Monday, July 30, 2012

Old Lumps Never Die... They Just Fly!

Sometimes I stumble across recitations of the lump of labor catechism that I missed at the time. Here's one that's untimeliness has become timely by the juxtaposition of the 2003 Bloomberg column to an advertisement for a current Bloomberg feature: "Lump-of-Labour Fallacy Gussied Up for a New Era" and "Flying Robots"!


Ms. Baum bills herself on twitter as "a Bloomberg View columnist, writing about the macro-economy and the intersection beween [sic] politics and economics. My specialty is exposing economic nonsense." The unintentional ambiguity of the last claim is refreshingly frank. So I wrote to Madam Baum (and her editor):
Dear Caroline Baum,

Your twitter profile says that you write about the "intersection beween politics and economics." Obviously that should read "between." But that's not why I'm writing. Your profile also states that your "specialty is exposing economic nonsense." Way back in 2003 you wrote about the lump-of-labor fallacy being "gussied up for a new era." Well, here's an opportunity to expose some economic nonsense, provided you can admit being misled in the past.

A few years before Bloomberg published your column, my first article on the history of the fallacy claim was published by Routledge in an anthology edited by Lonnie Golden and Deb Figart, Working Time: International trends, theory and policy perspectives. Seven years later, the Review of Social Economy published my second academic article dealing with the history and substance of the fallacy claim. Since then I've continued archival research and have finally traced the claim down to a 1780 pamphlet by a Lancashire magistrate named Dorning Rasbotham. To make a long story short, the argument has always been a bait and switch, red herring, straw man argument. But to make that short story longer, it is fascinating to trace through history the imaginative and varied ad hoc "explanations" that expositors of the fallacy have appended to the ubiquitous but utterly fictional "belief in a fixed amount of work."

Anxieties about unemployment may be founded or unfounded but in either case they have nothing to do with an erroneous belief that the amount of work to be done is fixed in the long run. In fact, the fallacy claim (that is, the claim that the fallacy exists, not the alleged fallacy) has been refuted repeatedly by economists -- to no avail. Many more economists have recited by rote the fallacy claim without once addressing or even acknowledging the challenges to the fallacy claim's authority.

Having watched my research on the history of the fallacy claim similarly ignored by economists and columnists alike, I have taken to building robot economist puppets of the worthies who recite the bogus claim as if it were gospel. My current rogues' gallery of robot economists includes Paul Samuelson, Paul Krugman, Richard Layard, Jonathan Portes, Lawrence Katz, David Autor, Ryan Avent, Matthew Bishop and Clive Crook (the last three being columnists for The Economist magazine). I've posted short videos of the puppets dancing and chanting their fallacy claims at http://ecologicalheadstand.blogspot.ca/2012/07/thoughts-and-dreams-about-machines-new.html

Cheers,

Tom Walker

The challenge, of course, will now be to construct a Flying Robot Baum (reminds me of the flying monkeys from The Wizard of Oz). I suppose just replacing the arms with wings should do it.

Meanwhile, at the "George W. Bush Institute," Ike Brannon (Growth Fellow at the G.W.B. Institute and Director of Economic Policy and Congressional Relations at the American Action Forum) denounced, "Luddites, Lumps of Labor, and a Laundry List of Illogic" back in May. As Brannon confessed, "The hackneyed trope of a lazy columnist is to take down someone else’s column, but alas, that is precisely what my column will do." Lazy columnist and hack that he is, Dr. Brannon didn't bother to actually know anything about the lump of labor fallacy claim he invoked. Being even lazier that Dr. Brannon, I'm confident it is enough to mention that he is a "Growth Fellow at the George W. Bush Institute" to refute whatever the fucking moron might have to say. Sounds like a affectionate nickname for somebody's malignant tumor: "I went to the clinic the other day for a colonoscopy and was relieved they didn't find a 'growth fellow'."

Friday, July 13, 2012

Introducing the Lump-of-Labor Robot Economists:

This crude stop-action video is meant as a place holder until the full dramatic videos can be produced starring Big Shot economists who parrot the lump of labor fallacy claim.



See also the earlier Kruglump narration:

Saturday, February 4, 2012

FAIL

Those who make the fallacy claim fail to offer specific evidence of the supposed belief in a fixed amount of work.

Immanent Critique

Those who make the fallacy claim neglect to offer specific evidence of the supposed belief in a fixed amount of work.

Friday, January 20, 2012

Faith-based Fallacy Mongering

A lump-of-labour fallacy claimant responds to my criticism of the lack of evidence for the assumption that current hours are optimal:
"Of course I don't provide evidence. It is self-evident. Suppose I work for you for 30 hours per week. Suppose you then find out that it would be much more effective to hire 2 people working for 15 hours each instead. Say, because marginal productivity declines very fast. Or because of complementary skills. Or whatever. Either way, what would you do? -You would split the job, of course. Why on earth would you need a government bureaucrat telling you to do you what is good for you? How likely is it that you don't know how to achieve a productivity gain in your business, while some distant bureaucrat does know?"
Evidence? Of course I don't provide evidence. Why on earth would we need evidence? It is self-evident. I don't have to show you any stinkin' evidence!



