Mises in Human Action: “The disutility of labor is not of a categorial and aprioristic character. We can without contradiction think of a world in which labor does not cause uneasiness, and we can depict the state of affairs prevailing in such a world. But the real world is conditioned by the disutility of labor. Only theorems based on the assumption that labor is a source of uneasiness are applicable for the comprehension of what is going on in this world. Experience teaches that there is disutility of labor. But it does not teach it directly. There is no phenomenon that introduces itself as disutility of labor. There are only data of experience which are interpreted, on the ground of aprioristic knowledge, to mean that men consider leisure—i.e., the absence of labor—other things being equal, as a more desirable condition than the expenditure of labor. We see that men renounce advantages which they could get by working more—that is, that they are ready to make sacrifices for the attainment of leisure. We infer from this fact that leisure is valued as a good and that labor is regarded as a burden. But for previous praxeological insight, we would never be in a position to reach this conclusion.”(p.65)
Rothbard in Man, Economy and State: “It is a subsidiary assumption, based on empirical observation of actual human behavior. It is not deducible from human action because its contrary is conceivable, although not generally existing.”(p.43)
Both Mises and Rothbard are clearly mistaken in this case. The disutility of labour can be proven aprioristically and can be deduced from praxeology. It is not a “subsidiary assumption” because of some physiological aversion towards labour.
Traditionally, leisure is considered a good while labour is considered a burden. This statement is misleading. Correctly defined, leisure is your body. You own your own body. It is your private property. You will use your private property, your body, in any such way that maximizes utility. Leisure is constantly consumed, often in different ways. Labour, on the other hand, is just the giving away of leisure. Labour is when your privately owned body is temporarily exchanged, commonly, for a salary.
Basically, it can be deduced through praxeology that humans never want to give up private property (unless they have so much that marginal utility has gone negative). Humans act to remove uneasiness and the more property you own, presumably, the less constraints on physical reality there will be which better allows you to maximize utility. Put simply, most people want as much private property as possible. Giving up private property brings disutility just like receiving private property brings utility.
When humans engage in labour they are making an exchange. The individual is giving up his privately owned body(leisure) for a salary. The leisure brings utility but it is valued less than the salary so the exchange takes place. By engaging in labour you must do what your employer wants you to do instead of what you want to do. Considering that your action will maximize utility doing anything else will lower utility, hence disutility.
In a normal transaction where someone purchases a good with money it always(except when marginal utility has gone negative because too much money is owned) brings disutility to give up the money. The transaction only occurs because something of higher value is exchanged in return.
Only in the case where you have too much of a certain unit of private property will you choose to give it up without anything in return. For example, if you eat too many hamburgers you eventually get sick and choose to throw the rest out or if you have too much clothing in your dresser it could be an inconvenience so you throw out clothing.
This can also occur with labour. A popular expression goes “I’m bored, I have too much time on my hands”. Although, time is constant, it is impossible to have “too much time”. The clock does not tick any slower just because you’re bored. The problem is not too much time, rather, it is too much leisure. Boredom comes from having so much excess leisure that marginal utility reaches negative territory. It is perfectly feasible that someone who is stuck at home with nothing to do would accept a job even if there was no compensation. However, this is rare and it would likely take a while before this was the case because leisure can be consumed in many different ways.
A good such as wood can be burned to make a fire or used to build a house. The same good can be used as a means to attain different ends. Similarly, leisure can be consumed through many different activities which is why it is rare to have too much of this good.
An easy way to illustrate the main concept of this article is through the example of apple-picking. Apple-picking is sometimes associated with leisure. People pick apples as an activity because it brings utility. However, apple-picking from a different perspective can be taken as employment and therefore brings disutility. How can the same activity be considered leisure and labour? The answer is clear. It is considered leisure when the individual owns their own body and is choosing to maximize utility through such means. It is considered labour when the individual has exchanged his body for a salary. The individual’s employer can now tell the individual what he must do. Human action is the link between the mind and reality(private property). If you have temporarily exchanged your body for a salary then you do not own it. Your mind cannot link with your body(private property) and so human action does not occur, which means you cannot act to maximize utility.
My explanation of how labour is giving up your body may sound like slavery. However, it is not. It is merely a voluntary exchange. What differentiates it from slavery is that there is no coercion involved. The loss of one’s body(leisure) is contingent on the salary received.
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Your definition of diminishing marginal utility is correct but eventually additional units will bring disutility or else you're making the assumption of monotonicity. Being forced to drink an endless supply of water will definitely bring disutility. Eventually having too much of a good will force you to go lower and lower on the value scale until you value it negatively.
Labour occurs because the leisure is valued less than the salary. However, in theory, if you have too much leisure you might want to give it away for free. Someone might choose to work if they're really really bored and have no alternatives.
