Perhaps the headline was more apt than the Economist intended. The 'lump of
labour fallacy' -- as used by the Economist -- is not one coherent fallacy
but an odd pair of mutually exclusive objections grafted together like the
head of a chimpanzee on the body of a man.
Half of that pair is based on a mid-nineteenth century laissez-faire
abstraction about employment expanding as long as there is unmet demand. The
other half is based on a mid-twentieth century empirical observation
regarding the high proportion of fixed labour costs.
The first half assumes free mobility for both labour and capital who --
needless to say -- are presumed to have perfect information about labour
markets. The second accepts a 1965 statistical snapshot of the U.S.A as an
eternal representation of economic "reality".
Taken separately, the two objections are easily dismissed as, respectively,
too abstract and entirely contingent. But the first half borrows
concreteness from the second and the second half borrows universality from
the first. Those two half-arguments are rhetorically stitched together by
the false claim that proponents of work sharing assume the amount of work
available is fixed.
Proponents of work sharing *don't* assume that the amount of work available
is fixed. We argue that when many people are unemployed and many others are
over worked, policies to redistribute work hours could be effective. It is
the Economist who insists on reducing the argument to absurdity.
But the the Economist's counter-argument -- its two-piece 'lump of labour
fallacy' -- IS patently absurd. The exposition of the fallacy depends on two
mutually exclusive propositions -- 1. that labour and capital are freely
mobile and 2. that labour costs are significantly fixed. A *fixed* labour
cost is self-evidently a constraint on the *mobility* of both labour and
capital. Not moving is the opposite of moving.
One might easily dismiss such illogic as the confused mutterings of a lone
cranky journalist were it not for the fact that the Economist has published
no less than seven articles since 1995 trumpeting this 'lump of labour
fallacy' rubbish. Not only do they repeat this stuff ad nauseum, they do so
with a tone of impatience at having to once again point out such a
presumably obvious truth of economics. The argument and the tone are widely
imitated. Well, it's not an obvious truth because it's simply not true --
it's not even coherent.
Regards,
Tom Walker
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