Sir Sydney J. Chapman: "The reforming employer would run the risk of paying the whole cost of the labor value created by shorter hours and getting little in return; other employers might secure and exhaust the new labor value, and no permanent good would be effected."

Cecil Pigou: "employers also often fail to realise that shorter hours would promote efficiency among their workpeople, and so would redound to their own interest."

J. R. Hicks: "a very modest degree of rationality on the part of employers will thus lead them to reduce hours to the output optimum as soon as Trade Unionism has to be reckoned with at all seriously."

Thursday, December 15, 2011

What's Wrong with the Case AGAINST Shorter Working Time? I

1. The proposition accused of being false
Every day many strangers came to town, and among them one day came two swindlers. They let it be known they were weavers, and they said they could weave the most magnificent fabrics imaginable. Not only were their colors and patterns uncommonly fine, but clothes made of this cloth had a wonderful way of becoming invisible to anyone who was unfit for his office, or who was unusually stupid…
One of the more peculiar and puzzling responses to the New Economics Foundation's 21 Hours report was the charge that the authors committed a "lump-of-labour fallacy" – that their policy proposals were based on the assumption that the amount of work to be done is a fixed quantity. This complaint needs to be taken seriously, not because it has substance – it doesn't – but because of the extraordinary resilience of the fallacy myth despite its anachronism and incoherence.

The case for shorter working time is based on a cluster of core propositions, none of which are traceable to a "fixed amount of work":
  • the economy does not self-adjust to achieve "the best of all possible worlds";
  • there are physical constraints on the sustainable consumption of natural resources, including people's health (and, in the view of many environmental scientists, some of those limits are already being breached);
  • unemployment and overwork are not the "revealed preferences" or voluntary income/leisure choice of individuals; and, finally,
  • given a workforce in which many are currently unemployed or underemployed and others are overworked, policies that promote a more equitable distribution of working time can contribute to both social justice and ecological sustainability.

Part II

What's Wrong with the Case AGAINST Shorter Working Time? II

2. The fallacy claim 

An example of the fallacy claim appeared in an opinion piece by Kristian Niemietz, "When Paternalism Meets Bogus Economics: The New Economics Foundation's 21 Hours Report," published by the Institute of Economic Affairs, which bills itself as "the U.K.'s original free-market think-tank." According to Niemietz:
This is not ‘new economics’, but a rephrasing of the old lump-of-labour fallacy, the idea that the amount of work which is ‘required’ in an economy is somehow fixed and can be redistributed ‘justly’…

The case for work-sharing rests on a number of assumptions. Demand for working hours must be largely fixed; work must be easily divisible; and the work of one person must be a close substitute for the work of another person. When these conditions hold, an employer will be indifferent between employing A for 40 hours, or employing A and B for 20 hours each. But when the conditions are violated, then work-sharing imposes additional costs per working hour, and the quantity of hours demanded can decrease – the ‘scale effect’.
The second and third assumptions attributed by Niemietz to the case for work-sharing are gratuitous. Work is divisible and workers are substitutable for one another in principle. What Niemietz is indirectly getting at with his two extra assumptions is the idea that reducing the hours of work will necessarily increase labour costs. That conviction is based on the unstated assumption that current arrangements of working time are optimal or at least closer to optimal than would be a more evenly-distributed arrangement of hours. He presents no evidence to support his optimistic assessment of the status quo.

Niemietz's polemic thus boils down to two disconnected assertions about what advocates believe, and the optimality of current arrangements, for which he presents no evidence. As Daniel Kinderman (2001) has pointed out, the "fixed amount" in the generic fallacy claim could represent either a "floor" or a "ceiling." Niemietz relies on a "floor" explanation: higher labour costs will reduce the demand for labour below what it would otherwise be (the floor) . Other versions of the fallacy myth use a "ceiling" argument, in which advocates of shorter work time are alleged to neglect the long-term job creation prospects of economic growth.

There are numerous explanations of the supposed fallacy. Each begins with a plausible molehill of analysis and inflates it into a mountain of dogma. Tucked in behind that surfeit of rationales is a set of propositions that are typically left unstated in current polemics. Unlike the fallacy claim, these propositions are not conjecture; there are more than enough documented affirmations of them to piece together a representative profile – which turns out to be a mirror image of the case for work time reduction. They are the assumption that, if true (but only if true), would vindicate the claim that the case for work-sharing is based on the assumption of a fixed amount of work:
  • the economy does self-adjust to achieve the best of all possible worlds (or, if it doesn't, the proper role of governments and central banks is limited to stimulating growth and controlling inflation);
  • there are no physical constraints on the sustainable consumption of natural resources;
  • unemployment and overwork are the "revealed preferences" or income/leisure choice of individuals; and, finally,
  • any policy interference with the optimizing, self-adjusting process of market choice (other than stimulating growth and controlling inflation) can only make things worse.

Part III