Nathan, As I was trying to caution you, the argument about productivity and employment is a subtle and evasive one. It is a question of evolving probabilities and relative outcomes, not mechanical certainties and absolutes. The hinge is the relationship between productivity and employment. It is not a question of "productivity destroys jobs" or "productivity creates jobs." Productivity both creates and destroys jobs and estimating the relative effects are a matter of "taste and experience," as Keynes put it. Or as Marx would say, it's dialectical. It's also historical and empirical.
Hypothetically, it would be possible to reduce the hours of work too much, resulting in productivity and total output losses that exceed the value of the leisure time created. That outcome is extremely unlikely in a society dominated by the political and economic views of the bourgeoisie (if you'll pardon the expression). Once you strip away the theoretically unsupportable "simplifying assumptions" and accounting conventions that tip the analytical scales against work time reduction there is no fundamental "economic" difference between reducing the hours of work or government spending on infrastructure or tax cuts or changes in interest rates. There are differences in who benefits and in the intensity of effects, with the latter factor mediated by diminishing returns to scale. The case for shorter working time NOW is based particularly on the fact that it has been essentially taboo as a policy option in North America for three-quarters of a century. That's a heck of a lot of backlog. When's the last time that tax cuts, infrastructure spending or lower interest rates have been employed? If, instead of assuming that the given hours of work were optimal for output and that individual labor supply was based on choice between income and leisure, we assumed that the current level of capital investment was optimal for output, we would arrive at the conclusion that an increase in investment, through government spending policy would only result in asset bubbles rather than sustainable job creation. The conclusion, that is to say, would be forthcoming from the premise. Your argument about a weak positive feedback loop for employment is based on ceteris paribus assumptions that INCORPORATE the conclusion of a weak positive feedback loop. You might as well be saying, "given a weak positive feedback loop, there will be a weak positive feedback loop." Well, duh. Now I can lead you to the history of the vitiating canonical assumptions of conventional economic analysis but I can't make you drink. These assumptions (income/leisure model, hours optimized by profit-seeking firm) are not even consistent with neoclassical, marginalist theory. They are add-ons to reconcile neoclassicism to the much older theodicy of self-adjusting economic systems insuring the best of all possible worlds and fundamental harmony of interests between rich and poor. They make the analysis more "tractable" because they neatly evade the "complications" of class struggle, indeterminacy and disequilibrium. On Wed, Dec 28, 2011 at 9:24 PM, nathan tankus < [email protected]> wrote: > Sandwichman said... > > "At the core of the case AGAINST shorter working time is the claim that it > is not needed because "increased productivity [technology, trade, > immigration, postponing retirement age, etc.] creates more jobs than it > destroys." The classic version of this was the 1701 anti-mercantilist > pamphlet, "Observations upon the East-India Trade." With regard > specifically to technology, the locus classicus is the 1780 pamphlet by > Dorning Rasbotham, "Thoughts on the Use of Machines in the Cotton > Manufacture." > > NT:that would be wrong. fortunately that wasn't my argument. my > argument is exactly the opposite. i argued that productivity increases > would be generated by cuts in the work week and those productivity > increases would lead be biased towards labor saving. > > SM:But you say that a large spike in productivity from reduced hours and an > increase in wages would mean "that not many more workers would be needed to > produce the same amount of output as before." > > Repeat the last seven words of that sentence: "the same amount of output as > before." Does that sound to you at all like "a fixed amount of work to be > done" or "a certain quantity of labor to be performed"? It does to me. That > means you are making a lump-of-labor assumption and the lump of labor is a > fallacy. > > NT: you are correct that i made a simplifying assumption. > > SM:What makes you think that the demand for output would remain unchanged > after a reduction in hours and an increase in wages? A Keynesian argument > could be made that the increase in wages would redistribute income to > people with a higher propensity to consume thus increasing aggregate > demand. > > NT: it's an increase in wages per hour and a simultaneous cut in hours > worked. barring an immense amount of extra overtime i don't see how > this would increase demand for output immensely. my entire argument is > that a large cut in hours worked would increase productivity, so that > not many more workers would be needed to meet the current demand for > output and thus the positive feedback loop would be weak. how would > these increases in wages paid per hour increase aggregate demand if > annual income for these workers is the same? > > SM: It is worth doing anyway. That is, aside from any job-creating > potential, reducing the hours of work from current levels will improve the > quality of life. > > NT: I said that exact same thing. In fact I think that the increase in > productivity is an extra reason to do it. > -- > -Nathan Tankus > > ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Sandwichman
_______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
