A long post, but one which contains a lot of information, which I promise to be rewarding for the diligent reader. Phil Hyde wrote, >I'm off tracking down the Technocrats at the moment. They wanted 4 day >workweek, 4 hrs a day, long vacation. Me: That'd be M. King Hubbert, I've got a pamphlet by him by him called "Man hours and production" I believe. It's a very interesting analysis. Hubbert was an oil geologist who used a similar analysis to project (in 1948!) that U.S oil production would peak around 1970 and soon after begin an inexorable decline. It did, and that's why the 1973 OPEC oil price hikes were so effective. The same analysis now projects that world oil production will peak sometime between 2010 and 2020. When that happens, no amount of bombing Baghdad will bring back cheap oil. Phil: >I left a query about the lump of labour locus classicus on Samuelson's phone >machine at MIT - he's the only main econ principles text that still mentions >lump of labor and he's still got an office at MIT so I'll hound him after >the hols. Me: I had a look at a re-issue of Samuelson's original 1948 edition of Economics and his treatment of LoL there was much more subdued than in later editions. It would be interesting to trace the evolution of LoL strictly within the successive editions of Samuelson! Speaking of textbooks, I'd also like to have a look at the 1952 _The Economic Process: Its Principles and Problems_ by Raymond T. Bye, William W. Hewett. A review article mentions that they present an exposition of the fallacy on pp. 380-383. Richard Lester's 1941 textbook, _Economics of Labor_, reportedly contains a defence of the traditional trade union position. Phil: >Plus I'm minoring in marginalism. I think a lot of our problem and potential >solution is in that theory. I think it's been applied very selectively to, as >you point out about Marshall, justify the status quo, and yet it's very Me: Thorstein Veblen wrote an apposite essay on the limitations of marginalism in 1909. Veblen was a major influence on Technocracy. I'll send you an electronic copy. I would venture to say that much of what presents itself today as "neo-classical" or "marginalist" is simply classical political economy dogma using marginalist rules as a strategic debating weapon -- they only apply to the other guy. The supply-side orthodoxy of the last 20 years is a wholesale reversion to the doctrines of J.R. McCulloch that Charles Dickens satirized in Hard Times. I don't know if Milton Friedman acknowledges McCulloch as the source for the title of his book "Free to Choose" but there it is, Friedman's entire argument as well as the exact phrase itself in a 1826 Treatise on the Rate of Wages and the Condition of the Labouring Classes: McCulloch: "But whenever property is secure, industry free, and the public burdens moderate, the happiness or misery of the labouring classes depends almost wholly on themselves. Government has there done for them all that it should, and all in truth that it can do. It has given them security and freedom. But the use or abuse of these inestimable advantages is their own affair. They may be either provident or improvident, industrious or idle; and being FREE TO CHOOSE, they are alone responsible for the consequences of their choice.[emphasis added]" Me: The appearance of the words "free" and "freedom" in the above paragraph needs a bit of explanation. It means, explicitly, free from the interference of combinations of workers. Phil: >It's interesting you found the phrase 'lump of labor' in Clark. I don't see >it in Commons or Ely in a qik check of their indexes. But it's the kind of >thing that might not have shown up in the index at first. Me: No, it's not the kind of thing that ordinarily shows up in indexes. Clark's book doesn't have an index. Phil: >Amasa (love that!) Walker - any relation? Me: That's _Francis_ Amasa Walker (no relation) Francis' father, Amasa, was also an economist. I've gotten ahold of F.A. Walker's essay on the Eight-Hour Law Agitation in the 1890 Atlantic Monthly and he presents a very similar argument to Rae's. Phil: > I sense the >locus classicus is the kind of thing we're going to stumble across sometime >and give a holler - "Wait a minute, this is IT!" Me: I dunno. I think I've hollered that more than a few times already during this quest. My hypothesis is, roughly, that there are two modern definitions of the "lump of labour fallacy", both of which originate from sources that didn't use the term "lump of labour". Those two definitions are mutually contradictory and internally inconsistent. Meanwhile the term itself has a more eclectic and paradoxical historical usage. The modern definitions I would trace from the Walker/Rae/Marshall arguments related to marginal productivity and from Frederick Taylor's scientific management. A trio of 1891 articles by D.F. Schloss on the "sweating system" may hold the key to the cross over of the term from "the lump" (casual workers, following Henry Mayhew's 1851 usage) to a "lump of labour". The sense of the lump of labour I get from Schloss's usage is sort of an aggregate term for 'a fair day's work for a fair day's wages'. Because of holiday closing, I haven't yet had a chance to look at the most promising Schoss essay, in the 1891 Economic Review, but here's a brief citation that led me to it: A reviewer: "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." Me: I have looked at another article by Schloss describing the "sweating system" and I found a usage by him of "the lump of labour" in a third essay on "The Jew as Workman": Schloss: "Apart from the question of the number of hours that the Jew -- when under the stern compulsion of hunger -- can work without killing himself, does the Jew, when under no such compulsion, seek to grab more than his just share of 'the lump of labour'? Does he, in fact, voluntarily choose to do a great deal more than a fair day's work? This is, obviously, a question partly of pace, partly of hours. That the Jewish workman very strongly objects to being hustled over his work is certain." Me: Just to keep everything in one post, here's the 1911 Frederick Taylor, scientific managment version (refuted, I might add, by Frank Tracy Carleton in a 1912 article), followed by the "marginalist" (or semi-marginalist) strivings of Rae, Marshall and Walker. At the very end, some lines from Sidney Webb summing up these strenuous efforts at finding a fallacy: Taylor: ". . .The fallacy, which has from time immemorial been almost universal among workmen, that a material increase in the output of each man or each machine in the trade would result in the end in throwing a large number of men out of work. ". . . The great majority of workmen still believe that if they were to work at their best speed they would be doing a great injustice to the whole trade by throwing a lot of men out of work, and yet the history of the development of each trade shows that each improvement, whether it be the invention of a new machine or the introduction of a better method, which results in increasing the productive capacity of the men in the trade and cheapening the costs, instead of throwing men out of work make in the end work for more men. ". . .Under this fallacious idea a large proportion of the workmen of both countries each day deliberately work slowly so as to curtail the output. Almost every labor union has made, or is contemplating making, rules which have for their object. curtailing the output of their members, and those men who have the greatest influence with the working-people, the labor leaders as well as many people with philanthropic feelings who are helping them, are daily spreading this fallacy and at the same time telling them that they are overworked." Francis A. Walker: "We now reach the third plea for a general eight-hour law, namely, that the effect would be to furnish employment to those who, under the existing system, cannot find a chance to work. This is, at present, the most popular and taking argument adduced in behalf of this measure. In order to give the argument greater effect, gross exaggeration is resorted to in stating the number habitually unemployed, which is sometimes placed as high as one fifth or one quarter of the laboring population. One writer speaks of the unemployed as 'the reserve army of industry.' "The fallacy of this argument lies it its assumption that the reason why a certain portion of the population cannot get work is because those who are employed work as long as they do, say ten hours a day. but what are these persons doing durning the ninth and tenth hour? Each of them is producing goods which are to become a part of the means of paying other laborers for their ninth and tenth hours of work. To prevent any man from working up to the limits of his strength is not to increase, but to diminish, the amount which is available for keeping others at work." [Me: in other words, Walker is invoking the "income" version of the old wages-fund doctrine] "Of course, if, by this pleas for a general eight hour law, it is merely intended to divide up a given amount of employment and a given sum of wages among a larger number of laborers, there is nothing to be said about it, except that it is a very good-natured proposal, and that its acceptance would indicate an unexpectedly large amount of benevolence on the part of the more fortunate members of the working class. But it is no such self-sacrificing measure which the labor champions propose to their followers. . ." Rae: "The eight hours day is usually preached both with most fervour and with most success as a gospel for the unemployed. No other argument has been so prominent or so influential in the present movement as the promise of mitigating