Tuesday, July 31, 2012

The Lumpire Strikes Back!

"And you just arbitrarily publish email exchanges w/ people you don't know? I'll remember that. What exactly is your beef w/ me? If you wrote clearly, maybe I could follow."

(Apparently, she forgot.)

Excuse me? Who arbitrarily publishes mind-reading declarations about the presumed beliefs or assumptions of people you don't know, haven't met and whose analyses you haven't read?

My beef is not with you, Ms. Baum, but with a false allegation that you wittingly or unwittingly propagate.
The slew of recent articles on the deleterious effect of productivity suggests the ``lump-of-labor'' fallacy is due for a revival. This fallacy assumes there is a fixed amount of work to be done in an economy, to be divided up among the total supply of laborers. If machines do the work, there's less for people to do, resulting in higher unemployment.

No doubt this fallacy was behind France's romance with the 35-hour workweek. It also repeatedly fuels protectionist sentiment: the desire to protect domestic industries, via tariffs and quotas, from foreign competition.
As for the clarity (or otherwise) of my writing, the usual remedy for perceived incomprehension or misunderstanding is to engage in a conversation BEFORE one leaps to the conclusion that one's correspondent is solely responsible for the difficulty. You mentioned difficulty 'sorting through' or 'following' (3x) my argument in all but one of your emails and I tried to respond to your feedback (while maintaining a discrete silence about what might have appeared to me to be willful incomprehension). The exception was your AHA! moment in which you wrote, "I think I get it now" proclaiming that the arguments about shipping jobs overseas, automation etc. SUGGEST that people who make those arguments believe in a lump of labor. That's a circular argument, Ms. Baum. It assumes its own conclusion as its premise: "People who argue that assume there's a lump of labor because arguing that suggests they assume there's a lump of labor!" When you are thinking in circles it is awfully hard to follow someone who is not thinking in those same circles. My sympathies.

Off-shoring and automation DO eliminate jobs -- that's what they are SUPPOSED to do. Similarly, if a credit and speculation-fueled housing boom comes to an end, construction jobs will be eliminated. If those jobs aren't replaced with new and presumably different jobs, people will be unemployed. Simple. There's no need for people anxious about unemployment to assume that the amount of work to be done is "fixed." There just has to be less job creation going on than there is job destruction plus new entrants into the labor market -- as in the present situation.

So anyway, thank you for responding to my provocative posting of our email exchange. I'll gladly take down my unauthorized publication of our email exchange if you will retract your unauthorized publication of the spurious lump-of-labor mind reading exercise.

Cheers,

Tom

How to Explain Red Herrings to a Bloomberg Columnist

"Tom - thanks for the long note. I've having trouble sorting through your argument on the fallacy on the fallacy. Can you send me what you wrote so I can read?"

Hi Caroline,

I'm attaching a copy of my 2007 Review of Social Economy article, "Why Economists Dislike a Lump of Labor," the text of my 2000 article "The 'lump of labor' case against work-sharing: populist fallacy or marginalist throwback?" and a more recent piece I wrote for the new economics foundation in the U.K. that contains some of my more recent research and seeks to set out the argument step by step. At it's core, my argument is simply that the "fixed amount of work" is a figment of the imagination of the economists who invoke the fallacy, not a belief of those who are accused of committing it. There is no evidence for the latter nor is there any "logical necessity" that establishes it.

Cheers,

Tom

"I found it very hard to follow your email. So a fixed amount of work IS a fallacy but the economists who tout it believe the amount is fixed? Is that what you are saying?"

Caroline,

A fixed amount of work WOULD BE a fallacy if someone actually believed it. The economists who tout the fallacy claim make a false accusation that advocates of shorter work time, etc. believe in a fixed amount of work. The accusation is a red herring and is the source of all the confusion that follows. It is a "when did you stop beating your wife?" type of rhetorical construction that covertly presents a spurious allegation as an undisputed 'truth' and then shields that primary allegation behind a secondary screen: "that belief is a fallacy," "you have (or haven't) stopped beating your wife."

That secondary claim is irrelevant and is a distraction. Why would it matter that belief in a fixed amount of work is a fallacy if no one believed there was a fixed amount of work or even if such a belief, though false, was itself inessential to the broader policy issue?

Tom

6:56 AM: "Sorry. I can't follow your explanation. I'm on deadline. I'll look at your work later this week. Thx."


