheon, 1968) 2: 964-84; Terence Hutchison, Before Adam Smith: The Emergence of Political Economy. 1662-1776 (Oxford: Blackwell, 1988) 119-21.[/ref]
Yet, far less known is the fact that a number of distinguished economists‑-based on introspection, casual observation, or early statistical studies‑-have recognized the universality of the backward-sloping supply curve of labor, including William Stanley Jevons, Sydney Chapman, Arthur Pigou, Don Lescohier, Frank Knight, Gustav Cassel, Joan Robinson, George Stigler, Kenneth Boulding, and Peter Wiles.[ref]W. Stanley Jevons, The Theory of Political Economy, 2nd ed. (London, 1879) 194-8; S. J. Chapman, “Hours of Labour,” Economic Journal 19 (1909): 357; A. C. Pigou, The Economics of Welfare (London: Macmillan, 1920) 57n; Don D. Lescohier, The Labor Market (New York: Macmillan, 1919) 94-5; Frank H. Knight, Risk, Uncertainty and Profit (1921; New York: Harper, 1965) 117; Gustav Cassel, The Theory of Social Economy, trans. Joseph McCabe (New York: Harcourt, 1924) 336; Joan Robinson, Essays in the Theory of Employment, 2nd ed. (Oxford: Blackwell, 1947) 120-1; George J. Stigler, The Theory of Price, 2nd ed. (New York: Macmillan, 1949) 189; Kenneth E. Boulding, Economic Analysis, 3rd ed. (New York: Harper, 1955) 210-1, 223-5; P. J. D. Wiles, Price, Cost and Output (Oxford: Blackwell, 1961) 158-80. See also Douglas, Theory of Wages 295-6; E. W. Eckard, Economics of W. S. Jevons (Washington: American Council on Public Affairs, 1940) 27-8; Richard A. Lester, Economics of Labor (New York: Macmillan, 1941) 104-5; Lloyd Ullman, “Union Wage Policy and the Supply of Labor,” Quarterly Journal of Economics 65 (1951): 237-51; Harold G. Vatter, “On the Folklore of the Backward-Sloping Supply Curve,” Industrial and Labor Relations Review 14 (1961): 578; M. Blaug, Economic Theory in Retrospect (Homewood, IL: Irwin, 1962) 289-92; Robert Sourdain, “La Courbe d’Offre Individuelle de Travail,” Revue Économique 17 (1966): 607-14; Percy S. Cohen, “Economic Analysis and Economic Man: Some Comment on a Controversy,” Themes in Economic Anthropology, ed. Raymond Firth (London: Tavistock, 1967) 115; Robert R. Kerton, “Hours at Work: Jevons’ Labor Theory After 100 Years,” Industrial Relations 10 (1971): 227-30; David Macarov, Worker Productivity: Myths and Reality (Beverly Hills: Sage, 1982) 55-7.[/ref]
More importantly, following the seminal statistical work of Paul Douglas in 1934, every major study of labor supply, Western or non-Western, has revealed a negative elasticity. Indeed, empirical analyses around the world consistently reveal an elasticity of male short-run labor supply in the range of ‑0.1 to -0.3.[ref]This suggests an increase of one per cent in real wages decreases the quantity of labor supplied by one-tenth to one-third per cent, and a decrease of one per cent in real wages increases the quantity of labor supplied by one-tenth to one-third per cent. Cf. Douglas, Theory of Wages 313. On the elasticity of labor supply in the United States and Western Europe, see George F. Break, “Income Taxes, Wage Rates, and the Incentive to Supply Labor Services,” National Tax Journal 6 (1953): 333-52; Clarence D. Long, The Labor Force under Changing Income and Employment (Princeton: Princeton University Press, 1958); Frank Gilbert and Ralph W. Pfouts, “A Theory of the Responsiveness of Hours of Work to Changes in Wage Rates,” Review of Economics and Statistics 40 (1958): 116‑21; Harold L. Wilensky, “The Uneven Distribution of Leisure: The Impact of Economic Growth on ‘Free Time,'” Social Problems 9 (1961): 32-3; T. Aldrich Finegan, “The Backward-Sloping Supply Curve,” Industrial and Labor Relations Review 15 (1962): 230-4; M. S. Feldstein, “Estimating the Supply Curve of Working Hours,” Oxford Economics Papers 20 (1968): 74‑80; William G. Bowen and T. Aldrich Finegan, The Economics of Labor Force Participation (Princeton: Princeton University Press, 1969); Sherwin Rosen, “On the Interindustry Wage and Hours Structure,” Journal of Political Economy 77 (1969): 249-73; Albert Rees, “An Overview of the Labor-Supply Results,” Journal of Human Resources 9 (1974): 158-80; Edward Kalachek, Wesley Mellow, and Frederic Raines, “The Male Labor Supply Function Reconsidered,” Industrial and Labor Relations Review 31 (1978): 356-67; Fred Best and James D. Wright, “Effects of Work Scheduling on Time-Income Tradeoffs,” Social Forces 57 (1978): 136-53. For the most complete overview of the Western literature, see John Pencavel, “Labor Supply of Men: A Survey,” Handbook of Labor Economics, Vol. I, eds. Orley Ashenfelter and Richard Layard (Amsterdam: North, 1986) 3-102. See also frequent observations in the early literature on scientific management and industrial relations, e.g., John R. Commons, Labor and Administration (1913; New York: Kelley, 1964) 138. On measures of the elasticity of labor supply outside the industrial West, see Charles P. Kindleberger, Economic Development, 2nd ed. (New York: McGraw, 1965) 6; Gordon C. Winston, “An International Comparison of Income and Hours of Work,” Review of Economics and Statistics 48 (1966): 28-39; Howard N. Barnum and Lyn Squire, A Model of an Agricultural Household: Theory and Evidence (Baltimore: Johns Hopkins University Press, 1979) 9-12, 15-6, 81-2; Julian L. Simon, The Economics of Population Growth (Princeton: Princeton University Press, 1977) 58-61, 134; Mark R. Rosenzweig, “Neoclassical Theory and the Optimizing Peasant: An Econometric Analysis of Market Family Labor Supply in a Developing Country,” Quarterly Journal of Economics 94 (1980): 49-54; Inderjit Singh, Lyn Squire, and John Strauss, eds., Agricultural Household Models: Extensions, Applications, and Policy (Baltimore: Johns Hopkins University Press, 1986) 25-7. For contradictory evidence on female labor supply in Western countries, see Paul W. Miller, “Female Labour Supply in Australia: Another Example of a Backward‑Bending Labour Supply Curve,” Economics Letters 19 (1985): 287‑90; Mark R. Killingsworth and James J. Hechman, “Female Labor Supply: A Survey,” Handbook of Labor Economics, Vol. I, eds. Orley Ashenfelter and Richard Layard (Amsterdam: North, 1986) 103-204.[/ref] Most dramatically this backward-sloping labor supply elasticity showed itself in the steady drop in annual hours of labor worked in the industrial West from the mid-nineteenth century to the late twentieth century while real wages were steadily rising. These reduced hours took the form of fewer hours of labor per day, fewer days per week, more holidays and longer vacations, more years of schooling, an older age of entry into the labor force, and a younger age at retirement.