ABSTRACT
There is a very large literature reporting on the existence of ‘leisure-preference’ in history, and a further extensive bibliography of strikingly similar comments made in our own day about the same phenomenon. The idea is simple, even where it has a theoretical formulation as a ‘backward sloping supply curve for labour’. In brief, the concept implies that an increase in the demand for labour, expressed through an increase in its price with a rise in wages, will result in a lowering of supply. In one of the most famous expressions of this maxim Arthur Young, the eighteenth-century commentator on economic affairs, claimed that ‘everyone but an idiot knows that the lower classes must be kept poor or they will never be industrious’. This is contrary to the normal expectations of the working of a free market; and is the antithesis of standard market theory. In competitive conditions, assuming no absolute limitations on supply—either of existing labour willing to increase their working hours or extra labour willing to come into the market—the assumption governing the ‘rational’ operation of a market is that extra demand, bidding up the price of a factor, will call forth extra supplies, and that a fall in demand leading to a decline in price will lead to a fall in supply. A large corpus of basic economic argument, and more operational assumptions about a free market system, lie behind this assumption of ‘rational’ responses 149to price movements, which provide the signals for action and the incentive system in a commercial context. Deviations from this norm thus, by implication, raise important questions in their turn about the motivations of individuals in a commercial context, their economic rationality or irrationality, and the nature of the competitive context within which such responses occur.