6:57 AM: "I think I get it now. People do believe it b/c their arguments about shipping jobs overseas, automation, etc. Suggest that they do. Obama's comment on ATM machines. The labor unions believe it. So I guess I don't agree w/ you that no one believes it. Obama's "made in America" is another example."

(to 6:57 AM) You got it, Tinkerbell. If YOU believe strongly enough that other people believe something, that makes it true! Clap louder!

(to 6:56 AM) Yes, dear, it is hard to follow explanations that don't confirm your biases. No need to bother "looking at" my work later this week. There's nothing in there that confirms what you already think you know and are determined to keep believing no matter what.

(Caroline Baum bills herself as "a Bloomberg View columnist, writing about the macro-economy and the intersection beween [sic] politics and economics. My specialty is exposing economic nonsense.")

Monday, July 30, 2012

Old Lumps Never Die... They Just Fly Away

Sometimes I stumble across recitations of the lump of labor catechism that I missed at the time. Here's one whose untimeliness has become timely by the juxtaposition of the 2003 Bloomberg column to an advertisement for a current Bloomberg feature: "Lump-of-Labour Fallacy Gussied Up for a New Era" and "Flying Robots"!


Ms. Baum bills herself on twitter as "a Bloomberg View columnist, writing about the macro-economy and the intersection beween [sic] politics and economics. My specialty is exposing economic nonsense." The unintentional ambiguity of the last claim is refreshingly frank. So I wrote to Madam Baum (and her editor):
Dear Caroline Baum,

Your twitter profile says that you write about the "intersection beween politics and economics." Obviously that should read "between." But that's not why I'm writing. Your profile also states that your "specialty is exposing economic nonsense." Way back in 2003 you wrote about the lump-of-labor fallacy being "gussied up for a new era." Well, here's an opportunity to expose some economic nonsense, provided you can admit being misled in the past.

A few years before Bloomberg published your column, my first article on the history of the fallacy claim was published by Routledge in an anthology edited by Lonnie Golden and Deb Figart, Working Time: International trends, theory and policy perspectives. Seven years later, the Review of Social Economy published my second academic article dealing with the history and substance of the fallacy claim. Since then I've continued archival research and have finally traced the claim down to a 1780 pamphlet by a Lancashire magistrate named Dorning Rasbotham. To make a long story short, the argument has always been a bait and switch, red herring, straw man argument. But to make that short story longer, it is fascinating to trace through history the imaginative and varied ad hoc "explanations" that expositors of the fallacy have appended to the ubiquitous but utterly fictional "belief in a fixed amount of work."

Anxieties about unemployment may be founded or unfounded but in either case they have nothing to do with an erroneous belief that the amount of work to be done is fixed in the long run. In fact, the fallacy claim (that is, the claim that the fallacy exists, not the alleged fallacy) has been refuted repeatedly by economists -- to no avail. Many more economists have recited by rote the fallacy claim without once addressing or even acknowledging the challenges to the fallacy claim's authority.

Having watched my research on the history of the fallacy claim similarly ignored by economists and columnists alike, I have taken to building robot economist puppets of the worthies who recite the bogus claim as if it were gospel. My current rogues' gallery of robot economists includes Paul Samuelson, Paul Krugman, Richard Layard, Jonathan Portes, Lawrence Katz, David Autor, Ryan Avent, Matthew Bishop and Clive Crook (the last three being columnists for The Economist magazine). I've posted short videos of the puppets dancing and chanting their fallacy claims at http://ecologicalheadstand.blogspot.ca/2012/07/thoughts-and-dreams-about-machines-new.html

Cheers,

Tom Walker

The challenge, of course, will now be to construct a Flying Robot Baum (reminds me of the flying monkeys from The Wizard of Oz). I suppose just replacing the arms with wings should do it.

Meanwhile, at the "George W. Bush Institute," Ike Brannon (Growth Fellow at the G.W.B. Institute and Director of Economic Policy and Congressional Relations at the American Action Forum) denounced, "Luddites, Lumps of Labor, and a Laundry List of Illogic" back in May. As Brannon confessed, "The hackneyed trope of a lazy columnist is to take down someone else’s column, but alas, that is precisely what my column will do." Lazy columnist and hack that he is, Dr. Brannon didn't bother to actually know anything about the lump of labor fallacy claim he invoked. Being even lazier that Dr. Brannon, I'm confident it is enough to mention that he is a "Growth Fellow at the George W. Bush Institute" to refute whatever the fucking moron might have to say. Sounds like a affectionate nickname for somebody's malignant tumor: "I went to the clinic the other day for a colonoscopy and was relieved they didn't find a 'growth fellow'."

