The Lump of Labor

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 pr...

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 addition...

3. How the fallacy myth inhibits movement toward a shorter working week and how it came to have such unearned credence The movement for shorter hours of work played a pivotal role in the founding and growth of trade unionism in Europe and North America. Economic analysis related to those labour struggles also played an important role in displacing classical political economy and challenging the ideological hold of the panglossian doctrine of laissez-faire. By the end of the 1930s, the 40-hour workweek had become a legislated standard in the United States. Labour unions and many economists welcomed the prospect of a continuing decline. So what happened? Two of the key elements in the interruption were the gradual downgrading and then abandonment by unions of the shorter work time strategy, and the adoption by economists of highly-abstract mathematical theory. In 1887, the founding president of the American Federation of Labor, Samuel Gompers said, "The answer to all opponents...

4. Why the fallacy claim is false The case for work time reduction does not rest on the assumption that there is "a fixed amount of work to be done." Whether the demand for labour increases, decreases or stays the same, the work can be divided up differently. Whether it would be advantageous to do so under some particular circumstances is an empirical question, not an a priori certainty or fallacy. Furthermore, the division of labour has been a key tenet of economic thought since Adam Smith and his analysis of a pin factory. Exactly how easily work may be divided and how appropriate any given substitution is are design issues, which are, as Keynes would put it, "a matter of taste and experience…" This is true for any economic policy – not only work-sharing – and for individuals and firms no less than governments. Even if some proponents of work time reduction did wrongly believe in a fixed demand for work, that still wouldn't invalidate their proposals. ...

5. Conclusion They tell us sometimes that if we had only kept quiet, all these desirable things would have come about of themselves. I am reminded of the Greek clown who, having seen an archer bring down a flying bird, remarked, sagely: 'You might have saved your arrow, for the bird anyway would have been killed by the fall.' – Elizabeth Cady Stanton So how does an archaic, incoherent and unauthenticated textbook homily succeed in discrediting contemporary efforts to move towards a shorter working week? As with the "magnificent fabric" in the story of the Emperor's new clothes, the counterintuitive, esoteric subtlety of the fallacy is said to be invisible to fools. The real message of the fallacy claim is "this is an issue of such dazzling complexity that it can only be comprehended by mathematically-rigorous adepts (and 'free-market' think-tank snake-oil salesmen). Keep your mouths shut and your noses to the grindstones, you fools. We're in cha...

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