The Principal of Hertford College, Oxford is a Dunce!

In an interview published today in the Financial Times, Guardian columnist and Hertford College principal, Will Hutton says, "Essentially there needs to be much greater interpenetration of both higher education and the corporate world. It is a knowledge economy and universities are the linchpins of the knowledge economy." (Hopefully, that interpenetration will be eased by generous lubrication.)

Mr. Hutton also says:

I don’t share the "lump of labour" fallacy that an economy has a finite number of hours’ work. Economists – whether they are monetarists, Keynesians, rightwing or leftwing – will tell you that that is a fallacious doctrine. Work has to satiate human wants that are infinite. The question is how you create a surplus to satisfy those wants.

Is it true or even conceivable that there is not a finite amount of work? Inadvertently, Mr. Hutton has hit on the fundamental absurdity of the fallacy claim. The usual rejoinder is that the amount of work is not fixed, but the idea of infinite human wants is common. And it is muddle-headed cant.

Silly as the notion is, whether human wants are infinite or not is irrelevant. What matters is the ability of someone to pay to satisfy those wants. The demand for work is thus limited by the availability of credit. You can pay for work with goods and services or you can pay for it with (credible) promises. But if you can't pay for it, it's not paid work.

Credit can expand indefinitely (indeterminately). But its "infinite" expansion is a proposition for which we have no evidence. Despite their sharing many letters, "infinite" and "indefinite" have different meanings. All previous credit expansions have reached a limit. All of them.

Should it not be a feature of a "knowledge economy" that a college principal would know the difference between infinite and indefinite, and between fixed and finite?