and perhpas extinguishing that most unnatural of our social maladies, the unwilling idleness of willing hands. Nor is this any wonder, for what can be more captivating thant the hope of seeing that troublesome malady become as obsolete as the plague? and what can at first sight appear either a surer or an easier way of making work for the idle than cutting a few hours off the work of the busy? The work seems already found and nothing to remain but count in the men to do it. It is a simple sum in arithmetic. If 5,000,000 labourers do each twelve hours a week less work than they do now, how many supplementary labourers must you call in at 48 hours a week to supply the 60,000,000 hours' service which the original staff have ceased to render? . . ." "Now all this is entirely illusory. It stands in absolute contradiction to our now very abundent experience of the real effects of shortening the hours of labour, and it stands in absolute contradiction to the natural operation of economic forces to which it professes to appeal; and the illusion arises (1st) from simply not observing or apparently caring to observe the important alteration which the introduction of shorter hours itself exerts on the productive capacity of the workpeople; and (2nd) from yielding to the gross but evidently very seductive economic fallacy, which leads so many persons to think that they will all increase the wealth they individually enjoy by all diminishing the wealth they individually produce, and to look for a great absorption of the unemployed to flow from a general restriction of production, the very thing which in reality would have the opposite effect of reducing the demand for labour, and throwing multitudes more out of employ." [Me: Rae's "2nd" point, of course, disregards his "1st"] Marshall: "For instance, if tram workers and building operatives stint their labour artificially, tramway extensions will be checked; fewer men will be employed in making and working tramways; many workpeople and others will walk into town, who might have ridden; many will live closely packed in the cities who might have had gardens and fresher air in the suburbs; the working classes, among others, will be unable to pay for as good housing accommodation as they would otherwise have had; and there will be less building to be done. "In short the argument that wages can be raised permanently by stinting labour rest on the assumption that there is a permanent fixed work-fund, i.e. a certain amount of work which has to be done, whatever the price of labour. And for this assumption there is no foundation. On the contrary, the demand for work comes from the national dividend; that is, it comes from work. The less work there is of one kind, the less demand there is for work of other kinds; and if labour were scarce, fewer enterprises would be undertaken." Webb: "The economic effects of a general limitation of the hours of labour are, it must be admitted, by no means simple; and members of Parliament may not unreasonably complain that those 'chaplains of the middle class,' the University professors of political economy, have abandoned them to the Democratic wolf without any explicit teaching on the subject. Nor can the problem be safely decided off-hand, as is the fashion of the casual objector, ignorant alike of Longe and Thornton's demolition of the "wage-fund theory" and of the paradoxical result of Ricardo's "Law of Comparative Cost" in international trade. The problem is not merely one of wages or of product, but also one of profits, interest, the rate of accumulation, price, the limitation of demand, and international values." Me: To sum up, the problem revolves around the indeterminacy of the wage contract. The employer may purchase "hours" from the worker, but what the employer wants is not hours but output. In turn, what the worker has to sell is not output but the capacity to produce that output (or as Marx put it "labour power"). The laws of supply and demand are only operative if one assumes an identity between the commodity supplied and the commodity demanded. The "lump of labour" appears as a term like "a fair day's work for a fair day's wage" that acknowledges the indeterminacy and negotiability of waged work. To call the lump of labour a "fallacy" is simply the Gradgrind economists' way of saying that they find the fuzziness of a social norm offensive to their a priori notion of economics as a pure science of mathematical laws. The real fallacy is the a priori notion. Contrary to the orthodox dogma, the sun (working time) does NOT revolve around the earth (marginal productivity). The hard truth is that the relationship between employment and the hours of work is simply "too hard" (too indeterminate, too "fuzzy") 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, archaic and contradictory. Tom Walker http://www.vcn.bc.ca/timework/
