Maurice H. Dobb’s Wages: A Journey Ahead of the Standardization of Labor Economics (with François Allisson)

This blogpost is based on an ongoing research started in 2016 with François Allisson. Before meeting at Princeton for the ‘Learning by the Book’ Conference, participants were asked to write short pieces to be publihed on the History of Knowledge blog. This blogpost was originaly published as part of the ‘Learning by the Book’ series. It was first edited and published by Mark Stoneman in june 2018. After the conference, we decided to follow the Indian leads and to transform radically the project with a global perspective. That’s why the work is still very much *in progress*.

 

The Making of a Cambridge Handbook

In 1928, the Cambridge academic Marxist Maurice Dobb published a short textbook on wages that underwent five revised editions by 1959, many reprints, and diverse translations, including into Japanese (1931), Arabic (1957), Italian (1974), and Spanish (1986). As historians of economics, our naive idea was that it would be possible to observe the transformation of economic knowledge about wages by observing changes both in the book’s contents and in the textbook genre. On the whole, however, our study of the making of Wages and its diffusion let us do less and more than that.

Wages was part of the successful Cambridge Economic Handbooks (CEH) series, short monographs published jointly by Cambridge University Press (CUP) and Nisbet and Co. Usually nontechnical expositions of “economic problems” of the time, books in the series were crafted both for undergraduate students at Cambridge and the interested public. John Maynard Keynes, editor of the series from 1922 to 1936, commissioned the CEH volume on wages to Dobb, opposing Nisbet and Co’s suggestion to task Lionel Robbins from the London School of Economics. The book was to be kept within the Cambridge tradition. [1]

At the time, Dobb was a young lecturer in economics at the University of Cambridge, where he had earned his B.A. and had now returned after completing his Ph.D. at the London School of Economics. By commissioning Dobb, Keynes was clearly pursuing the Cambridge tradition under which both had been taught—influenced by Alfred Marshall’s legacy and textbook Principles of Economics.

Concerned with “labor problems” in a practical manner, Wages initially seems estranged from economic theory. Over the course of the book’s versions, the first three chapters and the final two (quantitatively the most important part of the book) barely changed in structure, while Dobb only made cosmetic updates. These are the chapters devoted to the history of the wage system, measuring the standard of living, the techniques of wage payment, and the history of trade unionism and state intervention. In the middle of the handbook, three chapters on theory discuss at length the usefulness of a general theory of wages, which Dobb deemed very low, emphasizing the role of bargaining power in the diverse practices of setting unequal wages. “Drastic changes” in the structure and content of these three chapters occurred in the 1938 and 1948 editions. [2]

One Diagram to Rule Them All?

In the discussion on the possibility of producing general laws of wages determination, Dobb included one of the first occurrences of a diagram of supply and demand applied to the labor market. [3] This single figure, the only one in the whole book, was a simple Marshallian cross diagram transposed to the labor market—not a standard practice in the 1930s. [4] Even more interesting, Dobb dropped the diagram by 1946.

Curves
Diagram of supply and demand applied to the labor market, Maurice H. Dobb, Wages, 1st ed. (London: Nisbet and Co and Cambridge University Press, 1928), p. 89.

Textbooks are sometimes used as shortcuts to access the state of a discipline at a particular point in time. [5] Against such a reductionist approach, we wish to emphasize the singularity of Wages’  trajectory. [6] While textbooks can fulfill several roles, Dobb wrote a skeptical handbook against the generalized trend that was to become standard, namely the integration of knowledge on labor issues (characterized in the 1930s by great attention to empirical and institutional factors in the setting of wages) with neoclassical wage theory. This approach was deductive and to be tested by statistical data.

Although he wrote from a central institution in the field, Cambridge, Dobb had a singular career. He was initially influenced by Marshall (via his studies and supervisors), one of the “founding fathers” of neoclassical partial equilibrium analysis. At the same time a convinced socialist, he joined the Communist Party of Great Britain in 1922. Writing academic articles as well as political pamphlets, he was somehow an isolated scholar at Cambridge, except for his relation with the Italian Cambridge-based economist Piero Sraffa. Dobb was very interested in communist experiences in the USSR and beyond, and he became a specialist of economic planning, building an international network of Marxist scholars.

In the immediate wartime and postwar editions, Dobb replaced the diagram with an almost verbatim copy-paste paragraph from his first academic paper, “A Skeptical Theory of Wages” (1929, The Economic Journal ). Based on earlier work done by Sraffa in the 1920s and opposing that of John Hicks, Dobb now denied the existence of a stable equilibrium. In a nutshell, to reach an equilibrium in a single market, it was necessary to assume that the curve of supply was independent from the curve of demand; otherwise both curves would move in an indefinite way without reaching equilibrium. Higher wages meant higher demand for bread and vegetables, which in turn impacted the labor market for producing these goods. Dobb agreed that these secondary effects were not “negligible.” Indeed, they impeded all efforts to construct a theoretical explanation of wages. What was specific to an otherwise traditional textbook of the 1930s was that Dobb talked about theory, and he did so very skeptically, a tendency completely reinforced after the war in the successive editions of Wages.

Dobb’s correspondence with his publisher entailed extensive discussions about paper shortages during and right after the war. More importantly, he still held ambitions for his textbook in the postwar period, especially for teaching purposes.[7] Yet Wages did not become a classic. In the 1950s, it ceased to be a required reading for the Tripos, the local examination system at Cambridge (The Cambridge Reporter mentions the book’s use until 1949). With his skeptical approach, Dobb resisted the integration of labor issues with the neoclassical theory of marginal productivity. As time went on, however, his handbook saw less and less use in the United Kingdom, and his position became increasingly marginal.

