Energy, Labor, and the Industrial Revolution

Abstract

William Stanley Jevons enunciated fully the marginal beginnings of neoclassical economics in The Theory of Political Economy. However, his mathematical approach was essentially static, as was most of the neoclassical economics that was to follow. It was a quest for a stable equilibrium. Neoclassical economics thereby lacks sufficiently dynamic and historical approaches to incorporate the evolution of human institutions and changes in the quality and nature of resources, especially energy.  Jevons failed to understand the transition of the handicraft economy, based on skilled labor and the solar flow, to the industrial economy based on stocks of fossil fuels and operative labor. His theory of the labor supply, found in chapter five of The Theory of Political Economy, was based on individual rational choice on the part of workers as to how many hours of labor they would provide to the market by equating the utility of the wage with the disutility of the work. This left Jevons unappreciative of the compulsion involved in the actual creation of a labor force and unable to understand fully the part played by labor in the transition from the handcraft to the industrial economy. Moreover, Jevons' fealty to the doctrines of free trade and free competition left him unable to analyze fully the role of monopoly concentration  in the emergence of the fossil fuel economy.