[ref]Since the mid-1970s, some scholars believe that falling or stagnant real earned incomes have brought to an end the long-term trend of declining annual hours of labor. However, others believe that rising real earned incomes have continued to drive down annual hours of labor. See, e.g. Theresa Diss Greis, The Decline of Annual Hours Worked in the United States since 1947 (Philadelphia: Industrial Research Unit, The Wharton School, University of Pennsylvania, 1984); Juliet B. Schor, The Overworked American: The Unexpected Decline of Leisure (New York: BasicBooks, 1991); Jan De Vries, “The Industrial Revlution and the Industrious Revolution,” Journal of Economic History 54 (1994): 262-5; Marcus Rubin and Ray Richardson, The Microeconomics of the Shorter Working Week (Aldershort, England: Avebury, 1997); John P. Robinson and Geoffrey Godbey, Time for Life: The Surprising Ways Americans Use Their Time (University Park: Pennsylvania State University Press, 1997).[/ref]
Similar evidence of a negative elasticity in the supply of effort has emerged in the last twenty years from experimental and field studies of modern American farmers and Third World peasants alike, the insurance industry, and business corporations.[ref]On farming, see Gavin Wright and Howard Kunreuther, “Cotton, Corn and Risk in the Nineteenth Century,” Journal of Economic History 35 (1975): 526-51; Richard H. Day and Inderjit Singh, Economic Development as an Adaptive Process: The Green Revolution in the Indian Punjab (Cambridge: Cambridge University Press, 1977) 19-39; James A. Roumasset et al., eds., Risk, Uncertainty, and Agricultural Development (New York: Agricultural Development Council, 1979); Paul J. H. Schoemaker, Experiments on Decisions under Risk: The Expected Utility Hypothesis (Boston: Kluwer, 1980); Lola L. Lopes, “Between Hope and Fear: The Psychology of Risk,” Advances in Experimental Social Psychology 20 (1987): 287‑8; Harriet Friedmann, “World Market, State, and Family Farm: Social Bases of Household Production in the Era of Wage Labor,” Comparative Studies in Society and History 20 (1978): 565-6; Alice Saltzman, “Chayanov’s Theory of Peasant Economy Applied Cross-Culturally: Family Life Cycle Influences on Economic Differentiation and Economic Strategy,” diss., University of California, Irvine, 1985, 125-220; Alan Collins, Wesley N. Musser, and Robert Mason, “Prospect Theory and Risk Preference of Oregon Seed Producers,” American Journal of Agricultural Economics 73 (1991): 429‑35. On insurance, see Howard Kunreuther, et al., Disaster Insurance Protection: Public Policy Lessons (New York: Wiley, 1978); Schoemaker, Experiments. On the corporate firm, see Kenneth E. Boulding, The Organizational Revolution: A Study in the Ethics of Economic Organization (New York: Harper, 1953) 137-8; James G. March and Herbert A. Simon, Organizations (New York: Wiley, 1958) 172-86; Michel Crozier, The Bureaucratic Phenomenon (Chicago: University of Chicago Press, 1964) 195-8; Harvey Leibenstein, “Organizational or Frictional Equilibria, X-Efficiency, and the Rate of Innovation,” Quarterly Journal of Economics 83 (1969): 621; Robert D. Cuff, “American Historians and the ‘Organizational Factor,” Canadian Review of American Studies 4 (1973): 26-7; E. H. Bowman, “Risk Seeking by Troubled Firms,” Sloan Manangement Review 23 (1982): 33‑42; Jitendra V. Singh, “Performance, Slack, and Risk Taking in Organizational Decision Making,” Academy of Management Journal 29 (1986): 562-85; Stanley Kaish, “Behavioral Economics in the Theory of the Business Cycle,” Handbook of Behavioral Economics, Vol. B: Behavioral Macroeconomics, eds. Benjamin Gilad and Stanley Kaish (Greenwich, Conn.: JAI Press, 1986) 40; Avi Fiegenbaum and Howard Thomas, “Attitudes toward Risk and the Risk-Return Paradox: Prospect Theory Explanations,” Academy of Management Journal 31 (1988): 85-106; Neil Fligstein, The Transformation of Corporate Control (Cambridge: Harvard University Press, 1990) 3-23, 300. On innovative and entrepreneurial behavior in general, see Reuven Brenner, History‑-The Human Gamble (Chicago: University of Chicago Press, 1983) 88; Mary Douglas, Risk Acceptability According to the Social Sciences (New York: Sage, 1985) 73-82.[/ref] These studies reveal necessity to be as reversible with modern firms as we found it to be with seventeenth-century Chesapeake planters, with the modern firm ubiquitously pervaded by “organizational slack” and “X-inefficiency” which only tightens up during recessions, promptly to return again with prosperity.[ref]Wesley Clair Mitchell, Business Cycles and Their Causes (1941; Berkeley: University of California Press, 1960) 16-8, 33-4, 38-9; March and Simon, Organizations 126; Richard M. Cyert and James G. March, A Behavioral Theory of the Firm (Englewood Cliffs, NJ: Prentice, 1963) 10, 36-8; Harvey Leibenstein, Beyond Economic Man: A New Foundation for Microeconomics (Cambridge: Harvard University Press, 1976) 392-415; John Kendrick, Understanding Productivity: An Introduction to the Dynamics of Productivity Change (Baltimore: Johns Hopkins University Press, 1977) 67; Roger Frantz and Fred Galloway, “A Theory of Multidimensional Effort Decisions,” Journal of Behavioral Economics 14 (1985): 78.[/ref]
With such overwhelming empirical evidence in favor of a universal backward-sloping supply curve of labor, one might think that the pre-classical economic idea of necessity as poverty, inherently relative and reversible, would still be alive and kicking. Indeed, scholars from many different disciplines today regularly turn to the popular aphorism “necessity is the mother of invention” as a shorthand way of saying nothing more nor less than what preclassical political economists said more than two hundred years ago.[ref]See, e.g., Brentano, Hours and Wages 51; William Graham Sumner and Albert Galloway Keller, The Science of Society, 4 vols. (New Haven: Yale University Press, 1927) 1: 64; Population Division, Dept. of Social Affairs, United Nations, The Determinants and Consequence of Population Trends (New York: United Nations, 1953) 230; March and Simon, Organizations 184; Robert A. Flammang, “Economic Growth and Economic Development: Counterparts or Competitors?,” Economic Development and Cultural Change 28 (1979): 53; Brenner, History 41; Jon Elster, “Introduction,” Rational Choice, ed. Jon Elster (New York: New York University Press, 1986) 25; Jon Elster, Nuts and Bolts for the Social Sciences (Cambridge: Cambridge University Press, 1989) 17-8; Paul A. Rahe, Republics Ancient and Modern: Classical Republicanism and the American Revolution (Chapel Hill: University of North Carolina Press, 1992) 97. This usage of the maxim differs from the other popular modern usage which emphasizes a more utilitarian definition of necessity. Cf., e.g., the different usages in Joseph Rossman, Industrial Creativity: The Psychology of the Inventor (New Hyde Park, NY: University Books, 1964) 80-1, 87-9, 201-4.