The Lump Stops Here: the ongoing saga of a bogus fallacy and those who propagate it.by the Sandwichman
TAKING MY LUMPSA few years ago, I set out on a quest to find the locus classicus of the peculiarly named "lump-of-labour fallacy." As some of you may recall, I eventually tracked down an 1891 article by David Frederick Schloss in which he referred to "that noteworthy fallacy to which I desire to direct attention under the name of 'the theory of the Lump of Labour.'" I further traced the critique of the central notion of that theory, "that there is a certain fixed amount of work to be done" to an 1871 article by John Wilson, "Economic Fallacies and Labour Utopias," in which he berated the "Unionist reading of the Wage-fund theory" for its enforcement of restrictions "with the avowed object of securing that the work to be done shall be divided among as many (Unionist) hands as possible."
The other day, I was looking at a pamphlet that has been on my bookshelves for 30 years and that I have probably read 4 or 5 times, Karl Marx's 1865 "Wages, Price and Profit" and there, staring at me from the first sentence of the first section were the words, "Citizen Weston's argument rested, in fact, upon two premises: firstly, that the amount of national production is a fixed thing, a constant quantity or magnitude, as the mathematicians would say; secondly, that the amount of real wages, that is to say, of wages as measured by the quantity of the commodities they can buy, is a fixed amount, a constant magnitude.
Even less ambiguous was this sentence on page 14: "If our friend Weston's fixed idea of a fixed amount of wages, a fixed amount of production, a fixed degree of the productive power of labour, a fixed and permanent will of the capitalists, and all his other fixedness and finality were correct, Professor Senior's woeful forebodings would have been right, and Robert Owen, who already in 1816 proclaimed a general limitation of the working day the first preparatory step to the emancipation of the working class and actually in the teeth of the general prejudice inaugurated it on his own hook in his cotton factory at New Lanark, would have been wrong.
The irony, as anyone familiar with the textbook (e.g., Samuelson) admonition about lumps of labor will recognize is that the latter-day version refers to the fallacy to show why proposals for shorter work time are without merit. Proponents of shorter hours, "economists" tell us, are operating under the popular delusion that there is only a fixed amount of work to be done.
So, yes, the critique of the lump-of- labour fallacy is indeed a critique of a trade unionist reading of the old wages-fund theory. It is, however, a critique of a merely trade unionist position on wages. Paul Samuelson, The Economist, The Wall Street Journal, Bruce Bartlett, Jennifer Hunt, Paul Krugman, Richard Layard, etc., etc., have all along been teaching Marxism without knowing it! But, aside from inverting the conclusion regarding limiting the hours of work, they left out the best part: "Instead of the conservative motto, 'A fair day's wage for a fair day's work!' they ought to inscribe on their banner the revolutionary watchword, 'Abolition of the wages system!'
Postscript: in searching for a link to one of the Economist's articles on the lump of labour fallacy, I came across this entry in Economist.com's "Economics A-Z." Superficially, it would appear to confirm my identification of D.F. Schloss as the source for the lump of labour fallacy. Except that I am sure that it is my research that the Economist has appropriated and, in their method of doing so, trivialized. Of course, they've only passed on the identity of Schloss without going into what he actually said and how, according to Schloss himself in the 1891 article, his remarks had nothing to do with the question of the length of the working day. I feel both flattered and bitter.
DEBUNKIN' DA LUMPFirst, a little known fact:
"Theodore Herzl, the founder of modern, political Zionism, proposed a seven-hour day for the new state. He felt that this position was so important that he proposed a design for the national flag that included seven gold stars on a white field. It was to serve as a magnet for Jews everywhere in the world to flock to the ‘truly promised land’." -- H. Freudenberger, Work efficiency and endogenous growth, Economic History Review, May 1998.
... and now the rest of the story. The first thing to understand about this so-called lump-of-labor fallacy is that the original fallacy that went by that name had nothing to do with the hours of work. The fallacy of the "theory of the lump-of-labor" was coined by David F. Schloss and referred to the restriction of output, not to the limitation of hours. The term eventually got grafted on to something else entirely: John Rae's critique of the employment-creating potential of the eight-hour day. What Schloss's critique and Rae's had in common was the old claim that their opponents assumed "a fixed amount of work to be done."
The first ironic thing about Rae's critique was that he was in favour of the eight-hour day. He was just arguing that creating employment wasn't a good reason for it. The second ironic thing about Rae's critiique is that it was itself based on the self-same fallacy that it sought to discredit, a bug (or was it a feature?) pointed out right away by Charles Beardsley, Jr., "Mr. Rae's position seems perfectly clear, but it depends on a half-truth. Ceteris paribus, wages vary with the productiveness of industry, but only ceteris paribus. The theory that wages depend entirely on the efficiency of labor, or on the product of industry, is a new form of the old doctrine of the wages-fund." In other words, the fallacious assumption of a fixed amount of work that Rae attributed to proponents of shorter hours as a remedy for unemployment is only necessary if we first accept Rae's fallacious assumption of wages depending entirely on the efficiency of labour. It's like the old joke about the economist on the desert island with a case of canned food, "assume we have a can opener..."
