A ritual response to Jeremy Rifkin's argument about the end of work was to
accuse him of committing a supposed "lump-of-labor" fallacy that there is
only a given amount of work to be done and that if machines do the work
there will be less for people to do. The Economist magazine is especially
fond of invoking this fallacy and has done so seven times since 1995 in its
ongoing effort to discredit the "naive popular belief" that unemployment can
be reduced by redistributing work time.
I've wondered about this fallacy and my wondering has taken me on a search
for the origins of the story. I believe I've found the source and, perhaps
not surprisingly there is much less "economic science" there than has
commonly been supposed.
To make a long story short (I'm also writing the long story), there appears
to be not one but two modern versions of the lump-of-labor fallacy and they
are mutually exclusive. Furthermore, it is a misnomer to refer to either of
these versions as "the lump-of-labor fallacy" as the historical version was
more eclectic in its reference, not confined to the question of reducing and
redistributing the hours of work.
The two modern versions of the so-called fallacy appear to have descended,
respectively, from Frederick Winslow Taylor's 1911 _Scientific Management_
and from an 1890 Atlantic Monthly essay by Francis Amasa Walker on "The
Agitation for the Eight Hours Day" (the marginalist version). The core of
Walker's argument was echoed by John Rae in an 1892 essay in the
Contemporary Review and incorporated into Alfred Marshall's Principles of
Economics.
Far from establishing an incontrovertible fact of economic science, the two
modern versions that have survived were vigorously disputed in their own
day. The Taylorist version of the fallacy was disputed by Frank T. Carlton
in his 1911 _History and Problems of Organized Labor_ and the marginalist
version was disputed by Charles Beardsley in a 1895 article, "The effect of
an eight hours' day on wages and the unemployed" in the Quarterly Journal of
Economics. Carlton and Beardsley disputed the internal consistency of each
of the respective versions. To my knowledge, no one has previously called
attention to the existence of two distinct and incompatible versions of the
fallacy.
Although the definitions used by Taylor and by Walker/Rae/Marshall
correspond with modern definitions of the lump-of-labor fallacy, none of
them use the term lump-of-labor (although Carlton uses it in opposition to
Taylor). Usage of the term in the period of the late 19th century and early
20th century is not specific to the question of the hours of work. The
earliest reference I have found is in a 1891 essay by David Schloss on "Why
Working Men dislike Piece-work," published in The Economic Review.
I haven't had a chance to look at the Economic Review article yet, but here
is the citation of it I found in the Economic Journal for September, 1891:
"Mr. Schloss points out the difficulties that arise from the standard
adopted by employers, which is apt to be that of the best, and not of the
ordinary workmen, and from the greater mental strain which is experienced by
those employed on piece-work. He then deals with the 'Lump of Labour
Theory,' which he considers to lie at the root of all the difficulty."
So what?
The what is much larger than the coherence, integrity or validity of the
lump-of-labor fallacy, itself. The strange career of this purported fallacy
calls into question the coherence, integrity and validity of a mode of
economic argument -- neo-classical or marginalist -- whose practitioners
routinely and ritually resort to a non-existent fallacy to deflect questions
about the relationship between aggregate employment and the hours of work.
The truth is that the relationship between employment and the hours of work
is simply "too hard" for a marginalist analysis to grasp. Given the choice
between investigating a topic that exposes the limits of the marginalist
analysis and imposing an intellectual taboo on that topic, marginalism has
chosen the taboo. The so-called "lump-of-labor fallacy" amounts to a
monumental intellectual fraud perpetrated by textbook authors and editorial
writers who probably don't have the slightest suspicion that what they are
saying is groundless.
Tom Walker
http://www.vcn.bc.ca/timework/
