The leisure life of a lump of labor lie
Editor, the Wall Street Journal, In a bold effort to vaccinate Americans against the insidious lump-of-labor virus, the Wall Street Journal today carries an article by one Christopher Rhoads headlined, Europe's Prized Leisure Life Becomes Economic Obstacle. The analytical nub appears in a paragraph located almost midway through the piece: Enter the shorter working week. Unions argued that reduced hours would spur job growth by spreading the same amount of work among more people. Most economists dismissed the theory, but some argued it could force Europeans to become more efficient, squeezing more work into less time. Neither turned out to be true. What Mr. Rhoads neglects to inform his readers is that the preceding is a formulaic set piece, the prototype of which first appeared in an 1871 Quarterly Review article by Mr. J. Wilson entitled Economic Fallacies and Labour Utopias. The formula was perfected in a 1901 screed featured in the London Times under the headline, The Crisis in British Industry. From 1903 to 1913 -- when a congressional investigation brought their activities to light -- the National Association of Manufacturers spared no expense of political bribery, financial extortion and physical intimidation to inscribe the same message as the common sense consensus of all sane, sober, self-respecting economists everywhere. In short, Mr. Rhoads' paragraph is a hoary slander. What is more, if there can be such a thing as plagiarizing slander, the paragraph -- fraudulently represented as Mr. Rhoads' own observation of some recent argument about spreading the same amount of work and the subsequent dismissal of the theory by most economists -- is a plagiary. Although Rhoads discretely omits the tell-tale term, the drill often passes under the sobriquet of the lump-of-labor fallacy. It was a mainstay in Paul Samuelson's Economics through the 1950s, 1960s and 1970s even though the Nobel Prize winning textbook author has subsequently been unable to account for its source or validity. Speaking of fraud, why doesn't Mr. Rhoads write an article advocating accounting fraud as a boost to global competitiveness? Perhaps he could even crib a few passages in support of his case (sans acknowledgement, naturally) from The Protocols of the Elders of Zion. Tom Walker 604 254 0470
Re: The leisure life of a lump of labor lie
Please be a little less Zen. What is the lump of labor fallacy? Ok no one actually believed it; but what is it that no one actually believed. Tom Walker wrote: Editor, the Wall Street Journal, In a bold effort to vaccinate Americans against the insidious lump-of-labor virus, the Wall Street Journal today carries an article by one Christopher Rhoads headlined, Europe's Prized Leisure Life Becomes Economic Obstacle. The analytical nub appears in a paragraph located almost midway through the piece: Enter the shorter working week. Unions argued that reduced hours would spur job growth by spreading the same amount of work among more people. Most economists dismissed the theory, but some argued it could force Europeans to become more efficient, squeezing more work into less time. Neither turned out to be true. What Mr. Rhoads neglects to inform his readers is that the preceding is a formulaic set piece, the prototype of which first appeared in an 1871 Quarterly Review article by Mr. J. Wilson entitled Economic Fallacies and Labour Utopias. The formula was perfected in a 1901 screed featured in the London Times under the headline, The Crisis in British Industry. From 1903 to 1913 -- when a congressional investigation brought their activities to light -- the National Association of Manufacturers spared no expense of political bribery, financial extortion and physical intimidation to inscribe the same message as the common sense consensus of all sane, sober, self-respecting economists everywhere. In short, Mr. Rhoads' paragraph is a hoary slander. What is more, if there can be such a thing as plagiarizing slander, the paragraph -- fraudulently represented as Mr. Rhoads' own observation of some recent argument about spreading the same amount of work and the subsequent dismissal of the theory by most economists -- is a plagiary. Although Rhoads discretely omits the tell-tale term, the drill often passes under the sobriquet of the lump-of-labor fallacy. It was a mainstay in Paul Samuelson's Economics through the 1950s, 1960s and 1970s even though the Nobel Prize winning textbook author has subsequently been unable to account for its source or validity. Speaking of fraud, why doesn't Mr. Rhoads write an article advocating accounting fraud as a boost to global competitiveness? Perhaps he could even crib a few passages in support of his case (sans acknowledgement, naturally) from The Protocols of the Elders of Zion. Tom Walker 604 254 0470
Re: The leisure life of a lump of labor lie
At 02:16 PM 8/8/2002 -0700, Gar Lipow wrote: Please be a little less Zen. What is the lump of labor fallacy? Ok no one actually believed it; but what is it that no one actually believed. From P.A. Samuelson W.D. Nordhaus, ECONOMICS, 16th edition, Irwin McGraw-Hill, 1998, p. 239. The Lump-of-Labor Fallacy We close our analysis of wage theory by examining an important fallacy that often motivates labor market policies. Whenever unemployment is high, people often think that the solution lies in spreading existing work more evenly among the labor force. For example, Europe in the 1990s suffered extremely high unemployment, and many labor leaders and politicians suggested that the solution was to reduce the workweek so that the same number of hours would be worked by all the workers. This view -- that the amount of work to be done is fixed -- is called the lump-of-labor fallacy. To begin with, we note the grain of truth in this viewpoint. For a particular group of workers, with special skills and stuck in one region, a reduction in the demand for labor may indeed pose a threat to their incomes. If wages adjust slowly, these workers may face prolonged spells of unemployment. The lump-of-labor fallacy may look quite real to these workers. But from the point of view of the economy as a whole, the lump-of-labor argument implies that there is only so much remunerative work to be done, and this is indeed a fallacy. A careful examination of economic history in different countries shows that an increase in labor suply can be accommodated by higher employment, although that increase may require lower real wages. Similarly, a decrease in the demand for a particular kind of labor because of technological shifts in an industry can be adapted to -- lower relative wages and migration of labor and capital will eventually provide new jobs for the displaced workers. Work is not a lump that must be shared among the potential workers. Labor market adjustments can adapt to shifts in the supply and demand for labor through changes in the real wage and through migrations of labor and capital. Moreover, in the short run, when wages and prices are sticky, the adjustment process can be lubricated by appropriate macroeconomic policies.