I go into this convoluted mess in more detail in my paper "The 'lump-of-labor' case against worksharing: populist fallacy or marginalist throwback?". I also show how a reduction in working time could quite easily both improve productivity and increase employment at the same time.
There's one big drawback to shorter work time as an employment policy tool: it strengthens rather than weakens the bargaining position of labour. We can't have that, can we, Alan Greenspan? Can we, Milton Friedman?
SANDWICHMAN BLASTS BBC, ECONOMISTTwo more sightings (or citings) of the malignant lump:
Why Europe votes for workers' playtime
By James Arnold
BBC News Online business reporter
July 26. 2004
"The idea of restricting working hours is based on what economists call the 'lump of work' fallacy - the idea that there is a fixed amount of activity in the economy which can be chopped up into smaller pieces, creating jobs."
Europe wakes up to the folly of excessive labour-market regulation
July 15, 2004
"The notion that there is a fixed amount of work to be shared out, so that shorter hours for all must mean more jobs, is widely derided by economists as the 'lump of labour' fallacy."
Editor, The Economist,
Ever since I tracked down the origins of the infamous "lump-of-labour fallacy" in 1999, I have monitored appearances of the hoary canard in the financial papers. Even though I wrote a detailed letter to the editor of the Economist several years ago, your newspaper persists in propagating something that is a lie, a damned lie... but at any rate not a statistic. There is "no such thing" as the lump of labour fallacy that you folks keep peddling. Apparently the author of your "Economics A-Z" feature is familiar enough with the results of my research to have connected the name of D.F. Schloss with the phrase but not at all familiar with D.F. Schloss's own work.
I also see that in your commentary on recent rollbacks of the 35-hour week in Europe ("Europe wakes up to the folly of excessive labour-market regulation," July 15), your paper once again invokes the fraudulent fallacy: "The notion that there is a fixed amount of work to be shared out, so that shorter hours for all must mean more jobs, is widely derided by economists as the 'lump of labour' fallacy."
How your newspaper can insist on citing the lump-of-labour fallacy as authoritative without once going back to the original sources and discovering how convoluted and self-contradictory their arguments were is beyond me. I suppose the "derided by economists" line makes it all technically correct, like G.W. Bush's "the British government has learned" disclaimer in his State of the Union address.
In a sense, I guess it doesn't really matter to you whether there's any foundation to your reporting on working time or labour flexibility. Heck, if employers and the financial press call a spade a club and mismanage industrial labour relations as a result -- there's no harm done. The government will jump in and bail the big investors out and you can always find a scapegoat for the misery you've helped to create. You don't care. You've got your story and you're sticking to it. Right?
WHACK-A-MOLE 101Over at the Milken Institute Review there's a piece on the lump-of-labor fallacy by Timothy Taylor, managing editor of the Journal of Economic Perspectives
"There’s an arcade game called Whack-a-Mole in which a plastic mole pops up and you pound its head with a mallet. The lump-of-labor fallacy is the Whack-a-Mole of arguments about jobs. As often as you slam it, it reappears somewhere else."
Tim's got it all wrong. It's the phony fallacy claim that keeps popping up. So I'm going to have to pound poor Timmy's head with my mallet. Hey, it's his analogy, not mine...
I was delighted to see your “Dept. of Misunderstandings” feature on the lump-of-labor fallacy in the Miliken Institute Review. For one thing, your identification of D.F. Schloss as the economist who gave the fallacy its peculiar name confirms my own conclusion, published in 2000 in “The ‘lump-of-labor’ case against work-sharing: Populist fallacy or marginalist throwback?” (in Working Time: International trends, theory and policy perspectives, Lonnie Golden and Deborah M. Figart, eds.). At the time I wrote my article the source of the fallacy’s name was obscure. Even Paul Samuelson was unable to pinpoint its origin in response to my inquiry.
Secondly, it is good that you acknowledge the inherent benefits of shorter work time as a goal worth pursuing for its own sake, regardless of any alleged effect on employment. I’m also glad you realize that international trade and new technology may cause dislocations quite apart from any misconceptions about a fixed amount of work.
It is unfortunate, however, that those welcome acknowledgments come only toward the very end of your article -- after you have already filled up most of six pages whacking several dead horses with the tired red herring of the alleged fallacy. The curious thing about this fanciful fallacy is that it hinges not upon the easily-decided question of whether or not there actually is a fixed amount of work to be done (is the earth flat? is the moon made of green cheese?) but on the unsubstantiated and mischievous claim that so-and-so assumes there is a fixed amount of work to be done. Like a crime, a fallacy is only a fallacy if someone commits it.