[/ref] More generally observers throughout the twentieth century have turned to other terms to describe how people have strived to bring an actual “level of living” in line with a relative or culturally-determined “standard of living.”[ref]On the formal distinction between “level” and “standard” of living, see Don D. Lescohier, The Labor Market (New York: Macmillan, 1919) 95; Hazel Kyrk, A Theory of Consumption (Boston: Houghton, 1923) 174; Sumner and Keller, Science of Society 1: 70-8; Elizabeth Ellis Hoyt, Consumption in Our Society (New York: McGraw, 1938) 265‑8; Harold W. Saunders, “A General Theory of Population Pressure,” Journal of Business, University of Iowa 24 (1944): 11-15; Joseph S. Davis, “Standards and Content of Living,” American Economic Review 35 (1945): 1-15; E. P. Hutchinson, The Population Debate: The Development of Conflicting Theories up to 1900 (New York: Houghton, 1967) 149n. For examples of nineteenth- and twentieth-century standard-of-living theories in Europe and America, see William Roscher, Principles of Political Economy, 2 vols., trans. John J. Lalor (Chicago; Callaghan, 1882) 1: 51-4; 2: 43-4, 221-3; Simon N. Patten, The Theory of Dynamic Economics (Philadelphia, 1892) 128-34; Simon N. Patten, The Consumption of Wealth, 2nd ed. (Philadelphia: University of Pennsylvania, 1901) 43-52; Thomas Nixon Carver, The Distribution of Wealth (1904; London: Macmillan, 1932) 165-84; Sidney Webb and Beatrice Webb, Industrial Democracy, 2nd ed. (London: Longmans, 1911) 654-702; A. L. Bowley, The Nature and Purpose of the Measurement of Social Phenomena (London: King, 1915) 149-88; G. P. Watkins, Welfare as an Economic Quantity (Boston: Houghton, 1915) 90-1; Thomas Nixon Carver, Principles of Political Economy (Boston: Ginn, 1919) 393; Alfred Marshall, Principles of Economics, 8th ed. (New Haven: Yale University Press, 1920) 688; Kyrk, Theory of Consumption 172-85, 209-11; Thorstein Veblen, The Theory of the Leisure Class (1899; Boston: Houghton, 1973) 82-3; Sumner and Keller, Science of Society 1: 70-8; Elizabeth Ellis Hoyt, The Consumption of Wealth (New York: Macmillan, 1928) 37-43; Richard T. Ely et al., Outlines of Economics, 5th ed. (New York: Macmillan, 1935) 152-4, 428-9; Warren S. Thompson and P. K. Whelpton, “Levels of Living and Population Pressure,” Annals of the American Academy of Political and Social Science 198 (1938): 93‑100; Frank H. Hankins, “Pressure of Population as a Cause of War,” Annals of the American Academy of Political and Social Science 198 (1938): 101‑8; Frank H. Hankins, “Demographic and Biological Contributions to Sociological Principles,” Contemporary Social Theory, eds. Harry Elmer Barnes et al. (New York: Appleton, 1940) 288; E. L. Thorndike, Human Nature and the Social Order (New York: Macmillan, 1940) 491; Rudolf Heberle, “Social Factors in Birth Control,” American Sociological Review 6 (1941): 794-805; Harold W. Saunders, “Human Migration and Social Equilibrium,” Population Theory and Policy: Selected Readings, eds. Joseph J. Spengler and Otis Dudley Duncan (Glencoe: Free, 1956) 219-29; J. A. Banks, Prosperity and Parenthood: A Study of Family Planning among the Victorian Middle Classes (London: Routledge, 1954) 6-7, 218; Ruth Riemer and Clyde V. Kiser, “Social and Psychological Factors Affecting Fertility,” Milbank Memorial Fund Quarterly 32 (1954): 167‑8; Ivan F. Beutler and Alma J. Owen, “A Home Production Activity Model,” Home Economics Research Journal 9 (1980): 16-26. See also Joseph J. Spengler, “Population Doctrines in the United States,” Journal of Political Economy 4 (1933): 433-67, 639-72; Hutchinson, Population Debate 401-2; D. E. C. Eversley, Social Theories of Fertility and the Malthusian Debate (1959; Westport, CT: Greenwood Press, 1975) 224-5.
After World War II, the terminology shifted as level/standard of living gave way to various “relative” hypotheses and theories (for example, relative income, relative economic status, relative deprivation) scattered through the social sciences. All of these theories share much in common. See Richard A. Easterlin, “Relative Economic Status and the American Fertility Swing,” Family Economic Behavior: Problems and Prospects, ed. Eleanor Bernert Sheldon (Philadelphia: Lippincott, 1973) 181; Reuben Hill and David M. Klein, “Understanding Family Consumption: Common Ground for Integrating Uncommon Disciplinary Perspectives,” Family Economic Behavior: Problems and Prospects, ed. Eleanor Bernert Sheldon (Philadelphia: Lippincott, 1973) 12; Richard A. Easterlin, “Does Economic Growth Improve the Human Lot?: Some Empirical Evidence,” Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz, eds. Paul A. David and Levin W. Reder (New York: Academic, 1974) 112-4; Richard A. Easterlin, “The Conflict between Aspirations and Resources,” Population and Development Review 2 (1976): 417; Anisuzzaman Chowdury, “The Decentralized Labor Market and the Nonmarket Consideration of Wage Changes,” Journal of Post Keynesian Economics 5 (1983): 648-63.[/ref] By far and away the most popular of these theories‑-relative deprivation theory‑-has been employed by sociologists, economists, political scientists, anthropologists, and social psychologists alike to describe all manners of behavior.[ref]The literature on relative deprivation is so diverse and wide-sweeping that certainly not all interpretations would fit within the scope of this exploration of necessity. For overviews of relative deprivation theory, see W. G. Runciman, Relative Deprivation and Social Justice (Berkeley: University of California Press, 1966) 9-35; David Donald Dabelko, “Relative Deprivation Theory and its Application to the Study of Politics,” diss., University of Illinois at Urbana-Champaign, 1971; Robin M. Williams, Jr., “Relative Deprivation,” The Idea of Social Structure: Papers in Honor of Robert K. Merton, ed. Lewis A. Coser (New York: Harcourt, 1975) 355-78; Faye Crosby, “A Model of Egoistical Relative Deprivation,” Psychological Review 83 (1976): 85-113; Stuart Albert, “Temporal Comparison Theory,” Psychological Review 84 (1977): 485-503; Alex C. Michalos, “Multiple Discrepancies Theory (MDT),” Social Indicators Research 16 (1985): 347-413.
