Friday, December 31, 2010

Party Poopers

Ethics? To god-damned hell with ethics! Economists have no ethics. In fact, Economists don't need ethics. Economists don't have to show you any stinking ethics, you god-damned cabrĂ³n and ching' tu madre! Come out from that shit-hole of yours. I have to speak to you.

Cognitive Dissonance

We had to destroy the village in order to defend it. When you're losing your mind, it's important to keep your wits.

The fallacy claim is one of those prosaic homilies about the inexorable working out of an optimum through the price mechanism and the futility of policy intervention, which will inevitably result in a sub-optimal outcome. Dude thinks that price fixing will obviate the need to fix prices.

Sandwichman doesn't give investment advice. Sell Atlantic Asset Management! However, if he did give advice...

Thursday, December 30, 2010

Combinations Murder and the Primordial Lump

On the 22nd of July 1837, at about ten o'clock in the evening in Glasgow, Scotland, John Smith, a native of Ireland and a cotton spinner by trade, left home accompanied by his wife. They went to a shop at the head of Clyde Street where they got some tea and then to a second shop where they bought oatmeal. They then proceeded down Clyde Street.

Opposite Marshall's wood-yard, Smith was shot from behind, under the right shoulder. The bullet severed the spinal chord and lodged in the first dorsal vertebra. At the moment of being struck, he called out that he was shot, fell forward on the street and became insensible of what was going on around him.

Wednesday, December 29, 2010

Brad DeLong confesses he finds it hard to know what to do with this...

Chris Bertram at Crooked Timber discussed Sandwichman's claim posted at National Geographic that the Jevons Paradox and the lump-of-labor fallacy are homologous. Brad DeLong expressed his bewilderment.

My advice to Brad: Read my manuscript. Critique it. Disparage it. Revile it. Whatever. But first, read it.

Facts or Fallacies? Part II: In which Paul Krugman takes his lumps and eats them too while Jamie Galbraith runs afoul of the notorious lump-of-labor fallacy-fallacy

In comments at Angry Bear in response Part I, it was suggested that Paul Krugman has also made the lump-of-labor fallacy claim and that perhaps I should be talking about his arguments (or those of Paul Samuelson) instead of those of conservative think-tankers. Both of those liberal Keynesian economists have indeed advanced the fallacy claim. I would love to discuss the matter with Professor Krugman and sent him an invitation.

Meanwhile, indulge me while I rehearse my debating points on some archival material. I'd also like to bring in a few big names on my side: James K. Galbraith, Dean Baker and… Paul Krugman! Just to even things out, the pre-recession Krugman gets Bruce Bartlett and Larry Summers on his tag team.

Tuesday, December 28, 2010

"Clogging up the pipes, as it were"


Visit msnbc.com for breaking news, world news, and news about the 
economy
Transcript:
>>and when we're at a time when there's so many people in their 50s who are unemployed and may not be able to get back into the job -- the job market, I mean, it's unlikely to happen, but wouldn't it be a good idea to actually lower the eligibility for social security retirement?

>>It might be, Sam. In fact, a lot of people right now are saying that the eligibility age for social security retirement given the depth of our continuing jobs recession -- and this jobs recession does continue -- maybe should be lowered so that you create openings for younger people coming into the job market who right now don't have a chance because there are so many older people clogging up the pipes, as it were.

Rebound Redux

The Jevons Paradox is a special case of Jean-Baptiste Say’s Law of Markets, a cherished version of which has it that “Every labor-saving device creates in general as many, oftentimes more, jobs than it destroys…” You can’t “reject” Jevons without also repudiating Say. They’re joined at the hip.

So will that reduced carbon footprint also be “jobless”? There is a way out of the dilemma, but it involves investigating the relationship between the Jevons Paradox and Say’s Law, not cherry-picking the parts you like and the parts you don’t. I discuss this relationship in Chapter 1 of Jobs, Liberty and the Bottom Line.

See also What “lump of energy” fallacy? at Crooked Timber

Monday, December 27, 2010

Facts or Fallacies? Part I: BLS Data v. the Zombie Lump-of-Labor Fallacy-Fallacy

In the third quarter of 2010 real GDP in the U.S. was 21 percent higher than it had been in the fourth quarter of 1999. Labor force participation grew during the same period by 9 percent, an increase of nearly 14 million people. However, between December 1999 and September 2010, total non-farm employment fell by just over 200,000.

Here is what Bill McBride at Calculated Risk ("Older Workers and the Lump of Labor Fallacy") thinks is supposed to happen:

Friday, December 24, 2010

The Best Way to Create Jobs

CUT THE WORK WEEK

By EUGENE P. COYLE

We have been trained to think of unemployment and stagnant pay as a shortage of jobs. That fits the neoliberal sales message of endless growth and expansion. If we think of our problem as shortage of jobs and stagnant wages, the policy is always stimulus, more production, more consumption, more growth. In short, the treadmill the economy has been on for years. The stimulus is a high-energy drink to get us back on the treadmill. But if we think of the problem as a surplus of workers instead of a shortage of jobs, then a third tool beyond monetary and fiscal policy emerges – cutting the workweek. From that good things unfold...