Hi Lawrence,
We discussed this in some depth before. See this thread and the two Iinked to in that OP, one of which has almost exactly the same title as this thread.
I think you're basically correct, although I explained it in a slightly different way. But one part that seems incorrect is the bolded part:
Apple-picking is sometimes associated with leisure. People pick apples as an activity because it brings utility. However, apple-picking from a different perspective can be taken as employment and therefore brings disutility. How can the same activity be considered leisure and labour? The answer is clear. It is considered leisure when the individual owns their own body and is choosing to maximize utility through such means. It is considered labour when the individual has exchanged his body for a salary.
I would say it is impossible to objectively define through observations what is labor and what is leisure, as I think you are attempting to do here. Whether an individual is performing labor or leisure is entirely subjective. Is he performing the activity for it's own sake, or for the rewards he will have when he finishes the activity? We can't know just by making observations; we need to know his motivations. As I see it, labor and leisure are two different types of actions, however some actions (actually most actions) are a mixture of the two. For example, I might enjoy reading a book, but I am not reading it purely for pleasure; I am reading it to become more knowledgable about the subject of the book. In this example, my action is a mixture of labor and leisure.
P.S. Was it you that I was chatting to yesterday on youtube?
Government Explained 2: The Special Piece of Paper
Law without Government
Yup, same person as on youtube. Libertarianmonarchy.com
I agree that "it is impossible to objectively define through observations what is labor and what is leisure".
My point was that labor is just having to give up your leisure which is just as painful as giving away any other good.
You agree with me though that, for all practical purposes, the disutility of labor is a praxeological deduction. And disagree with Rothbard and Mises. Right?
Lawrence: Your definition of diminishing marginal utility is correct but eventually additional units will bring disutility or else you're making the assumption of monotonicity. Being forced to drink an endless supply of water will definitely bring disutility. Eventually having too much of a good will force you to go lower and lower on the value scale until you value it negatively.
Where I disagree with you is in your stipulation of being forced to drink an endless supply of water. If one possesses more units of water, one will not necessarily drink it; he may start bathing with it, or irrigating crops, or building fountains. The point is that each additional unit will go to an end that is valued less, and this is the aspect that diminishes.
The main issue I have with what you've said is that there would be a point at which the utility of a good would turn into disutility. As Rothbard says in MES, "the utility of X units of a good is always greater than the utility of X-1 units" (p. 25). A good, by definition, satisfies an end. If it did not do this, it wouldn't be considered a good in the first place.
Lawrence: Labour occurs because the leisure is valued less than the salary. However, in theory, if you have too much leisure you might want to give it away for free. Someone might choose to work if they're really really bored and have no alternatives.
I agree that labor occurs when leisure is valued less than the salary, but not because leisure is at any point of a negative value; labor, which does have disutility, will only be undertaken if its fruits are more highly valued than leisure's. If in your example somebody chooses to work for free, it isn't because leisure has a negative value - they are substituting one type of leisure for another. Boredom is simply a form of uneasiness, and if one cannot find gainful employment to obtain a salary, and one has so much free time on hand as to regard "laboring," say being a farmhand, as the best alternative, this is simply another form of leisure (for Mises). It may be hard work, and it may not be the form of leisure that other individuals would choose, but that individual chooses to pass the time by expending a lot of energy. He is not laboring in the economic sense.
Mises defined labor as "the employment of the physiological functions and manifestations of human life as a means...Labor is a means, not an end in itself. (HA p. 131)
Later, he elaborates on the difference between labor and leisure, even if they resemble one another:
The fact is often ignored that those activities which bring about immediate gratification and are thus direct sources of pleasure and enjoyment, are essentially different from labor and working. Only a very superficial treatment of the facts concerned can fail to recognize these differences. Paddling a canoe as it is practiced on Sundays for amusement on the lakes of public parks can only from the point of view of hydromechanics be likened to the rowing of boatsmen and galley slaves. When judged as a means for the attainment of ends it is as different as is the humming of an aria by a rambler from the recital of the same aria by the singer in the opera. The carefree Sunday paddler and the singing rambler derive immediate gratification from their activities, but not mediate gratification. What they do is therefore not labor, not the employment of their physiological functions for the attainment of ends other than the mere exercise of these functions. It is merely pleasure. It is an end in itself; it is done for its own sake and does not render any further service. (pp 137-8)
Again, if something is done solely as a way to eliminate boredom, it is done for its own sake and thus cannot be called labor. It is still leisure.
Also, isn't the point of making the distinction between praxeologically deduced categories and empirical observations simply to account for the theoretically possible presence of extreme "workaholics" and the like? It seems that they're saying that the concept of the "disutility of labor" does not have the same apodictic certainty that other categories of action have, because it is possible to conceive of some type of creative genius for whom labor offers no disutility, while leisure (i.e., not producing) is an intense psychological burden. Contrast this with the task of trying to conceive of a man for whom the action axiom is not true, and it's clear why they made the distinction.