Relative deprivation theory has obvious parallels to a diverse number of social psychological concepts like reference group theory, adaptation level theory, Gerhard Lenski’s “status inconsistency”, George Homan’s “distributive justice”, Leon Festinger’s “social comparison” and “cognitive dissonance”, John Adams’s “equity”, Kurt Lewin’s “level of aspiration”, John Dollard’s “frustration‑aggression,” Emile Durkheim’s “anomie”, “status anxiety,” Thomas Pettigrew’s “social evaluation,” Thibaut and Kelly’s “comparison level,” and Alex Michalos’s “multiple discrepancy.” See Robert Merton, Social Theory and Social Structure, 2nd ed. (Glencoe: Free Press, 1957) 131-94, 225‑80; Martin Patchen, The Choice of Wage Comparisons (Englewood Cliffs, NJ: Prentice, 1961) 1-14; David F. Aberle, The Peyote Religion among the Navaho (New York: Wenner, 1966) 323; Thomas F. Pettigrew, “Social Evaluation Theory: Convergences and Applications,” Nebraska Symposium on Motivation, 1967, ed. David Levine (Lincoln: University of Nebraska Press, 1967) 241-311; James A. Geschwender, “Explorations in the Theory of Social Movements and Revolutions,” Social Forces 47 (1968): 127‑35; Dabelko, “Relative Deprivation Theory” 20-48; Angus Campbell, Philip E. Converse, and Willard L. Rodgers, The Quality of American Life: Perceptions, Evaluations, and Satisfactions (New York: Sage, 1976) 8; Crosby, “Model of Egoistical Relative Deprivation,” 85-113; Faye J. Crosby, Relative Deprivation and Working Women (New York: Oxford University Press, 1982) 26-32; Alex Michalos, “Satisfaction and Happiness,” Social Indicators Research 8 (1980): 385-422; Barry Markovsky, “Toward a Multilevel Distributive Justice Theory,” American Sociological Review 50 (1985): 822-39; Lise Dubé and Serge Guimond, “Relative Deprivation and Social Protest: The Personal‑Group Issue,” Relative Deprivation and Social Comparison: The Ontario Symposium, Volume 4, eds. James M. Olson, et al. (Hillsdale, NJ: Erlbaum, 1986) 201; James M. Olson and J. Douglas Hazlewood, “Relative Deprivation and Social Comparison: An Integrative Perspective,” Relative Deprivation and Social Comparison: The Ontario Symposium, Volume 4, eds. James M. Olson, et al. (Hillsdale, NJ: Erlbaum, 1986) 1-15; Duane F. Alwin, “Distributive Justice and Satisfaction with Material Well-Being,” American Sociological Review 52 (1987): 83-95; R. Vermunt, E. Spaans, and F. Zorge, “Satisfaction, Happiness and Well-Being of Dutch Students,” Social Indicators Research 21 (1989): 1-33; Alex C. Michalos, Global Report on Student Well-Being, Vol. I (New York: Springer, 1991) 30-65. For political scientists, see Ted Robert Gurr, “A Comparative Study of Civil Strife,” The History of Violence in America: Historical and Comparative Perspectives, eds. Hugh Davis Graham and Ted Robert Gurr (New York: Praeger, 1969) 596-603; Dabelko, “Relative Deprivation Theory.” For anthropologists, see Aberle, Peyote Religion 315-33; Dumond, “Political Centralization” 289. For economists see Oded Stark, “Rural‑to‑Urban Migration in LDCs: A Relative Deprivation Approach,” Economic Development and Cultural Change 32 (1984):475‑98; Oded Stark and Shlomo Yitzhaki, “Relative Deprivation and Migration,” Applied Behavioural Economics, Vol. 1, ed. Shlomo Maital (New York: New York University Press, 1988) 269‑302; O. Stark and S. Yitzhaki, “Labour Migration as a Response to Relative Deprivation,” Journal of Population Economics 1 (1988): 57-70.[/ref]
While these social scientists have been rooting the necessity concept in social psychological theory, behavioral economists and economic psychologists have independently been building a cognitive psychological model of necessity in their critiques of the neo-classical economic assumption of a universal maximizing man. The most important concepts include: Herbert A. Simon’s popular “satisficing”; Harvey Leibenstein’s “X-efficiency,” which rests on the premise that “pressure, from whatever source, will result in a movement toward procedures closer to maximization”; and most recently Daniel Kahneman and Amos Tversky’s highly influential “prospect theory,” founded on the idea that individuals have a “risk aversion” for gains (i.e., will avoid risks in the pursuit of gains) and a “risk preference” for losses (i.e., will take risks to avoid losses).[ref]Herbert Simon, Models of Man (New York: Wiley, 1957) 241-73; March and Simon, Organizations 85-6, 136-86; Cyert and March, Behavioral Theory of the Firm 10, 36-8; Harvey Leibenstein, “The Impact of Population Growth on the American Economy,” Commission on Population Growth and the American Future, Research Reports. Vol. 2: Economic Aspects of Population Change, eds. E. R. Morss and R. H. Reed (Washington: GPO, 1972) 60; Harvey Leibenstein, Beyond Economic Man; A New Foundation for Microeconomics (Cambridge: Harvard University Press, 1976) 29-47; Daniel Kahneman and Amos Tversky, “Prospect Theory: An Analysis of Decision under Risk,” Econometrica 47 (1979): 263-91; Harvey Leibenstein, “Economic Decision Theory and Human Fertility Behavior: A Speculative Essay,” Population and Development Review 7 (1981): 381-400; Daniel Kahneman and Amos Tversky, “The Psychology of Preference,” Scientific American 246 (1982): 160-73; Elster, “Introduction” 25. See also Harry Markowitz, “The Utility of Wealth,” Journal of Political Economy 60 (1952): 151-8; A. D. Roy, “Safety First and the Holding of Assets,” Econometrica 20 (1952): 431-9; Lawrence E. Fouraker, “Level of Aspiration and Group Decision Making,” Decision and Choice: Contributions of Sidney Siegel, eds. Samuel Messick and Arthur H. Brayfield (New York: McGraw, 1964) 201-39; Ralph O. Swalm, “Utility Theory‑-Insights into Risk Taking,” Harvard Business Review 44 (1966): 123‑36; Robert Tempest Masson, “Utility Functions with Jump Discontinuities: Some Evidence and Implications from Peasant Agriculture,” Economic Inquiry 12 (1974): 559-66; Peter C. Fishburn, “Mean-Risk Analysis with Risk Associated with Below-Target Returns,” American Economic Review 67 (1977): 116-26; John W. Payne, Dan J. Laughhunn, and Roy Crum, “Translation of Gambles and Aspiration Level Effects in Risky Choice Behavior,” Management Science 26 (1980): 1039-60; Lola L. Lopes, “Between Hope and Fear: The Psychology of Risk,” Advances in Experimental Social Psychology 20 (1987): 255-95; William Samuelson and Richard Zeckhauser, “Status Quo Bias in Decision Making,” Journal of Risk and Uncertainty 1 (1988): 7-59; Daniel Kahneman, “Reference Points, Anchors, Norms, and Mixed Feelings,” Organization Behavior and Human Decision Processes 51 (1992): 296-312.[/ref] Such theories fundamentally challenge the seemingly impregnable neo-classical economic notion that individuals have some smooth utility function that they seek to maximize. Instead, if the utility function has any relevance, we seem to have a kinked utility function centered around some relatively sticky (but not completely static) standard of living that we aim for.
