Consumption, Work Hours, and Values in the Writings of John A. Ryan: Is it Possible to Return to the Road Not Taken?

Abstract

The 1920s saw important debate about consumption and work hours. Some industrialists argued that work hours needed to remain high to sustain demand for output; others thought they could fall because people would buy goods to complement their leisure. In contrast, John A. Ryan thought that work hours could and should decline in the interests of “industrial sanity, social well-being, and desirable human life.” This paper discusses Ryan's views of consumption and work hours, which were far broader and richer than contemporary critique. Ryan's writings clarify that, if contemporary projects are to engender the sort of fundamental changes in everyday life contemplated in the 1920s, they need to consider social as well as individual values and the ineludible distributional dimensions of the consumerist lifestyle; otherwise their effects may be confined to promoting lifestyle adjustment among better-off groups.

Keywords:

• consumption
• work hours
• wellbeing
• John Ryan

Acknowledgements

I am grateful to Jane Clary, Deb Figart, David George, Lonnie Golden, Robert Prasch, participants in the session on ‘Living Standards, Social Standards, and Well-Being’ at the 2006 ASE/ASSA meetings, two anonymous referees, and especially Benjamin Hunnicutt for valuable comments on an earlier version of this paper.

Notes

Figart and Golden (1998) summarize the statistical evidence and discuss methodological issues that contribute to the debate.

See, for example, Lehndorff (2000) and Jacobs and Gerson (2000, pp. 93 – 94).

See, notably, de Graaf (2003), which is the official handbook of the “Take Back Your Time” movement, and Elgin (1993).

Recent analyses of living-wage issues and experiences can be found in Figart (2001, 2004) and special issues of Industrial Relations (January 2005) and Economic Development Quarterly (February 2005).

Gearty (1952) provides detailed consideration of Ryan's economic thinking.

Data are from The Historical Statistics of the United States. Note that numbers for radios and movies are for 1922 – 1929.

For in-depth treatment of the discussions of the era, see Hunnicutt (1988), especially Chapters 2 – 4.

Historical Statistics of the U.S., Tables D127 – 141 and D765 – 778.

Some economists, including Knight, expected industrial growth to level off on its own: because the marginal utility of consumption would decline as its level rose, people would want to work less and spend more time in leisure. See Hunnicutt (1988, pp. 51 – 52) for discussion. J.M. Keynes (1932, p. 364) also foresaw a time when economic needs would be satisfied, and “man [sic] will be faced with his real, his permanent problem—how to occupy the leisure which science and compound interest have won for him.” In his view, however, this was a problem to be faced by his generation's grandchildren.

This phrase is due to Cowdrick (1927).

Ford's explanation of his decision is contained in Crowther (1926).

See Hunnicutt (1988, Ch. 2) for full discussion.

This is an important theme of Leven et al. (1934), who document that, in 1929, households with incomes above $10,000 represented only 2 percent of all non-farm households, but earned 28 percent of total non-farm income (pp. 60 and 228 – 230).

Ryan's views in this respect foreshadow those of Keynes (e.g. 1936, Ch. 24). However, whereas Keynes understood this to be a recurrent dynamic of business cycles, for Ryan (like many others in his day), this imbalance was a conjunctural problem resulting from the unchecked rise of income inequality during the industrial boom.

As much as American economists of the era (including Ryan) rejected the idea of underconsumption as a source of chronic instability in capitalist development, underconsumption associated with maldistribution was widely accepted as an important cause of the Great Depression; see Leven et al. (1934). In fact, the degree of wealth inequality in the US was unusually high before the Great Depression: according to estimates of Wolff (1996, 2000), the top 1 percent of households owned 44 percent of the total value of household wealth in 1929, up from 37 percent in 1922; this share slid to about 20 percent in the 1970s, but then reversed its decline, climbing back to 38 percent by 1998. See Higgins (1942) for discussion of Ryan's views on underconsumption, which were influenced by the work of Hobson.

Ryan (1931b, p. 242). For further discussion, see Hunnicutt (1983).

Ryan (1931b, p. 242). See also Stockhausen (1998) on the economic thinking of Pope John Paul II, who also criticized the aggrandizement of production for its own sake.

See Figart (2001) for in-depth discussion of the ethical foundations of the living wage.

Although note that, in Ryan's view, a decent livelihood was a right, not an entitlement, and involved a concomitant obligation to work: “all persons are equal in their inherent claims upon the bounty of nature; this general right of access to the earth becomes concretely valid through the expenditure of useful labor” (1927, p. 395).

For example, Ryan (1935, p. 190) writes, “Consider the numerous efforts of strong business concerns to injure and destroy the weak. Consider the enormous frauds perpetrated on the consumer through unjustly high prices and unjustly low wages … Consider the trickery and tyranny of powerful corporations that force their employees into company unions and deny the right of free organizations. … When we contemplate these and many other indications of the same sort, we realize the pertinence of [Pope Pius XI's] words about the necessity of a reform in morals.” Ryan here refers to the Pope's 1931 encyclical, “On Reconstructing the Social Order” (Quadragesimo Anno).

Certainly Rockefeller personified this split, with his ruthless pursuit of monopoly power in business standing in stark contrast to the charity with which he disposed of his wealth (Chernow 1998).

Here Ryan (1927, p. 269) quotes St Thomas Aquinas: “As regards the power of acquiring and dispensing material goods, man may lawfully possess them as his own; as regards their use, however, a man ought not to look upon them as his own, but as common, so that he may readily minister to the needs of others.” See also Ryan (1935, p. 151): “The private proprietor is not the absolute owner of all the things he calls his. He is merely the trustee, responsible to God for such use of his possessions as will not frustrate the divinely destined end of all created goods, namely, the sustenance of all the people.”

See Hunnicutt (1984; 1998, Chs. 5 and 6) on initiatives to reduce hours during the Great Depression. As he emphasizes, a measure legislating a 30-hour work week was passed by the Senate in 1933, and seemed to be only days away from being passed by the House and endorsed by President Roosevelt.

The description of getting-and-spending as a “squirrel cage” is often attributed to Schor— but Ryan used it to describe the high-production economy as “a squirrel cage concept of progress unenlightened by considerations of the other ethical and human claims of the individual or the church. It has produced a culture sunk in materialism without a transcendent vision.” See Hunnicutt (1988, p. 90).

It is estimated that about 20 percent of the labor force is exempt from the FLSA (US Department of Labor 2001, p. 4). The rules determining whether a worker is covered by the FLSA are relatively complicated, and tens of thousands of complaints about non-compliance are logged each year. See Landers et al. (1996) on the subject of rat-race hours competitions in large law firms, and also George (2000).

Golden and Gebreselassie (2005) provide a detailed analysis of the incidence of overwork, using data from the May 2001 Current Population Survey, which asked workers about their preferences for reducing income in exchange for shorter hours. See also Jacobs and Gerson (1998).

Thus, for example, in 2003, households in the top quintile of the income distribution earned 50 percent of total household income, and were responsible for 38 percent of total consumer spending. (US Census Bureau 2005, Table A3, and US Bureau of Labor Statistics 2005).

This is not strictly fair because the emphasis reflects that which may be immediately feasible, rather than what is desirable in the long run.

The pay of CEOs of large companies skyrocketed in the 1990s, reaching a multiple of 300 – 500 times the earnings of the average worker (see Starr, forthcoming).

See, for example, the papers contained in Harvard Business Review (2003).

Again, the collection of pieces in de Graaf (2003) provides good illustration.