If so-and-so doesn’t make the assumption -- that is, if it can’t be demonstrated that they must make the assumption in order to reach the conclusion they do -- the fallacy claim amounts to nothing more than a straw man. Even exaggerated fears of the effects of change don’t need to be based on the fallacious assumption but can be simply an overestimation of perfectly reasonable concerns. Miscalculation is not fallacy. For more than a century, wielders of the lump-of-labor whack-a-mole mallet have repeatedly failed to establish that those they accuse of believing in a fixed amount of work believe any such thing. A prime example of this long-running charade occurred in a 1930s labor economics textbook by Royal Montgomery of the University of Chicago. Montgomery patiently and appreciatively surveyed the reasons stated by trade unionists in favour of shorter work time and found them credible. Then, in a closing non sequitur, he suddenly concluded that the real reason trade unionist seek shorter work time was their fallacious belief in the lump-of-labor. Case closed. No evidence. No argument. Just “there you have it.” And it’s not as if advocates of shorter work time have never heard of nor refuted the fallacy claims. The first direct rebuttal I’m aware of was in 1897 by the British trade unionist and campaigner for the eight-hour day, Tom Mann. But try telling that to a billboard.
It is also disappointing that you rely on a rather facile assortment of anecdotal facts to demonstrate that policies such as limiting the hours of work have not succeeded in fighting unemployment (and therefore, by inference, presumably cannot succeed). The long-term historical picture has been that over the past 150 years, the reduction of the hours of work has been an integral part of the introduction of progressive changes in technology and work organization. Frederick Winslow Taylor was explicit about the contribution of adequate rest periods to increased productivity. Schloss, who was very much a contemporary and professional peer of Taylor’s, stated just a few lines after his lump-of-labor remarks that he was entirely in favour of shortening the working day -- at a time when most employers were dogmatically opposed.
But undoubtedly the most remarkable testimony to the positive role played by reduction of the hours of work was contained in Sir Sydney Chapman’s 1909 presidential address to the Section on Economic Science and Statistics of the British Association for the Advancement of Science. Alfred Marshall, Lionel Robbins, John Hicks and Arthur Pigou all referred to Professor Chapman’s theory as authoritative. Hicks called it the “classical statement of the theory of ‘hours’ in a free market.” To make a long story short, Chapman argued that competitive pressures would tend to set the working day at a longer than optimal length. He also referred to a preponderance of empirical evidence showing productivity improvements subsequent to the introduction of shorter working hours. In my paper, mentioned above, I examined one possible implication of such a phenomenon: if current hours of work exceed the optimum, as Chapman’s theory suggests they might, the reduction of working time could result in simultaneous increases in wages, productivity and employment. That result has nothing to do with a “fixed amount of work.” I would be most grateful if you would have a closer look at my argument as developed in detail in the enclosed article.
Exactly how the unsubstantiated and silly complaint about a lump-of-labor fallacy managed to eclipse Chapman’s authoritative theory is a story for another day. But the story of the lump’s pedigree is so astounding I can’t resist mentioning a few highlights. It is my impression that the complaint about an illusory belief in a fixed amount of work was promoted to its place as a mainstay in economic teaching not by economists themselves but by publicists for strike-breaking employers’ associations in Britain and the United States at the beginning of the 20th century. A key document in that unmerited upgrade was a series of articles that appeared in the London Times in November of 1901 under the title, “The Crisis in British Industry.” William Collison, self-described “apostle of free labour” -- that is, a contractor who supplied strike-breaking employees -- was reputed to have provided much of the “research” for the series. In the US, the propaganda campaign was engaged by the National Association of Manufacturers under its stridently anti-union president, David M. Parry, whom the Wall Street Journal deplored as a hothead. Incidentally, the cereal tycoon, C.W. Post was one of Parry’s confederates responsible for orchestrating the association’s relations with the press. It was at about this time that Post was running ads promoting his Grape-Nuts (which, it almost goes without saying, contained neither grapes nor nuts) as a treatment for appendicitis and a cure for loose teeth.
Leaving aside its lumpy nickname, the claim about a belief in a fixed amount of work goes back to John Wilson’s 1871 polemic against a “Unionist reading of the Wage-fund theory” under which unions sought “the enforcement of all sorts of arbitrary restrictions on the combined workmen with the avowed object of securing that the work to be done shall be divided among as many (Unionist) hands as possible.” Ironically, it was only shortly before Wilson wrote his polemic that the self-same wages-fund theory was righteously upheld by political economists and employers. It is only after the unionists started acutely working out its (incorrect) implications that political economists hastily jettisoned the position.
Most ironic, in a tale of too many ironies, it was none other than Karl Marx who launched the first (as far as I am aware) sustained assault on the “Unionist reading of the Wage-fund theory.” That assault came in his address to the General Council of the First International delivered on June 20 and 27, 1865, or six years before Wilson’s article. The address was subsequently published as the pamphlet, Wages, Price and Profit. In it, Marx took “Citizen Weston” to task for basing his arguments on the erroneous premise of a fixed amount of national production (which may be restated as a “fixed amount of work”) and a fixed amount of real wages. For the benefit of anyone who missed the significance of his opening sally, several pages later in his address Marx laid withering rhetorical emphasis on Weston’s ‘fixities’, “If our friend Weston’s fixed idea of a fixed amount of wages, a fixed amount of production, a fixed degree of the productive power of labour, a fixed and permanent will of the capitalists, and all his other fixedness and finality were correct...” Such a rhetorical tour de force was well calculated to fix in the listener’s memory the fallacy of a fixation on fixedness.