Although these social and cognitive psychological approaches have up to the present shown little tendency to overlap, the approaches converge in a model of man with a common emphasis on the role of deviation from some target, reference point, or aspiration level on attitudes and responses. This deviation creates in one direction a condition of necessity, deprivation, tension, deficiency, pressure, or stress that promotes increased effort and risk-taking; and in the opposite direction, ease, relaxation, satisfaction, sufficiency, competency, or feeling of well-being that encourages decreased effort and risk-taking.[ref]Markowitz, “Utility of Wealth” 151-8; Sidney Siegel, “Level of Aspiration and Decision Making,” Psychological Review 64 (1957): 253-62; H. Simon, Models of Man 241-60; William H. Starbuck, “Level of Aspiration,” Psychological Review 70 (1963): 51-60; William H. McWhinney, “Aspiration Levels and Utility Theory,” The Psychology of Management Decision, ed. George Fisk (Lund: CWK Gleerup, 1967) 62-77; Kahneman and Tversky, “Prospect Theory” 263-91; Payne, Laughhunn, and Crum, “Translation of Gambles” 1039-40. Leibenstein’s work‑- stretching as it does from firm management to fertility‑- demonstrates the basic compatibility of the two approaches. Scholars explicitly linking the two approaches include March and Simon, Organizations; James E. Annable, Jr., “A Theory of Downward‑Rigid Wages and Cyclical Unemployment,” Economic Inquiry 15 (1977): 326-44; George F. Loewenstein, “Frames of Mind in Intertemporal Choice,” Management Science 34 (1988): 200-14; George F. Loewenstein, Leigh Thompson, and Max H. Bazerman, “Social Utility and Decision Making in Interpersonal Contexts,” Journal of Personality and Social Psychology 57 (1989): 430. In cognitive psychology, comparable homeostatic models of motivation, although having fallen from their dominant position in the 1950s and 1960s, have never been directly refuted and still retain a great power to integrate many of the diverse findings in the literature. See Ross Stagner, “Homeostasis, Discrepancy, Dissonance: A Theory of Motives and Motivation,” Motivation and Emotion 1 (1977): 103-38; Sandor B. Brent, “Motivation, Steady-State, and Structural Development: A General Model of Psychological Homeostasis,” Motivation and Emotion 2 (1978): 299-332; Mortimer H. Appley, “Motivation, Equilibration, and Stress,” Nebraska Symposium on Motivation 38 (1991): 1-67.[/ref] When the aspiration level or target is conceived, as it frequently is, as current or customary wealth or a standard of living, then the two approaches converge even more strongly.[ref]Markowitz, “Utility of Wealth” 157; Stephen J. Mezias, “Aspiration Level Effects: An Empirical Investigation,” Journal of Economic Behavior and Organization 10 (1988): 389-90; George F. Loewenstein, “Frames of Mind in Intertemporal Choice,” Management Science 34 (1988): 200.[/ref]
Some students of economic development have even moved far since the 1960s toward realizing the behavioral synthesis that eluded pre-classical political economists. Linked loosely by regular reference to the seminal work of Kingsley Davis, Ester Boserup, and the rediscovered work of Alexander Chayanov, these social scientists, although from wide-ranging disciplines, share most strongly a common interest in historical approaches to economic-demographic development and political economy or, more broadly, societal evolution. They all locate the central dynamic of their narrative in the myriad economic (extensification, intensification, diversification, specialization, innovation, consumption, savings), demographic (migration, fertility, nuptuality, mortality), and sociopolitical (horizontal and vertical organization, resource allocation) responses that individuals and groups have made to necessity and reversed when conditions improved.[ref]See Appendix VI for a fuller description of this synthesis and supporting citations. Early American historians have not been immune to such a synthesis. Indeed, John J. McCusker and Russell R. Menard, citing the work of Boserup and Julian Simon, outline a population pressure framework (albeit to criticize a more narrow Malthusian-frontier framework)‑-in which migration, agricultural intensification, fertility control, and non‑agricultural diversification comprise “a complex of responses as people tried to maintain acceptable standards of living when a growing population pushed against the local supply of land”‑-but fail to develop the framework any further leaving it as “a major challenge” for those historians who focus on “the local demographic process.” See John J. McCusker and Russell R. Menard, The Economy of British America, 1607-1789 (Chapel Hill: University of North Carolina Press, 1985) 34, 256‑7, 305‑6.[/ref]
Political Common Sense and American Exceptionalism
Yet there is no necessity synthesis and probably there will not be one for a long time. Certainly none of the scholars mentioned above has suggested such a synthesis. This resistance should perhaps not surprise us. After all, the early modern British political economists who were in the best position to develop a theoretically rigorous necessity theory seemed to have little interest in doing so. Indeed, any necessity model faced as much trouble in the seventeenth century as a similar model would today.
John Houghton seems to have recognized back in the 1600s at least part of the problem plaguing any necessity synthesis. Houghton, who undoubtedly did more than anyone to popularize the “necessity” concept in his long-running, late seventeenth century newsletter, extended the model to all classes fairly indiscriminately. In his view, the gentry, farmers, merchants, tradesmen, manufacturers, and laborers all ceased working when “they have enough.” The major difference between the classes depended on the length of their time perspective, varying from the weekly wage of a wage laborer to the lifetime retirement fund of a gentleman.[ref]John Houghton, Husbandry and Trade Improv’d, ed. Richard Bradley, 2nd ed., 4 vols. (London, 1728) 4: 383. See also Schulze‑Gaevernitz, Cotton Trade in England 3‑4; Edwin R. A. Seligman, The Shifting and Incidence of Taxation, 5th ed. (New York: Columbia University Press, 1927) 48-9.[/ref] The effect of distress caused by civil wars, prodigality, and indebtedness promoted a late seventeenth-century agricultural revolution as “necessity” pressured the normally indolent gentry to rack their tenants and put the gentry “upon new projects and industry.”[ref]Houghton, Husbandry 4: 56, 85. See also E. Lipson, The Economic History of England, 3 vols. (London: A. and C. Black, 1915-31) 2: 373. Sir Thomas Smith, A Discourse of the Commonweal of This Realm of England, ed. Mary Dewar (1549; Charlottesville: University Press of Virginia, 1969) 22, 80-1 had over a century earlier attributed the sixteenth-century enclosures by the landed gentry to the pressure of inflation on relatively fixed incomes, a point later seconded in the seventeenth century by Gerard de Malynes. See Malynes, The Canker of Englands Commonwealth (1601; Amsterdam: Theatrum Orbis Terrarum, 1977) 90-1; Henry Robinson, Englands Safety in Trades Encrease (London, 1641) 7-8.[/ref] Furthermore, although most low-wage theorists discussed farmers as simply abandoning agriculture in response to low prices and high rents, Houghton (later echoed by Young) noted that these rack rents caused tenant farmers to accept “projects and industry they never could be induced to” before.[ref]Houghton, Husbandry 4: 56; Furniss, Position of the Laborer 134n; Arthur Young, A Six Month’s Tour through the North of England (London, 1771) 4: 376, cited in Lipson, Economic History of England 2: 376. Henry Robinson earlier noted that rack rents as well as excise taxes induced industry and frugality among husbandmen. See Robinson, Englands Safety in Trades Encrease 7-8, 44-5.[/ref]
Yet Houghton noted when considering the applicability of the “Dutch” model to England: “I will not wish such necessity upon our selves to this like Improvements; but if for our sins, through war, or any other Calamity, we shou’d be reduc’d…we may then say like David, ‘Twill be good for us that we have been afflicted.'”[ref]John Houghton, A Collection for Improvement of Husbandry and Trade, 4 vols. (1693-1703; Farnborough, Hants., England: Gregg International, 1969) 15 Nov 1695.[/ref] Indeed, even if early modern political economists recognized that sticks may be better policy, political commonsense usually dictated carrots. Politics today continues to work against a necessity synthesis. What politician or economist in his or her right mind would support lower standards of living?
But perhaps the biggest stumbling block today for a necessity synthesis is that the underlying consensus built around necessity has itself dissipated since the days of Adam Smith. Despite the developments in social and economic psychology noted above, the notion of reversible necessity still strikes us as perverse, something to be shrugged off as an idea fit for some backward part of the world but certainly not for modern people like us.
How could an idea like necessity that was once so prominent and still explains so much today find so little room in our intellectual baggage? Before we can ever transcend the myth of maximizing, we need to understand more fully the nature of its hold over our imagination. Chapter 1 offered a bit of a preview, but here we can analyze more fully the answer to this question.