I will admit that I've never been able to fully grasp all the implications of concept of "categories" of action, but I will say that I don't see a problem with distinguishing between this as an empirical observation and some of the other purportedly universal and logically necessary features of praxeology.
Lawrence:Your definition of diminishing marginal utility is correct but eventually additional units will bring disutility or else you're making the assumption of monotonicity. Being forced to drink an endless supply of water will definitely bring disutility. Eventually having too much of a good will force you to go lower and lower on the value scale until you value it negatively.
This statement just isn't true. First off, I'm not sure what it means to value something negatively. How I value various ends is alway in relation to other ends, and not some actual value scale which has measurements from -x to +x. What could hypothetically happen with an ever increasing supply of some good is that it no longer serves any end I have in mind. But the reality is that for such a situation to occur to good would have to be so abundant that I wouldn't be able to even exchange it for some other good, making me question whether this constitutes a good (it may be non-scarce).
they said we would have an unfair fun advantage
mikachusetts: Lawrence:Your definition of diminishing marginal utility is correct but eventually additional units will bring disutility or else you're making the assumption of monotonicity. Being forced to drink an endless supply of water will definitely bring disutility. Eventually having too much of a good will force you to go lower and lower on the value scale until you value it negatively. This statement just isn't true. First off, I'm not sure what it means to value something negatively. How I value various ends is alway in relation to other ends, and not some actual value scale which has measurements from -x to +x. What could hypothetically happen with an ever increasing supply of some good is that it no longer serves any end I have in mind. But the reality is that for such a situation to occur to good would have to be so abundant that I wouldn't be able to even exchange it for some other good, making me question whether this constitutes a good (it may be non-scarce).
This is my point exactly.
http://en.wikipedia.org/wiki/File:UtilityQuantified.svg
Just look at that chart. Most economists accept the fact that the marginal unit has less and less value until it becomes a burden. I don't think Rothbard or Mises every disputed this.
Austrians explicitly reject the quantification of values, which is what the chart you posted represents. What most economists accept is inconsequential to what constitutes laws of praxeology, which is what your post was initially about.
Yes, I disagree with both Mises' and Rothbard's formulations (which are broadly similar). But no I would not call the disutility of labor a praxeological deduction. I actually think of it as a 'situational proposition' (that's my own term, which I will now explain).
They describe the disutility of labor as not a praxeological deduction, but an empirical observation, or subsidiary assumption, that must be acknowledged or made because later economic laws depend on it. They say we can imagine a world where labor is not disutilitous, but as you point out, in such a world that so-called 'labor' would really be leisure. So yes it certainly feels like disutility is implied by the very word labor. I agree on this point, but there is still a subsidiary assumption that we must make. Namely we must posit that humans labor. Like the action axiom, this is the labor axiom. What it means is that humans have satisfactions that they can't achieve purely through leisure activities. Humans undertake some tasks (which we call laborious tasks) because they want the end result; this is a labor action. Leisure actions are performed for their own sake; there is continuous satisfaction throughout the action.
I've always found it odd that Rothbard stresses that this is the first time in MES that what he is saying has not been derived from the action axiom. Even if we 'patch up' Rothbard as I have described, is he still right to say that the disutility of labor labor axiom, is the first of its kind to appear in MES? I don't think so. For example, by this point in the book he has already talked about different stages of production; introducing terms like "producers goods". When he introduces these terms and concepts, he is effectvely saying that from this point onwards we are imagining a world in which producers goods exist. That is, a world in which humans have some desires that cannot be satisfied by either leisure or laboring to produce a consumers good. Some of our satisfactions require producers goods. We could call this the "producers' goods axiom".
So I don't see anything special or troubling about making this "subsidiary assumption" about labor, because we make all kinds of other "subsidiary assumptions". This is really just the process of introducing and defining new categories and concepts into the science. It doesn't make praxeology any less powerful or rigid; it simply specifies the kind of world that we are operating in. This is why I call all these things "situational propositions".
The imaginary world that Mises and Rothbard are talking about where 'labor is disutilitous' (more accurately stated as nobody labors) is simply a world where this particular situational proposition - that humans labor - has been relaxed. This is no different to imagining a barter economy, say. When we do that, we simply relax the situational proposition that money exists. Whether or not it is useful to consider a world where nobody labors is another matter.