Friday, July 27, 2012

Thoughts and Dreams about Machines: The New Robot Economist Pop-up Theatre


In his Machine Dreams: Economics Becomes a Cyborg Science (2002), Philip Mirowski "dragooned" a short story by Steven Millhauser, "The New Automaton Theater" to serve as a metaphorical outline of his his own book.
[Millhauser] imagines a town where the artful creation of lifelike miniature automata has been carried far beyond the original ambitions of Vaucanson's Duck or even Deep Blue -- the machine that defeated Gary Kasparov. These automata are not 'just' toys, but have become the repositories of meaning for the inhabitants of the town:
So pronounced is our devotion, which some call an obsession, that common wisdom distinguishes four separate phases. In childhood we are said to be attracted by the color and movement of these little creatures, in adolescence by the intricate clockwork mechanisms that give them the illusion of life, in adulthood by the truth and beauty of the dramas they enact, and in old age by the timeless perfection of an art that lifts us above the cares of mortality and gives meaning to our lives... No one ever outgrows the automaton theatre.
Every so often in the history of the town there would appear a genius who excels at the art, capturing shades of human emotion never before inscribed in mechanism. Millhauser relates the story of one Heinrich Graum, who rapidly surpasses all others in the construction and staging of automata. Graum erects a Zaubertheatre where works of the most exquisite intricacies and uncanny intensity are displayed, which rival the masterpieces of the ages. In his early career Graum glided from one triumph to the next; but it was "as if his creatures strained at the very limits of the human, without leaving the human altogether; and the intensity of his figures seemed to promise some final vision, which we awaited with longing, and a little dread".

And then, at age thirty-six and without warning, Graum disbanded his Zaubertheatre and closed his workshop, embarking on a decade of total silence. Disappointment over this abrupt mute reproach eventually gave way to fascinations with other distractions and other artists in the town, although the memory of the old Zaubertheatre sometimes haunted apprentices and aesthetes alike. Life went on, and other stars of the Automata Theatre garnished attention and praise. Then after a long hiatus, and again without warning, Graum announced he would open a Neues Zaubertheatre in the town. The townsfolk had no clue what to expect from such an equally abrupt reappearance of a genius who had for all intents and purposes been relegated to history. The first performance of the Neues Zaubertheatre was a scandal, or as Millhauser puts it, "a knife flashed in the face of our art". Passionate disputes broke out over the seemliness or the legitimacy of such a new automaton theatre.
Those who do not share our love of the automaton theatre may find our passions difficult to understand; but for us it was as if everything had suddenly been thrown into question. Even we who have been won over are disturbed by these performances, which trouble us like forbidden pleasures, secret crimes... In one stroke his Neues Zaubertheatre stood history on its head. The new automatons can only be described as clumsy. By this I mean that the smoothness of motion so characteristic of our classic figures has been replaced by the jerky abrupt motions of amateur automatons.... They do not strike us as human. Indeed it must be said that the new automatons strike us first of all as automatons... In the classic automaton theatre we are asked to share the emotions of human beings, whom in reality we know to be miniature automatons. In the new automaton theatre we are asked to share the emotions of the automatons themselves... They live lives that are parallel to ours, but are not to be confused with ours. Their struggles are clockwork struggles, their suffering is the suffering of automatons.
Although the townsfolk publicly rushed to denounce the new theatre, over time they found themselves growing impatient and distracted with the older mimetic art. Many experience tortured ambivalence as they sneak off to view the latest production of the Neues Zaubertheatre. What was once an affront imperceptibly became a point of universal reference. The new theatre slowly and inexorably insinuates itself into the very consciousness of the town.

It has become a standard practice in modern academic books to provide the impatient modern reader with a quick outline of the argument of the entire book in the first chapter, providing the analogue of fast food for the marketplace of ideas. Here, Millhauser's story can be dragooned for that purpose. In sum, the story of this book is the story of the New Automaton Theatre: the town is the American profession of academic economics, the classic automaton theatre is neoclassical economic theory, and the Neues Zaubertheatre is the introduction of the cyborg sciences into economics. And Heinrich Graum -- well, Graum is John von Neumann. The only thing missing from Millhauser's parable would a proviso where the military would have acted to fund and manage the apprenticeships and workshops of the masters of automata, and Graum's revival stage-managed at their behest.
The Sandwichman is always curious to find out what happens if one takes a metaphor such as Mirowski's a little too literally. What if we think of academic economics as literally an automaton theatre? And what if, instead of confining our fable to the academic economics of the 20th century, we extend the scope back to the pioneering episodes of integrating thoughts on the use of machines into the analysis of political economy? This idle curiosity impelled me to build crude pantin puppets depicting as robots Paul Samuelson, Paul Krugman, Richard Layard, Lawrence Katz, David Autor, Jonathan Portes and three current or former Economist magazine contributors, Matthew Bishop, Ryan Avent and Clive Crook.