If we limit our focus to the problem in early American historiography, it is easy enough to write off at least part of the problem to American exceptionalism.[ref]For the recent literature on American exceptionalism, see Byron E. Shafer, Is American Different?: A New Look at American Exceptionalism (Oxford: Clarendon Press, 1991); Joyce Appleby, “Recovering America’s Historic Diversity: Beyond Exceptionalism,” Journal of American History 79 (1992): 419-31; Michael Kammen, “The Problem of American Exceptionalism: A Reconsideration,” American Quarterly 45 (1993): 1-43; Jack P. Greene, The Intellectual Construction of America: Exceptionalism and Identity from 1492 to 1800 (Chapel Hill: University of North Carolina Press, 1993); David M. Wrobel, The End of American Exceptionalism: Frontier Anxiety from the Old West to the New Deal (Lawrence: University Press of Kansas, 1993).[/ref] If one does not want to go back as far as the colonial promotional literature, one can certainly trace this exceptionalism to the nationalistic rhetoric of the post-revolutionary era. In particular the idea that the American character was shaped by the pull of abundant Western land was an idea echoed by Franklin, Crèvecoeur, Jefferson, Tocqueville, Emerson, Lincoln, Whitman, and hundreds of other early American thinkers.[ref]The classic analysis of the history of this idea is Henry Nash Smith, Virgin Land: The American West as Symbol and Myth (Cambridge: Harvard University Press, 1950). See also George W. Pierson, “The Shaping of a People: The United States of America,” Cultures 3 (1976): 13-29; Albert E. Stone, “Introduction,” Letters from an American Farmer and Sketches of Eighteenth-Century America, by J. Hector St. John de Crèvecoeur (Harmondsworth: Penguin, 1981) 8.[/ref] For Crèvecoeur, in America “the power of transplantation” to a land of freedom and freeholds led to a “great metamorphosis” creating “a new race of men” who acted upon “new principles.” “From involuntary idleness, servile dependence, penury, and useless labour, he has passed to toils of a very different nature, rewarded by ample subsistence. This is an American.”[ref]J. Hector St. John de Crèvecoeur, Letters from an American Farmer and Sketches of Eighteenth-Century America (Harmondsworth: Penguin, 1981) 69-70, 84. See also Vernon Louis Parrington, Main Currents in American Thought: An Interpretation of American Literature from the Beginnings to 1920, 3 vols. (1927; Norman: University of Oklahoma Press, 1987) 1: 140-7.[/ref]
Increasingly after the American Revolution, the Puritan rhetoric with its emphasis on the stimulating effect of adversity gave way to “Jeffersonian” and “Jacksonian” rhetoric highlighting the role of opportunity and abundance in keeping Americans from sinking into a state of indolence.[ref]Cf. Edmund S. Morgan, “The Puritan Ethic and the American Revolution,” William and Mary Quarterly 3rd ser. 24 (1967): ; J. E. Crowley, This Sheba, Self: The Conceptualization of Economic Life in Eighteenth-Century America (Baltimore: Johns Hopkins University Press, 1974); Drew R. McCoy, “Benjamin Franklin’s Vision of a Republican Political Economy for America,” William and Mary Quarterly 3rd ser. 35 (1978): 626-8; Drew R. McCoy, The Elusive Republic: Political Economy in Jeffersonian America (Chapel Hill: University of North Carolina Press, 1980).[/ref] By the mid-nineteenth century, the belief that the American yeoman was “a different creature altogether” from the European peasant had come to dominate American thought.[ref]H. Smith, Virgin Land 135. There is no study as far as I know of the complex history of the use of the terms “peasant” and “peasantry” in American literature.[/ref] The American was by definition industrious, whether pushed by the duty of taming a frontier, the irrepressible competition of fellow Americans, and a Protestant work ethic; or pulled by freedom, opportunity, and abundance. These ideas, as Henry Nash Smith observes, received their “classic statement” in Turner’s frontier thesis with its blending of Hobbesian-cum-Darwinian and Judeo-Christian elements that has colored so much of twentieth-century historiography.[ref]H. Smith, Virgin Land 3. Smith notes that Turner in 1883 composed an “Oration on Peasant Proprietors in U.S,” although I have yet to find an example where Turner used the terms “peasant” or “peasantry” in print when referring to Americans past or present. See H. Smith, Virgin Land 252.[/ref]
But clearly American exceptionalism cannot be the sole explanation for the myth of maximizing since historians are not averse to challenging American exceptionalism. All of the major shifts in American historiography identified by historians‑-from Whig to Progressive to counter-Progressive to neo-Progressive‑-to some degree have challenged some aspect of the American exceptionalism of the preceding generation of historians. Lately many leading historians have sought to place the American experience within the great European debates over “the transition to capitalism” and the rise of liberalism, challenging the Hartzian liberal consensus that America was born modern.[ref]See, e.g., Edwin G. Burrows, “The Transition Question in Early American History: A Checklist of Recent Books, Articles, and Dissertations,” Radical History Review 18 (1978): 173-90, esp. 176-7; Sean Wilentz, “Against Exceptionalism: Class Consciousness and the American Labor Movement, 1790-1920,” International Labor and Working Class History 26 (1984): 1-24; Eric Foner, “Why is there no Socialism in the United States?,” History Workshop Journal 17 (1984): 57-80; Allan Kulikoff, “The Transition to Capitalism in Rural America,” William and Mary Quarterly 3rd ser. 46 (1989): 120-44, esp. 132-4; Christopher Clark, ed., “The Transition to Capitalism in America: A Panel Discussion,” History Teacher 27 (1994): 263-88. For a “feudal” interpretation, see Rowland Berthoff and John M. Murrin, “Feudalism, Communalism, and the Yeoman Freeholder: The American Revolution as a Social Accident,” Essays on the American Revolution, eds. Stephen G. Kurtz and James H. Hutson (Chapel Hill: University of North Carolina Press, 1973) 256-88.[/ref]
Western Exceptionalism and Human Nature
Yet however much American historians have challenged American exceptionalism, they have shown themselves far less capable of escaping an even more potent force: Western exceptionalism.[ref]Cf. Joyce Appleby, “A Different Kind of Independence: The Postwar Restructuring of the Historical Study of Early America,” William and Mary Quarterly 3rd ser. 50 (1993): 245.[/ref] Indeed, although American scholars might have a certain predisposition to imbibe the myth of maximizing, the myth is hardly just an American conceit in either origins or endorsement today. Twentieth-century American exceptionalism rests solidly upon a foundation of Western exceptionalism, both sharing in all of the great “isms” that scholars have so carefully traced from the eighteenth-century Enlightenment onward‑-romanticism, idealism, socialism, utilitarianism, progressivism, evolutionism, capitalism, political and economic liberalism‑-that intertwined in complex ways to undermine so thoroughly any idea of the world resting on a common human nature and necessity.