A Brief History of Hourly Billing and Timesheets
Ages are no more infallible than individuals—every age having held many opinions which subsequent ages have deemed not only false but absurd.
––John Stuart Mill
Benjamin Franklin is often cited by businesspeople for his much-repeated saying “Time is money.” This little adage has certainly infected the way professionals view the value of the services they deliver; unfortunately, it is taken out of context. The sentence was written in 1748—over 100 years prior to Marx’s labor theory of value—and it was in a letter Franklin sent to a young businessperson just starting out, and who had sought Franklin’s advice. Here is what Franklin wrote in its entirety on the subject of time in a letter entitled “Advice to a Young Tradesman”:
To my friend, A.B.:
As you have desired it of me, I write the following hints, which have been of service to me, and may, if observed, be so to you. Remember that time is money. He that can earn ten shillings a day by his labor, and goes abroad, or sits idle, one half of that day, though he spends but sixpence during his diversion or idleness, ought not to reckon that the only expense; he has really spent, or rather thrown away, five shillings besides (Krass 1999: 283).
Note that Franklin was not speaking of value, nor price; he was articulating the concept of opportunity cost—that is, a forgone opportunity, the road not traveled, coined by the Austrian economist Friedrich von Wieser (1851–1926). In ...