In his pamphlet, Marx painstakingly demonstrated the basis for his claim about the fixed amounts Citizen Weston assumed. This is in stark contrast to the anecdotal practice of Wilson, Schloss, Collison, Parry, Montgomery, Samuelson and the rest of the lump-of-labor mallet swingers. More recently, on the odd occasion when economists have attempted to retrofit an algebraic demonstration to the fallacy claim, the results have been incomplete and ultimately incoherent. Invariably, these attempts at demonstration rely on the unstated assumption that the given hours of work are optimal and that therefore any reduction in hours will result in a suboptimal condition. That assumption contradicts Chapman’s authoritative theory but the worst part is that it is unstated. Back in the 1930s, when John Hicks made an explicit assumption about the given hours of work being optimal, he did so for the sake of convenience and with clear acknowledgment that his provisional assumption was contrary to what theory suggested might be the case.
As I have covered a lot of ground in this letter, in closing I would like to return to my main point, which is that if one reasonably assumes that the current hours of work are overly long, then a reduction in the hours of work can quite feasibly (if implemented competently) result in an increase in employment. The foregoing assumption is consistent with Chapman’s theory of the hours of labor. No assumption of a fixed amount of work is necessary to reach such a conclusion and therefore, the fallacy claim is groundless. I would therefore suggest you amend the final sentence of your article by adding just a few words: “But the [spurious claim of a] lump-of-labor fallacy has been impeding and confusing the legitimate arguments about jobs for more than a century now, and it’s time to give it a rest.”
UNE ERREUR DU MORCEAU DU TRAVAIL?From the October 18th report (PDF file) to the French Minister of Finance from Michel Camdessus, former head of the International Monetary Fund (here's an AFP news item for those who don't want to wade through an 161 page plus appendices bureaucratic report in French):
La logique de partage repose sur l’hypothèse qu’il existe, dans l’économie, une quantité d’emplois déterminée et fixe. Cette logique se vérifie, à un instant donné du temps, pour une activité, un secteur, une région particulière. Mais elle est fausse pour l’économie dans son ensemble, surtout quand on considère les évolutions dans le temps.
In plain English, Monsieur Camdessus is saying that advocates of reduced working time believe that there is only a fixed amount of work to be done. That is to say, we commit the infamous "lump-of-labor fallacy," the bogus claims of which your Sandwichman disposed of (another PDF file) four years ago.
The logic of work sharing IS NOT based on the erroneous assumption that there is only a fixed amount of work to be done. It is based on several factors, including the improved productivity enabled by reducing working time and the improved standard of living that greater leisure affords to the workers. Meanwhile, the almighty croissance of the GDP IS NOT, as the Camdessus report explicitly assumes, an unalloyed blessing to mother earth and all mankind. Bobby Kennedy knew that 36 years ago. The good folks at Redefining Progress can give you the details.
Proof that a lowly Sandwichman is smarter than the former head of the IMF! O.K. Monsieurs Camdessus and Sarkozy. $5,000 (Canadian) says you can't verify the authenticity of the lump of labour fallacy claim. Anyone is eligible to try for that prize.
OF THE DUMMIES, BY THE DUMMIES, FOR THE DUMMIES...O.K. dummies, there will be a quiz after the reading assignment.
The lump of labor fallacy for dummies
The argument that there's a fixed amount of work that you can divide up among as many people as you want is often presented as a cure for unemployment. The idea goes that if you convert from a 40-hour workweek to a 20-hour workweek, firms will have to hire twice as many workers. France, for instance, recently reduced its workweek to only 35 hours in the hope that firms would hire more workers and cure France's persistent unemployment problem.
It didn't work; such policies have never worked. One problem is that hiring workers involves many fixed costs, including training costs and health insurance. So two 20-hour-per-week workers cost more to employ than one 40-hour-per-week worker. What's more, two 20-hour-per-week workers don't produce any more output than one 40-hour-per-week worker.
So if laws were passed that forced firms to move from a 40-hour work week to a 20-hour work week, firms wouldn't double the size of their workforces. They'd hire fewer than twice as many workers because costs would go up.
In addition, even if cutting the work week in half actually did double the number of workers used, it would only hide the overall unemployment problem by spreading it around. If 100 percent of workers are working half-time, they are all 50 percent underemployed. That situation is not a significant improvement over having 50 percent of the population employed full-time and 50 percent unemployed.
1. Who presents the argument that there is a fixed amount of work?
2. What's the difference between 20 hours and 35 hours?
3. How does the author define "fixed costs"?
4. What is it called when we assume that productivity per hour is constant?
5. What evidence does the author give that the 35-hour workweek in France "didn't work?"
6. What evidence does the author give that "such policies have never worked?"
7. What assumptions can you infer from the following statement: "If 100 percent of workers are working half-time, they are all 50 percent underemployed."
