I've had this working paper by Tony Baker on my desktop for awhile, and it has been discussed on some message boards. I wanted to link before I forget. It's a good online review of the problems interpreting Acheulean handaxes. Baker's preferred theory is that the "handaxes" were principally cores for flake extraction. This is not a novel view, but the unique aspect is the way he derives the argument from the physics of flaking:
Homo erectus did not select small cores from which to extract flakes (make handaxes). I propose he chose large cores because he did not have the manual dexterity to externally support them and, therefore, he had to rely on the inertial support. He just let them lie flat in his hand or on his leg. This inertial support knapping meant all blows had to be directed toward the center of mass. Flakes scars could not pass the center of mass so the handaxe remained relatively thick. Additionally, with numerous flake removals the handaxe became smaller and more ovate or discoid in shape because the blows were being directed from the furthest edge from the center of mass toward the center of mass.
This is all described well, which is what makes the paper worthwhile. This paragraph is a good encapsulation of the problem of the traditional view:
The Lower Paleolithic researchers who believe the Acheulean handaxe was the desired product do not find their justification in its function, since its function is not understood (Bordes 1968:64; Debenath and Dibble 1994:130; Gowlett, Crompton and Yu 2001:612; Isaac 1977:12,144; McPherron 2000:73; Roe 1981:271). Instead, they find their justification in its unchanging morphology. For a million plus years, its basic shape remained constant as it spread across three continents. It has a tip, a butt, and often symmetry in three dimensions. Its length is rarely longer than twice its width, and Gowlett has demonstrated at Kilombe, that a linear relationship between length and width explains 69% (R=0.83) of the variation (1995:202). Issac proved there was a strong correlation between the length/width ratio and length regardless of sites or continents (1977:139). Further, its width is rarely greater than three times it thickness. This unchanging morphology is, therefore, proof that the handaxe was constructed to conform to an unchanging, deeply engrained mental template.
When I looked at this first, I thought I would post an expanded review of the handaxe problem, but other matters delay that at the moment. In the meantime, Baker's paper is a valuable resource.
In summary, my belief is that the handaxe was a large biface core made by Homo erectus individuals who lacked the manual dexterity of modern humans. I arrived at this conclusion based on the morphology of the handaxe. And, since there is no fossil hand evidence to suggest otherwise, my theory is intact. I am forced to admit that I believe Homo erectus' hand was evolving during its 1.6 million years of existence. Therefore, I would expect there also was an evolution in the handaxe from large to small and thick to thin. Yet, this evolution is only going to be visible in vertically stratified sites or well-dated sites. And, then it will still be difficult to identify because the handaxe was the by-product of expedient flake extraction. It was not the desired product.
I think it would be better to replace "hands" here with "brains", as the prerequisite "dexterity" in this context probably is more mental than manual.