Wednesday, December 22, 2010

Older Workers and the PHONY Lump of Labor Fallacy

Dear Bill McBride,

Thank you for bringing up the so-called "lump-of-labor fallacy" in your Calculated Risk blog post,"Older Workers and the Lump of Labor Fallacy. I think this is an important topic because it brings to light one of the most dogmatically held and utterly baseless convictions of conventional economists -- that anyone who doesn't assume a self-propelled, perpetually-expanding economy is guilty of some bizarre "fallacy". Of course, to be consistent economists would also have to accuse advocates of any "job creation" strategy whatsoever of the fallacy. After all, the amount of work to be done isn't fixed! In some mythological long run the demand for labor is determined solely by its supply. But consistency isn't the strong suit of lump-of-labor fallacy claimants.

Monday, December 20, 2010

"Full Employment" appears to be an abbreviation for "full employment after the war"


The Realm of Freedom

"The realm of freedom actually begins only where labour which is determined by necessity and mundane considerations ceases; thus in the very nature of things it lies beyond the sphere of actual material production. Just as the savage must wrestle with Nature to satisfy his wants, to maintain and reproduce life, so must civilized man, and he must do so in all social formations and under all possible modes of production. With his development this realm of physical necessity expands as a result of his wants; but, at the same time, the forces of production which satisfy these wants also increase. Freedom in this field can only consist in socialized man, the associated producers, rationally regulating their interchange with Nature, bringing it under their common control, instead of being ruled by it as by the blind forces of Nature; and achieving this with the least expenditure of energy and under conditions most favourable to, and worthy of, their human nature. But it nonetheless still remains a realm of necessity. Beyond it begins that development of human energy which is an end in itself, the true realm of freedom, which, however, can blossom forth only with the realm of necessity as its basis. The shortening of the working day is its basic prerequisite. (Marx, Capital, Volume III, 1971, 820)"

Friday, December 17, 2010

Nobody Reads Anyway

blah blah Ginger blah blah blah blah blah blah blah Ginger blah blah blah blah blah...

Wednesday, December 15, 2010

"Alex_c" Lectures Sandwichman on What Marx Was Really Trying to Say

If your analysis is correct, that it is not 'private ownership per se' but an ethos that flows from it that is the problem then this changes a great deal of Marxist theory! But I think that if you read the Paris Manuscripts (The Economic and Philosophic Manuscripts) more closely you will see that you can certainly be loosely included in the piecemeal would-be radical reformers; I will leave it to you to find what Marx has to say about these reformers.

Friday, December 10, 2010

Elevator Pitch

The final passage of "Time on the Ledger":

In 1866, the Congress of the International Working Men's Association, meeting in Geneva resolved that, "the limitation of the working-day is a preliminary condition without which all further attempts at improvement and emancipation must prove abortive…" Karl Marx drafted the resolution. The language is unequivocal: in the absence of the effective regulation of working time all attempts at improvement must fail.

Forty-three years later, Sydney J. Chapman, a neoclassical economist, star pupil of Alfred Marshall and future chief economic adviser to the British government wrote, "The ideal working day of the future cannot be eight hours, for it must be essentially a progressive ideal. As a community advances, agitation for shorter hours will be constantly breaking out anew."

A new outbreak of agitation for shorter hours is long overdue.

Saturday, December 4, 2010

Confession and Bookkeeping

The Religious, Moral and Rhetorical Roots of Modern Accounting, James Aho, State University of New York Press, 2005.

Socialism Is Dead! Long Live Social Accounting!

Werner Sombart described the concept of capital as something that "did not exist before double-entry bookkeeping." "Capital," he wrote, "can be defined as that amount of wealth which is used in making profits and which enters into the accounts." Rob Bryer has written of a capitalist "mentality" that consists of using accounting information to control the labor process "by holding the collective worker accountable for the rate of return on capital." Such control by the bottom line is central, not incidental, to both the domination of the labor process by capital and the evolution of the ways that domination has been implemented through successive forms of technology. Any alternative to that domination requires the development of a counter-mentality that "turns the capitalist development of calculation and accountability to other ends."

Friday, December 3, 2010

The Long Term Problem of Full Employment

John Maynard Who?

"As the third phase comes into sight; the problem stressed by Sir H. Henderson begins to be pressing. It becomes necessary to encourage wise consumption and discourage saving,-and to absorb some part of the unwanted surplus by increased leisure, more holidays (which are a wonderfully good way of getting rid of money) and shorter hours."

Unemployment Rises to 9.8%: Not to Worry, AFL-CIO Has a "STRATEGY"

Child as he was, he was desperate with hunger, and reckless with misery. He rose from the table; and advancing to the master, basin and spoon in hand, said, somewhat alarmed at his own temerity, —