8. Explain why it is always better to have a 50% unemployment rate than a 20-hour workweek.
PLAGIARISM OR BOILERPLATE?Goes to show there is Only So Much Words to Go Round... and round... and round...
Commentary: 'Lump of Labor' Notion Doesn't Work
By Reginald Dale International Herald Tribune
Tuesday, October 21, 1997
"One of the best-known fallacies in economics is the notion that there is a fixed amount of work - a "lump of labor" - that can be shared out in different ways to lead to fewer or more jobs...."
Economics A-Z: LUMP OF LABOUR FALLACY
adapted from Essential Economics by Matthew Bishop, 2004, p. 159
"One of the best-known fallacies in ECONOMICS is the notion that there is a fixed amount of work to be done - a lump of LABOUR - which can be shared out in different ways to create fewer or more jobs...."
Disclaimer: The Sandwichman will stop "obsessing" about the fraudulent claim of a lump-of-labour fallacy the minute know-nothing pundits and third-rate economics writers stop perpetuating it.
LUMP WATCHEurope: Economic facts of life
Giles Merritt International Herald Tribune
FRIDAY, FEBRUARY 17, 2006
The whole row is as absurd as it is heated. In the first place, it rests on one of the oldest misconceptions derided in economics textbooks - the lump of labor fallacy is the mistaken notion that there is only a given amount of work to be done in an economy, or a fixed number of jobs to be divided up; in reality, more workers generate more economic activity.
To the editor, International Herald Tribune
I'm in favor of the free movement of people so it pains me to see Gilles Merritt use bad arguments on behalf of a good cause. The lump-of-labor fallacy claim may well be derided in (some) economics textbooks but that's only because textbook authors tend to repeat thngs that were said in previous textbooks without checking the original sources. Having traced the sources and written published and currently in-review scholarly articles on the strange history of the fallacy claim, I can assure you that it's a red herring. Opposition to immigration isn't necessarily based on the "notion that there is only a given amount of work to be done in an economy." It can also more realistically relate to fears that the alternative sources of labor can be -- and often are -- used by employers as a wedge in bargaining.
A couple of years ago, it was hilarious to watch employers like Siemens and Daimler-Chryler threaten to move jobs 'off-shore' unless they got union concessions on wages and hours and at the same time read pompous invocations of the lump-of-labor fallacy in denunciation of the shorter hours that the workers were being pressured to give up. But according to the textbooks, presumably the export of those jobs should have just generated more economic activity and so the displaced workers would immediately be re-employed (albeit at a lower wage, perhaps). Again according to the textbooks, lower wages should generate even more economic activity and thus lead, eventually to higher wages. Had those silly workers only read the textbooks they might have realized that they really had nothing to lose (in the long run) by refusing concessions. That is, assuming the textbooks know what they are talking about.
Dear Giles Merritt,
You have fallen into the "it's in the textbooks it must be true" trap (almost as treacherous as the "I heard it from a think-tank so it must be true" trap). I've researched the so-called lump of labor fallacy extensively and it has no business being in the textbooks or elsewhere in economic discourse as other than a historical curiousity. I would be glad to send you copies of one or both of my articles on the history and validity of the fallacy claim. One of them was published in 2000 in the book Working time: International trends, theory and policy perspectives, the other is under second-stage review by the Journal of Economic Issues. If after reading those articles, you remain convinced that the fallacy claim is genuine I would be delighted to debate you on the MaxSpeak blog. Below [above] is the text of the letter I sent to the editor of the IHT:
THE LUMP OF LAFFER REVELATIONMeet Ruth Lea.
In "It's time to break the Government's web of tax fallacies" (Daily Telegraph, Feb 20), Ruth Lea links up the hoary claim about a lump-of-labor fallacy with the... umm... proposition that tax cuts are April showers that inexorably bring the May flowers of enhanced revenues. But I'll let Ruth explain:
One of economists' favourite conceits is the "lump of labour fallacy", which is rooted in the proposition that there is a fixed amount of work to be done in an economy - a "lump" of labour - which can be shared out in different ways to create fewer or more jobs.
If, goes the argument, people worked 10% fewer hours then employers would have to hire more employees and unemployment would shrink.
The notion was behind the French "35-hour week" in a vain attempt to curb unemployment. The proposition is "fallacious" because, quite simply, dynamic economies do not respond like this.
Shorter hours mean higher unit costs (unless there are pay cuts), which undermine competitiveness and growth potential. This, in turn, can reduce the demand for labour and lead to higher unemployment.
May I suggest there are two fallacies of similar ilk that beset the current debate over taxation and public spending? (cont.)
No, Ruth, may I suggest that you are spouting made-up, boilerplate, right-wing balderdash.
Please feel welcome to send letters to the Telegraph editor at: email@example.com
Send your letter in plain text in the body of the message, not as an attachment. Include your name, address and telephone number or your letter won't be considered for publication. It is also best to include the article's title and date in the subject line: "It's time to break the Government's web of tax fallacies: Feb. 20."