[ref]What follows is a highly schematic analysis of the evolution of the modern social sciences in the nineteenth and twentieth centuries based on a wide-ranging but hardly complete exploration into the relevant literature including the works of Thomas Robert Malthus, Karl Marx, Max Weber, Alfred Marshall, Werner Sombart, Thorstein Veblen, and numerous other nineteenth- and twentieth-century social scientists and their commentators. Among the general secondary works that inform this analysis (although not always in agreement), see Harry Elmer Barnes, The New History and the Social Studies (New York: Century, 1925); Pitirim Sorokin, Modern Sociological Theories (New York: Harper, 1928); Edmund Whittaker, A History of Economic Ideas (New York: Longmans, 1940); Harry Elmer Barnes, ed., An Introduction to the History of Sociology (Chicago: University of Chicago Press, 1948); Harry Elmer Barnes, ed., An Introduction to the History of Sociology (Chicago: University of Chicago Press, 1948); Arthur O. Lovejoy, Essays in the History of Ideas (1948; New York: Capricorn, 1960); Edward N. Saveth, American Historians and European Immigrants 1875-1925 (1948; New York: Russell, 1965); Joseph A. Schumpeter, History of Economic Analysis, ed. Elizabeth Boody Schumpeter (New York: Oxford University Press, 1954); Elie Halévy, The Growth of Philosophical Radicalism, trans. Mary Morris (Boston: Beacon, 1955); Kenneth E. Bock, The Acceptance of Histories: Toward a Perspective for Social Science (Berkeley: University of California Press, 1956); David W. Noble, The Paradox of Progressive Thought (Minneapolis: University of Minnesota Press, 1958); Richard Hofstadter, Social Darwinism in American Thought, 2nd ed. (New York: Braziller, 1959); Bentley Glass, Owsei Temkin, and William L. Straus, Jr., eds., Forerunners of Darwin: 1745‑1859 (Baltimore: Johns Hopkins Press, 1959); H. Stuart Hughes, Consciousness and Society: The Reorientation of European Social Thought, 1890-1930 (New York: Vintage, 1961); Warren B. Catlin, The Progress of Economics: A History of Economic Thought (New York: Bookman, 1962); Nicholas Timasheff, Sociological Theory: Its Nature and Growth, 3rd ed. (New York: Random, 1967); Hutchinson, Population Debate; David Bidney, Theoretical Anthropology (New York: Schoken, 1967); R. Jackson Wilson, In Quest of Community: Social Philosophy in the United States, 1860-1920 (New York: Wiley, 1968); Marvin Harris, The Rise of Anthropological Theory: A History of Theories of Culture (New York: Crowell, 1968); Edward E. LeClair, Jr. and Harold K. Schneider, eds., Economic Anthropology: Readings in Theory and Analysis (New York: Holt, 1968); Talcott Parsons, The Structure of Social Action: A Study in Social Theory with Special Reference to a Group of Recent European Writers, 2 vols. (New York: Free, 1968); J. W. Burrow, Evolution and Society: A Study in Victorian Social Theory (Cambridge: Cambridge University Press, 1968); Sidney Pollard, The Idea of Progress: History and Society (New York: Basic, 1968); Anthony Leeds, “Darwinian and ‘Darwinian’ Evolutionism in the Study of Society and Culture,” The Comparative Reception of Darwinism, ed. Thomas F. Glick (Austin: University of Texas Press, 1972) 437‑85; Annemarie De Waal Malefijt, Images of Man: A History of Anthropological Thought (New York: Knopf, 1974); Fred W. Voget, A History of Ethnology (New York: Holt, 1975); Tom Bottomore and Robert Nisbet, eds., A History of Sociological Analysis (New York: Basic Books, 1978); Hamilton Cravens, The Triumph of Evolution: American Scientists and the Heredity-Environment Controversy 1900-1941 (Philadelphia: University of Pennsylvania Press, 1978); William F. Fine, Progressive Evolutionism and American Sociology, 1890-1920 (Ann Arbor: UMI Research, 1979); Erika Bourguignon, Psychological Anthropology: An Introduction to Human Nature and Cultural Differences (New York: Holt, 1979); Robert C. Bannister, Social Darwinism: Science and Myth in Anglo-American Social Thought (Philadelphia: Temple University Press, 1979); Merle Curti, Human Nature in American Thought: A History (Madison: University of Wisconsin Press, 1980); Robert Nisbet, History of the Idea of Progress (New York: Basic, 1980); Greta Jones, Social Darwinism and English Thought: The Interaction between Biological and Social Theory (Sussex: Harvester, 1980); John C. Greene, Science, Ideology,a nd World View: Essays in the History of Evolutionary Ideas (Berkeley: University of California Press, 1981); George W. Stocking, Jr., Race, Culture, and Evolution: Essays in the History of Anthropology, 2nd ed. (Chicago: University of Chicago Press, 1982); Stefan Collini, Donald Winch, and John Burrow, That Noble Science of Politics: A Study in Nineteenth-Century Intellectual History (Cambridge: Cambridge University Press, 1983); Sutti Ortiz, ed., Economic Anthropology: Topics and Theories (Lanham, MD: University Press of America, 1983); Robert Boakes, From Darwinism to Behaviourism: Psychology and the Minds of Animals (Cambridge: Cambridge University Press, 1984); Robert M. Young, Darwin’s Metaphor: Nature’s Place in Victorian Culture (Cambridge: Cambridge University Press, 1985); James T. Kloppenberg, Uncertain Victory: Social Democracy and Progressivism in European and American Thought, 1870‑1920 (New York: Oxford University Press, 1986); Howard L. Kaye, The Social Meaning of Modern Biology: From Social Darwinism to Sociobiology (New Haven: Yale University Press, 1986); George W. Stocking, Jr., Victorian Anthropology (New York: Free, 1987); Peter J. Bowler, The Non-Darwinian Revolution: Reinterpreting a Historical Myth (Baltimore: Johns Hopkins University Press, 1988); Jerome H. Barkow, Darwin, Sex, and Status: Biological Approaches to Mind and Culture (Toronto: University of Toronto Press, 1989); Peter J. Bowler, The Invention of Progress: The Victorians and the Past (Oxford: Blackwell, 1989); Carl N. Degler, In Search of Human Nature: The Decline and Revival of Darwinism in American Social Thought (New York: Oxford University Press, 1991); Talcott Parsons, The Early Essays, ed. Charles Camic (Chicago: University of Chicago Press, 1991); Jacob Viner, Essays on the Intellectual History of Economics, ed. Douglas A. Irwin (Princeton: Princeton University Press, 1991); Dorothy Ross, The Origins of American Social Science (Cambridge: Cambridge University Press, 1991); Alan Diamond, ed., The Victorian Achievement of Sir Henry Maine (Cambridge: Cambridge University Press, 1991); E. Fuller Torrey, Freudian Fraud: The Malignant Effect of Freud’s Theory on American Thought and Culture (New York: Harper, 1992); Gustav Jahoda, Crossroads between Culture and Mind: Continuities and Change in Theories of Human Nature (Cambridge: Harvard University Press, 1993); Henrika Kuklick, The Savage Within: The Social History of British Anthropology, 1885-1945 (Cambridge: Cambridge University Press, 1993).[/ref] By the late nineteenth century most Western thinkers conceived of themselves and their world as fundamentally different from anything that had come before or that existed in any other part of the world.
The pre-classical indolence model was gradually usurped over the course of the nineteenth century by competing progressivist and avarice models. Progressivists began to describe cultural differences past and present as differences in kind–“traditional” versus “modern”‑-racial-cum-cultural differences that sundered any belief in a common human nature, original, ultimate, or otherwise. In line with the central beliefs of Lamarckian evolutionism and recapitulation‑-that ontogeny (the development of the individual) follows phylogeny (the evolution of the species)‑-traditional people represented a lower, child-like level in psychic evolution of the human species. Traditional men and societies were custom-bound, instinct-driven, lazy, and had fixed wants. Modern men and societies, on the other hand, were relatively free from custom, rational, industrious, and had infinitely expansive wants. Although idealists and positivists alike would adopt a heavy racialism in explaining these changes, primitivists, socialists, and utopians turned the normative judgment around and celebrated the traditional Golden Age and the evils of modern institutions unleashed by avarice.
Combining both progressivist and avarice models in his historicization of Aristotle’s distinction between domestic economy and chrematistics, Karl Marx added a new ingredient to these nineteenth-century developments: the idea of the irrepressible force of capitalism as a form of perpetual necessity, a Darwinian struggle that relentlessly pushed men under the capitalist mode of production, regardless of the traditional or modern nature of the individuals.