Displaced from the Center, Emerging at the Periphery?

The CEH series was a joint-venture publishing project between Nisbet and Co. and Cambridge University Press. The cost of publishing was divided between them, with a profit sharing scheme of 60 percent for Nisbet and 40 percent for Cambridge. The selection of topics and authors was the result of a negotiation dominated by the academic editors of the series. [8] Two main issues appeared in the correspondence between the successive editors responsible for the CEH series in the two publishing houses: the production costs of new editions (which implied CUP’s right to exercise control over revisions) and the rights for publishing abroad.

Edition
Commercial pamphlet for The Cambridge Economic Handbook series, as distributed in India by Macmillan and Company Limited, circa 1960. Source: University of Cambridge Library, Cambridge University Press Archives, PRESS 3/1/5/318, Folder 2.

The Nisbet and Co. company held many agreements with other publishers worldwide. In the United States, MacMillan published some CEH titles, but only chose the best-selling of the series (Robertson’s Money and Henderson’s Supply and Demand, for example). In the mid–1950s, Milton Friedman reluctantly assumed co-editorship of the collection for the United States, a joint project that Wages had never been part of. Meanwhile, the perceived center of the economics discipline moved from the United Kingdom to the United States during the interwar period. The globalization of economics did not follow simple paths, however. [9] Wages came to see increasing use on the “periphery” of this changing landscape.

Since the 1920s, Macmillan also held publishing houses in India, Ceylon, Burma, and possibly China. The case of India is interesting from the perspective of building “more global narratives.” [10] During the 1950s, Dobb spent time as a visiting scholar at the Delhi School of Economics and the Reserve Bank of India. While there, he published two articles on wages in The Indian Journal of Labour Economics and Industrial Labour in India. In these he presented an alternative theoretical framework to the then dominant paradigm. The publication of Wages_ in India while it disappeared from Dobb’s home country points to the need to study the increasing reception of this handbook in India and other nonaligned countries during the Cold War.

In the early 1970s, CUP thought to launch a renew series of handbooks and asked Joan Robinson to lead the project. [11] Despite several reissues and translations, Wages did not stand up well in the face of recent developments in the 1960s, especially the human capital theory. Yet precisely its woes make studying Wages a productive way to provide new narratives on the transformation of the political economy of labor from the neoclassical theory of distribution to the constitution of the field of labor economics. A view from the margins.


Notes

    1. On the coherence and transformation of what “Cambridge political economy” means, see Maria Cristina Marcuzzo and Annalisa Rosselli, “”Cambridge School of Economics,” in Handbook on the History of Economic Analysis, Volume II: Schools of Thought in Economics, ed. Gilbert Facarello and Heinz D. Kurz (Cheltenham, UK: Edward Elgar Publishing, 2016), 343–57. back
    2. Maurice H. Dobb, Wages, 3rd ed. (London: Nisbet and Co and Cambridge University Press, 1948), xi. back
    3. Dobb, Wages, 1928, 89; 1933, 89. Bruce Kaufman claims “no labor textbooks of the 1920s and 1930s … featured a demand-supply diagram of wage determination; indeed, not even John Hicks’ Theory of Wages (1932) did so.” See Bruce E. Kaufman, “Chicago and the Development of the Twentieth-Century Labor Economics,” in The Elgar Companion to the Chicago School of Economics, ed. Ross B. Emmet (Cheltenham, UK: Edward Elgar Publishing, 2010), 129. See also G. R. Boyer and R. S. Smith, “The Development of the Neoclassical Tradition in Labor Economics,” Industrial and Labor Relations Review 52, no. 2 (2011): 131–35. The narrative is in fact more complex. back
    4. On the specific use of diagrams by Marshall, see Hsiang-Ke Chao and Harro Maas, “Engines of Discovery: Jevons and Marshall on the Methods of Graphs and Diagrams,” Research in the History of Economic Thought and Methodology 35A (2017): 35–61. back
    5. On the use and abuses of textbooks in the history of economics, see Yann Giraud, “Textbooks in the Historiography of Recent Economics,” in The Contemporary Historiography of Economics, ed. Till Düppe and Roy Weintraub (2018, London: Routledge). back
    6. On textbooks as “outliers” rather than good proxies to check the evolution of a field of knowledge, see David Kaiser, “A Tale of Two Textbooks: Experiments in Genre,” Isis 103, no. 1 (March 2012): 126–38. back
    7. “I should want to make some fairly extensive revisions to make the book serve as a textbook in the post-war period.” Letter from Dobb to Roberts (editor at Cambridge University Press), February 26, 1946, Cambridge University Library, CUP Archives, Pr.A D 422/5. The debate on cost and paper was not trivial so we could not rule out that the dropping of the diagram was linked to the costs of producing it. back
    8. All developments on the edition history are from the CUP archives as Nisbet and Co. did not keep a record of its contracts. back
    9. On the internationalization (and debates on the “Americanization”) of economics after World War II, see A. W. Coats, ed., The Post–1945 Internationalization of Economics, special issue of History of Political Economy 28, Issue Supplement (1996). back
    10. See Josep Simon, “Textbooks,” in A Companion to the History of Science, ed. Bernard Lightman (Chichester, UK: John Wiley and Son, 2016), 400–13. back
    11. At the same time, she was losing the battle to establish a “revolutionary textbook” explicitly targeting the U.S. market and Samuelson’s bestselling Economics. See John E. King and Alex Millmow, “Death of Revolutionary Textbook,” History of Political Economy 35, no. 1 (Spring 2003): 105–34. back

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