You might want to also mention that you heard about it on MaxSpeak and send a copy of your letter to Ruth Lea, firstname.lastname@example.org. My epistle to the Telegraph:
Around ten years, I first heard the claim of a so-called lump-of-labour fallacy and puzzled over its seeming incoherence. Six years ago, I decided to respond to the claim, which required that I first investigate its history and classic formulation. What I found out is that the fallacy claim is clap-trap -- a sheer piece of made-up, boilerplate, right-wing balderdash. My findings (more moderately phrased, of course) were published as "The 'lump-of-labor' case against work-sharing: Populist fallacy or marginalist throwback?" in a chapter in Working Time: International trends, theory and policy perspectives (Routledge, 2000).
In her view in today's Telegram, Ruth Lea spouts the hoary platitudes about policies for reduced working time being based on a belief in a fixed amount of work. This is simply a lie and a most tiresome and pernicious one. It is indeed a Sisyphusian effort responding to the ceaseless and ignorant promulgation of one of the "economists' favourite conceits," as Lea termed it. Perhaps someday people will come to realize how much damage has been done by the spread of this falsehood and from that point on will never again listen to the promulgators.
#1 - 725 Salsbury Dr.
Vancouver, BC V5L 4A1
604 255-4812 (daytime and evening)
RUTH LEA KNOWS SHE'S SPOUTING HOGWASH!Dear Mr Walker
Of course I know the "lump of labour fallacy" is hogwash. I actually state that it's fallacious. Please read the article more carefully before you go blasting off to the Telegraph!
Dear Ms. Lea,
Thank you so much for your response to my message. I am afraid, however, that you have read my letter entirely too hastily and are mistaken. I am saying that your claim that reduced worktime policies are based on a fallacious belief in a lump of labour is hogwash. You do indeed imply that you know the claim is hogwash by calling the lump-of-labour fallacy "one of economists' favorite conceits" -- which would be to say the "fallacy" is an affectation of economists, not a true reflection of the beliefs of people who propose reduced worktime policies -- but I'm sure that seeming admission was inadvertent.
Your confusion no doubt arises from the awkward, archaic terminology of the so-called fallacy, so I will rephrase the matter in plain, contemporary English. You say that the French 35-hour work week was based on the notion that there is a fixed amount of work. That is wrong. The French policy was not based on any such notion. This is not to say that there may not have been some supporters who made the error, or that each and every slogan painstakingly pointed out that the amount of work was not fixed. It is simply to say that the economists who developed the policy were not a bunch of ignoramuses, as your claim would suggest.
Again, I would offer to send you a copy of my recent article and/or my article from 2000 detailing what is wrong with the fallacy claim (please note the word "claim"). Or, if you prefer, you may download them from the following URLs:
The 'Lump of Labor' Case against Work-sharing: Populist fallacy or Marginalist throwback? (2000)
Why Economists Dislike a Lump of Labor (2006)
LUMP WATCH: THOSE FRENCH SURE HAVE THEIR GAUL!It's official. Bear shits in woods. Sandwichman knew this was coming -- surprised only that it took all of two weeks or so for the proverbial lump-of-textbook-legend fatuity to appear. The troubles in France can be traced to the French populace's unshakeable belief in an idea that cannot withstand a nanosecond of thought, that there's only so much work to go round.
Cookie-cutter "libertarian" think-tank clone Allister Heath asks the perennial question, Is France ungovernable? He finds the redoubtable lump at the heart of the matter:
"At the heart of the French protests is a refusal to acknowledge economic reality.... Given their idiosyncratic ideology, it is little surprise that most French voters dont want to have anything to do with even modest free-market reforms. They appear to believe in the lump of labour fallacy that there is only a given amount of work to be done, that the government must share it around by restricting working hours, and keep out competition from overseas by erecting trade barriers. This view has also badly damaged the work ethic."
Silly French! If only they had faith-based faith, along with Cal Thomas, that "Capitalism — with its associated free market — will [solve their problems]."
Never mind the fact that "there is no relationship between the amount of employment protection in different countries and their unemployment rate." Say what? Mark Weisbrot inconveniently points out that there is no empirical support for the idea that job protection for workers is incompatible with low unemployment. This is not to say that the French job contract system couldn't be improved. Only that the rationale for the current reforms is full of baloney (as is the claim of a lump of labor fallacy). But as I say, never mind facts. "Economic reality" is not about facts; it's about faith in capitalism. But even more than that it's about blind faith in what the hired-help free-market snake-oil salesmen say about capitalism.
Meanwhile, Rick Wolff over at MRzine wonders if the French student-worker alliance "will mature into a movement for an alternative to capitalism."
Deputy Editor, The Business
Thank you so much for restoring my faith in the predictability of knee-jerk, right-wing libertarian politico-economic commentary. The "lump-of-labour fallacy" -- har-har-har, hardy-har-har!
Do you have any idea that the "lump-of-labour fallacy" canard is bullshit? Probably not. It a piece of time-tested textbook lore and that's good enough for the likes of you who think that if it confirms your initial prejudices, it's just got to be true. It's bullshit. B-U-L-L-S-H-I-T, bullshit. What reasonable person would believe that the amount of work to be done is fixed, that there's "only so much work to go round"? Obviously, no reasonable person would believe that, therefore (so the textbook argument goes) no reasonable person could believe that reducing the hours of work could possibly create jobs.