Lawrence: I don't think Rothbard or Mises every disputed this. I don't have a quote of Mises on hand, but I'm sure he did. As for Rothbard, earlier in this very thread I posted a quote in which he disputed that claim. On page 25 of Man, Economy, and State he states that "the utility of X units of a good is always greater than the utility of X-1 units." Just one page later, he includes a diagram illustrating this law, and a verbal restatement: "The diagram illustrates the aforementioned [law] that the utility (value) of more units is greater than the utility of fewer units..." (p.26) Rothbard includes no mention of a caveat that, at a certain point an additional unit may prove to be burdensome or provide disutility. By use of the word "law" he clearly implies no such limiting notions, and obviously his word "always" in his explicit formulation above should make it clear that, whatever most economists may think about the concept of utility, Rothbard was not on board with diminishing total utility or anything of the like. Total utility (obviously ordinal, not cardinal) must increase as the supply of that good increases, because the actor will be able to satisfy more of his ends with that greater supply. However, those ends will be progressively less useful to the actor on account of their being less urgently desired. | Post Points: 5
I don't think Rothbard or Mises every disputed this.
Graham Wright: They say we can imagine a world where labor is not disutilitous, but as you point out, in such a world that so-called 'labor' would really be leisure. So yes it certainly feels like disutility is implied by the very word labor.
They say we can imagine a world where labor is not disutilitous, but as you point out, in such a world that so-called 'labor' would really be leisure. So yes it certainly feels like disutility is implied by the very word labor.
The conceptual barrier between labor and leisure is not, as you're implying, utility versus disutility; in fact that's just the point Mises and Rothbard are making. One is able to conceive of a situation in which labor does not offer disutility, so to define them this way is not so helpful. The more expedient classification method is whether an activity offers, in Mises' parlance "mediate or immediate gratification." If an activity offers solely immediate gratification, by definition it cannot be called labor. An activity may or may not bring about disutility, but if it is able to offer mediate gratification then it is a means to a further end and can be called labor.
Given the wiggle room above, it would be incorrect to say that labor as a praxeological rule is always 'disutilitous'; however, being that it almost always is, we can call it an empirical observation.
I still don't understand why you said "But no I would not call the disutility of labor a praxeological deduction."
Here's my proof as simple as can be:
1) Leisure is a good
2) Humans prefer to have more goods than less goods
3) To engage in labour, you must forego leisure(a good)
4) Giving up a good brings disutility, because consuming that good would bring utility.
Therefore, labor brings disutility.
Where is the flaw in my logic?
Stephen:The conceptual barrier between labor and leisure is not, as you're implying, utility versus disutility; in fact that's just the point Mises and Rothbard are making. One is able to conceive of a situation in which labor does not offer disutility, so to define them this way is not so helpful. The more expedient classification method is whether an activity offers, in Mises' parlance "mediate or immediate gratification." If an activity offers solely immediate gratification, by definition it cannot be called labor. An activity may or may not bring about disutility, but if it is able to offer mediate gratification then it is a means to a further end and can be called labor. Given the wiggle room above, it would be incorrect to say that labor as a praxeological rule is always 'disutilitous'; however, being that it almost always is, we can call it an empirical observation.
It's not a praxeological rule. What do you mean by 'almost'? What exceptions do you have in mind? Let me explain why there are none...
Think of a scale with pure leisure at one end and pure labor at the other end. So at the leisure end are activities which are done purely for their own sake, for immediate satisfaction. The satisfaction comes throughout the activity and then the satisfaction ends when the activity ends. There is no satisfaction in "having done it". At the labor end of the scale are activites which yield no immediate satisfaction; they are performed purely for mediate satisfaction. All activites in between (which is most activites) provide some immediate satisfaction, and some mediate satisfaction.
Whether a given action is leisure or labor depends on how the actor values the immediate ends achieved by the activity, compared to the mediate ends. More precisely, if the mediate ends are removed from the actor's choice, would he still perform the same activity just to achieve the immediate ends? If he would, then we can say that for this actor, this activity was leisure. If the prospect of no mediate ends would have led to the actor making a different choice, then the activity is laborious to him. This is the borderline between where we could call an activity labor and where we would call it leisure.
As I explained in my post, I think 'disutility of labor' is confusing and misleading. But it is true in a sense because the laborer (actor performing a labor activity) does always suffer disutility. By definition he would have made a different choice of action if it weren't for the mediate ends that the activity would yield. The counterfactual where the actor made a different choice would have yielded immediate ends of higher value to him, and hence actors always suffer this disutility by laboring.
The whole section of MES dealing with disutility of labor can be replaced by the situational proposition I talked about, which might informally be stated as We have to work for stuff, noting that work sucks by definition.
"More precisely, if the mediate ends are removed from the actor's choice, would he still perform the same activity just to achieve the immediate ends? If he would, then we can say that for this actor, this activity was leisure. If the prospect of no mediate ends would have led to the actor making a different choice, then the activity is laborious to him. This is the borderline between where we could call an activity labor and where we would call it leisure."
That's exactly right. The conclusion is that in no situation could labor bring utility. Therefore the disutility of labor is proven without the use of empiricism. It is deduced through praxeology.