All of these developments contributed to the triumph of high-wage theory in the West, celebrating both high wages for laborers and market competition for employers. For progressivists, the idea of a backward-sloping supply of labor was relegated to traditional individuals and societies who were usually assumed to be under the yoke of the “target income hypothesis.” Alfred Marshall, the major shaper of much of the modern approach to microeconomics, provided the classic progressivist statement of the perverse supply of labor:
No universal law can be laid down; but experience seems to show that the more ignorant and phlegmatic of races and of individuals, especially if they live in a southern clime, will stay at their work a shorter time, and will exert themselves less while at it, if the rate of pay rises so as to give them their accustomed enjoyments in return for less work than before. But those whose mental horizon is wider, and who have more firmness and elasticity of character, will work the harder and the longer the higher the rate of pay which is open to them; unless indeed they prefer to divert their activities to higher aims than work for material gain.[ref]Alfred Marshall, Principles of Economics, 8th ed. (New York: Macmillan, 1920) 528. See also James O’Connor, “Smith and Marshall on the Individual’s Supply of Labor: A Note,” Industrial and Labor Relations Review 14 (1961): 273-6; David Reisman, The Economics of Alfred Marshall (New York: St. Martin’s, 1986) 206-11. On Marshall’s great influence on economics, see Joseph A. Schumpeter, “Alfred Marshall’s Principles: A Semi-Centennial Appraisal,” American Economic Review 31 (1941): 243-4; G. F. Shove, “The Place of Marshall’s Principles in the Development of Economic Theory” Economic Journal 52 (1942): 313-4; George J. Stigler, “The Place of Marshall’s Principles in the Development of Economics,” Centenary Essays on Alfred Marshall, ed. John K. Whitaker (Cambridge: Cambridge University Press, 1990) 1-13.[/ref]
Marshall was on highly tenuous empirical grounds for making such a statement and may have been motivated by professional as well as racialist reasons. In particular, a forward-sloping supply curve sidestepped the difficulties of working out the mathematics of simultaneous backward-sloping supply and demand curves with no determinate intersection. Stigler observes that “the exclusion of backward-bending supply curves is so dogmatic that one may infer that Marshall did not analyse the utility foundations of supply,” an interpretation that other Marshallian scholars second.[ref]J. K. Whitaker, ed., The Early Economic Writings of Alfred Marshall, 1867-1890 (New York: Free, 1975) 124n17; A. N. M. Mahmood, “The Concept of Constant Marginal Utility of Money in Marshall’s Economic Analysis,” Alfred Marshall: Critical Assessments, 4 vols., ed. John Cunningham Wood (London: Croom Helm, 1982) 215-22.[/ref]
Nevertheless‑-whether idealist, positivist, or materialist, whether favoring a progressivist or avarice model of societal evolution‑-by the turn of the century when the social science disciplines were establishing their independent status, a general scholarly consensus divided individuals, communities, and societies into dichotomous categories of traditional versus modern, pre-capitalist versus capitalist, whether following Hegel, Marx, Maine, Tönnies, Simmel, Durkheim, Marshall, Sombart, or Weber. At their birth, the modern social sciences imbibed this dichotomy deeply and maintained it, divorced from biology and with all but the most amenable forms of psychology kept at arm’s length.
Although the racial element faded over the course of the twentieth century and the paradigm was sometimes challenged by movements on the fringes of the various disciplines that stressed traditional aspects of modern society and modern aspects of traditional society, this paradigm still reigns. Stigler reported in 1949 that, contrary to Marshall, “most economists now believe that [the negatively-sloped labor supply curve] is typical also of Anglo-Saxons; in the absence of such an attitude it would be difficult to rationalize the long decline in the hours of labor,” but there is little evidence in print of such an acceptance of perversity as normal.[ref]Stigler, Theory of Price 189.[/ref] Indeed, the by-now classic dichotomies were given their most dramatic treatment in the 1950s and 1960s under the aegis of “modernization” and “development economics.” Later critics of modernization theory have emphasized the persistence of traditional elements in the modern era and the inapplicability of historical models of Western development to modern Third World nations, but have focused primarily on cultural values and have not really challenged assumptions about economic behavior or the nature of capitalism.[ref]Dean C. Tipps, “Modernization Theory and the Comparative Study of Societies: A Critical Perspective,” Comparative Studies in Society and History 15 (1973): 199-226; Joyce Appleby, “Modernization Theory and the Formation of Modern Social Theories in England and America,” Comparative Studies in Society and History 20 (1978): 259-60; M. Francis Abraham, Perspectives on Modernization: Toward a General Theory of Third World Development (Washington: University Press of America, 1980) 8-10, 59-107; Dwight Hoover, “The Long Ordeal of Modernization Theory,” Prospects 11 (1986): 407-51.[/ref] On the other hand, since the 1960s, the partial encroachment into most of the social science disciplines of neoclassical economic and evolutionary biological models with their assumptions of maximizing utility and/or inclusive fitness, while certainly challenging assumptions of “traditional” economic behavior, have, if anything, reinforced notions of the perversity of backward-sloping supply behavior.
Thus we find a highly similar combination of push and pull forces at the heart of both American and Western exceptionalism. But all contribute to undermine the relevance of the idea of reversible necessity in the lives of modern man, whether resulting from fundamental changes in human nature or the transformation of the environment into a condition of perpetual necessity.
A Humean Corrective
The discipline of history in the United States was born in the same atmosphere of racial-cum-cultural determinism and traditional-modern dichotomization as all the other social sciences, whether the scholar worked within a framework of cultural continuity like Teutonism or American exceptionalism like Turner’s frontier thesis; Beardian materialism or Whiggish idealism; or history as science or history as art.[ref]On racialism, see Edward N. Saveth, American Historians and European Immigrants 1875-1925 (1948; New York: Russell, 1965) 122-37; Gilman M. Ostrander, “Turner and the Germ Theory,” Agricultural History 32 (1958): 258-61; Bronwen J. Cohen, “Nativism and Western Myth: The Influence of Nativist Ideas on the American Self-Image,” Journal of American Studies 8 (1974): 23-39.[/ref] While racial elements were eschewed in the early twentieth century, cultural determinism, totally divorced from discussions about human nature, continued to reign supreme in early American historiography throughout the twentieth century, as historians fumbled with determining in which category‑-traditional or modern‑-they might lump different individuals, communities, or societies.[ref]On the pervasive influence of modernization theory on American historians, see Appleby, “Modernization Theory” 259-61; Hoover, “Long Ordeal of Modernization Theory” 416-44.[/ref]
While no comparative overview of behavioral evidence across time, space, and culture can be treated as final, the evidence on labor supply as a whole does suggest that it is time for historians to question seriously the traditional and modern assumptions that underlie much of their analysis. Post-modernists in their own “idealist” way are challenging these core assumptions. However, there is an alternative to post-modernism, one which would perhaps even more radically challenge the core assumptions of the historical discipline, but from the opposite “positivist” direction, the only direction from which one can even begin to explain such behavioral regularities. That way is to take seriously the idea of reversible necessity and its implications for the ideas of historical continuity and a common human nature and against the ideas of a traditional-modern dichotomization and irrepressible environmental forces like the frontier or the capitalist mode of production. Such dichotomous thinking distorts our ability to understand not only early Americans but also other peoples in the past and present and, indeed, ourselves today.
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