There are just two problems with the textbook argument. It comes from nobody in particular and it is explained by too many mutually-exclusive rationales. In fact, I have shown that the lump-of-labour fallacy claim is a pastiche of various bits and pieces of jargon and argument that don't ultimately add up to the claim that is ritualistically made in its name.
The charge that the French believe in a lump-of-labour fallacy is intellectually-lazy name calling that arises because you either don't have the evidence or don't know enough about the issues to make the case for your argument. I would be so grateful to you if you could validate the claim of a lump-of-labour fallacy. I've offered a CASH PRIZE of $5,000 (Canadian) in the past and no one has taken me up on it yet. All you would have to do is first, prove that it is not possible, under any circumstances, to create jobs through a policy of reducing the hours of work and second, prove that your argument is consistent with a previously published statement of the so-called lump-of-labour fallacy that you can verify as authoritative.
I should point out that the preceding cannot be done and I will elaborate on just one reason why it cannot. If the existing hours of work are excessive from the standpoint of physiological or psychological fatigue, reducing the hours of work is a "technological improvement" that can, ceteris paribus, result in an increase in total output. "Ah-ha!" You may say. "If total output is increased by shorter hours that means that the same output could be produced with fewer workers and therefore shorter hours would destroy rather than create jobs!" But if you do say that you have fallen into a trap, because of the conviction that "technology creates more jobs than it destroys," which is, of course, the basis (or, at least, one of the bases) of the observation that there is NOT a fixed amount of work.
Now, either you are consistent in your avowal of the assertion of a non-fixed amount of work or you may wish to argue that "under certain circumstances" the rule doesn't apply. There are further arguments dealing with those special circumstances that I will pass over for the time being. Suffice it to say that it would be a most remarkable achievement -- tantamount to squaring the circle or turning lead to gold -- if you were to validate the lump-of-labour fallacy claim. It would be worth a great deal more than my modest $5,000 prize, let me assure you. May I caution, though, that mere repetition does not constitute validation. Simply saying that Paul Samuelson or Richard Layard put it in a book it doesn't make it so.
AKA the Sandwichman
LUMP WATCH: THOSE FRENCH SURE HAVE THEIR COLBERTIAN GAUL!Boris Johnson is Conservative MP for Henley. According to Mr. Johnson, the French lump of labour is "Colbertian", which is to say mercantalist (in France, by the way, the lump-of-labor fallacy is sometimes referred to as le malthusianisme). In today's Telegraph, Johnson wrote:
At last someone at the top of French government has rejected the Colbertian lump of labour fallacy, the idea that there will be more work to go round if you restrict the amount that each person does, an economic misconception that has turned potentially productive French workers into lumps of inertia.
Last May, Mr. Johnson wrote in the Telegraph:
The reason the French have massive and chronic unemployment is that they are governed by an élite still gripped by a demented belief in the Colbertian lump-of-labour fallacy. They have excessive taxation, regulation and bureaucracy, and the last thing the French (or anyone) need is more detailed prescriptions from Brussels about the labour market or anything else.
Meanwhile, his Wikipedia entry describes Mr. Johnson as is a "self-centred pompous twit" who "cultivates an image as an eccentric, straw-haired fop, disorganised and scatty..."
''It would be unfair to say it looks as if he dresses at a charity shop, because no charity shop would accept stuff in that condition.'' (Simon Hoggart, The Guardian).
BC PROGRESS BOARD ENDORSES by the Sandwichman
WORK LESS PLATFORM!
Vancouver, BC -- A discussion paper issued by the BC Progress Board has called for substantially more time off work for British Columbians. Well, not quite. The Progress Board's report didn't actually mention reducing the hours of work. But it did prominently feature a key statistic that, on closer inspection, trumpets the benefits of the Work Less Party platform.
The Progress Board, a quasi-independent advisory group set up in 2001 by British Columbia Premier Gordon Campbell, lamented the fact that Canada's productivity ranking among 24 OECD countries had fallen from 5th place in 1970 to 17th in 2004. What they failed to mention, though, is the reason for that low ranking. Fifteen of the countries ranked ahead of Canada work substantially fewer hours per year. And in the 14 European countries with a significant productivity edge, workers averaged 245 hours -- or roughly six weeks -- less per year than Canadians.
The Work Less Party has produced a reply to the BC Progress Board productivity report that calls for a broader dialogue on productivity -- a dialogue based on understanding, rather than overlooking, the role of leisure as a prime contributing factor to productivity.
Read the Work Less Party's Reply to the BC Progress Board's discussion paper on productivity.
ONLY SO MUCH CAKE by the Sandwichman
TO GO ROUND
Yesterday, Sandwichman and his entourage delivered a home-baked devil's food cake inscribed "WORK LESS" to the office of the BC Progress Board as a token of gratitude for their tacit endorsement of the Work Less platform. Very tacit. Video will be posted in good time.
The cake motif might bear some explication. In April of last year, BC Business magazine published an article that profiled the Work Less Party platform. Sarah Efron, author of the piece, also interviewed the opposition. Thus appeared a quote from Jock Finlayson, executive vice president of the British Columbia Business Council, "Tom Walker is a passionate advocate of the idea that you can have your cake and eat it too." Upon reading the quote, I fervently clutched the magazine to my breast and exclaimed, "I am! I am! I am!"
LUMP = LOAF = CAKE
Jock and I go back a ways. We debated each other on radio and in print. It was from reading Jock's op-ed piece ten years ago that I first learned of the lump-of-labor fallacy claim. That's how we met, actually. I wrote to him to ask him to ask him to explain and to tell him it didn't make any sense. He graciously explained it to me. It still didn't make any sense.
Incidentally, Jock is also a member of the advisory group for the BC Progress Board. The executive director of the Board, Tim McEwan, used to work at the Business Council under Jock. Small world.
So while I was getting ready to head downtown to present the cake, it occurred to me that "you can't have your cake and eat it too" is a zero-sum claim. It assumes that there is a fixed amount of cake. The lump-of-labor fallacy is also about a zero-sum assumption, that there is a fixed amount of work.
To make things abundantly clear, Jock Finlayson says that advocates of shorter work time are wrong because they assume there is only a fixed amount of work but they are also wrong because they don't assume there is a fixed amount of "cake" -- with cake presumably serving as a metaphor for income + leisure.
This brings me back to my argument, that leisure is a factor of production and that it is simply wrong to treat leisure as a "normal good" such that the sum of income and leisure is a constant. In fact, when the current hours of work are "too long" (an empirical matter that can only be determined by experience) increasing the amount of leisure will increase the value of the total. In the extreme case, it could even increase the income too. Or, to put it more simply, you can have your cake and eat it, too. This is not to say you can always have it -- it is still an empirical question whether the given hours of work are "too long" but that at least is the implication of Chapman's theory.
ONE MORE SLICE?
John Maynard Keynes also discussed cake at length in his Economic Consequences of the Peace:
"The immense accumulations of fixed capital which, to the great benefit of mankind, were built up during the half century before the war [World War I], could never have come about in a Society where wealth was divided equitably. The railways of the world, which that age built as a monument to posterity, were, not less than the Pyramids of Egypt, the work of labor which was not free to consume in immediate enjoyment the full equivalent of its efforts.
"Thus this remarkable system depended for its growth on a double bluff or deception. On the one hand the laboring classes accepted from ignorance or powerlessness, or were compelled, persuaded, or cajoled by custom, convention, authority, and the well-established order of Society into accepting, a situation in which they could call their own very little of the cake that they and Nature and the capitalists were co-operating to produce. And on the other hand the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice. The duty of "saving" became nine-tenths of virtue and the growth of the cake the object of true religion. There grew round the non-consumption of the cake all those instincts of puritanism which in other ages has withdrawn itself from the world and has neglected the arts of production as well as those of enjoyment. And so the cake increased; but to what end was not clearly contemplated. Individuals would be exhorted not so much to abstain as to defer, and to cultivate the pleasures of security and anticipation. Saving was for old age or for your children; but this was only in theory,—the virtue of the cake was that it was never to be consumed, neither by you nor by your children after you.
"In writing thus I do not necessarily disparage the practices of that generation. In the unconscious recesses of its being Society knew what it was about. The cake was really very small in proportion to the appetites of consumption, and no one, if it were shared all round, would be much the better off by the cutting of it. Society was working not for the small pleasures of today but for the future security and improvement of the race,—in fact for "progress." If only the cake were not cut but was allowed to grow in the geometrical proportion predicted by Malthus of population, but not less true of compound interest, perhaps a day might come when there would at last be enough to go round, and when posterity could enter into the enjoyment of our labors. In that day overwork, overcrowding, and underfeeding would have come to an end, and men, secure of the comforts and necessities of the body, could proceed to the nobler exercises of their faculties. One geometrical ratio might cancel another, and the nineteenth century was able to forget the fertility of the species in a contemplation of the dizzy virtues of compound interest.
"There were two pitfalls in this prospect: lest, population still outstripping accumulation, our self-denials promote not happiness but numbers; and lest the cake be after all consumed, prematurely, in war, the consumer of all such hopes.
"But these thoughts lead too far from my present purpose. I seek only to point out that the principle of accumulation based on inequality was a vital part of the pre-war order of Society and of progress as we then understood it, and to emphasize that this principle depended on unstable psychological conditions, which it may be impossible to recreate. It was not natural for a population, of whom so few enjoyed the comforts of life, to accumulate so hugely. The war has disclosed the possibility of consumption to all and the vanity of abstinence to many. Thus the bluff is discovered; the laboring classes may be no longer willing to forego so largely, and the capitalist classes, no longer confident of the future, may seek to enjoy more fully their liberties of consumption so long as they last, and thus precipitate the hour of their confiscation."