After I made the physical puppets, I video recorded them. My rirst reaction to the results was disappointment. The videos were jerky and limited in their movement. I can get a better effect with still photos and photo manipulation on the computer. But I've come to realize that 'clumsiness' and 'jerkiness' were precisely the characteristics of the automatons in the fictional Heinrich Graum's Neues Zaubertheatre. One might even say that there is a element of Brechtian alienation or estrangement about it (as there is in the fictional Neues Zaubertheatre) although I'm not really sure that is necessary at a time such ss this when estrangement, rather than empathy, has become the default.



It is important to keep in mind that the word "robot" was adapted by Karel Capek from a Slavic word for chore, "robota" and it earlier referred to the forced labor required of serfs by the land-owning aristocracy. That is to say, the word has embedded in it an implication of exploitation and class struggle. A 19th century account of the practice observed:
Another evil of the robot is the ill-will it begets between the masters and the workmen: their whole lives seem to be a constant effort, on the one hand, to see how much can be pressed out of the reluctant peasant; and, on the other, how little can be done to satisfy the terms of agreement, and escape punishment. Mutual injury becomes a mutual profit; suspicion and ill-will are the natural results.
That constant effort found its echo throughout the 19th century -- and beyond -- in the chronic complaints of employers and business journalists about 'shirking' and the restriction of output by union regulations.

Addendum: Oh, I almost forgot. There's another source that figures heavily in my imagining of these jerky robots: Walter Benjamin's "Some Motifs in Baudelaire." In it, Benjamin mentioned the photographer Nadar's description of Baudelaire's "jerky gait." Later in the essay, Benjamin wrote, "The invention of the match around the middle of the nineteenth century brought forth a number of innovations which have one thing in common: one abrupt movement of the hand triggers a process of many steps." He then goes on to list the telephone and the camera as examples of the principle. "Thus technology has subjected the human sensorium to a complex kind of training. [...] That which determines the rhythm of production on a conveyor belt is the basis of the rhythm of reception in the film." And further down the page, citing Marx, "Every kind of capitalist production... has this in common, that it is not the workman that employs the instruments of labour, but the instruments of labour that employ the workman. But it is only in the factory system that this inversion for the first time acquires technical and palpable reality." "In working with machines," Benjamin continued, "workers learn to coordinate their own 'movements to the uniform and unceasing motion of an automaton'."

Benjamin concluded this line of speculation with some observations on the connection between factory work, commercial amusements and unemployment:
The unskilled worker is the one most deeply degraded by the drill of the machines. His work has been sealed off from experience; practice counts for nothing there. What the fun fair achieves with its dodgem cars and other similar amusements is noting but a taste of the drill to which the unskilled labourer is subjected in the factory -- a sample which at times was for him the entire menu; for the art of being a clown, in which the little man could acquire training in places like the fun fair, flourished concomitantly with unemployment.

Tuesday, July 24, 2012

A Cheap Market Will Always Be Full of Customers

Arthur David [Schloss] Waley
The Way that can be told of is not an Unvarying Way;

The names that can be named are not unvarying names.

It was from the Nameless that Heaven and Earth sprang;

The named is but the mother that rears the ten thousand creatures, each after its kind.


Truly, “Only he that rids himself forever of desire can see the Secret Essences”;

He that has never rid himself of desire can see only the Outcomes.

These two things issued from the same mould, but nevertheless are different in name.

This “same mould” we can but call the Mystery,

Or rather the “Darker than any Mystery,”

The Doorway whence issued all Secret Essences.
-- Tao Te Ching, Chapter One, translated by Arthur Waley
Arthur Waley -- who was Arthur Schloss until the outbreak of World War I led him to adopt his maternal grandfather's "non-alien" surname -- was the son of David F. Schloss, author of Methods of Industrial Remuneration, who, in 1891 coined the whimsical expression, the "Theory of the Lump of Labour."

Waley was a prolific translator of classical and historical Chinese and Japanese texts, including the Tao Te Ching and The Analects of Confucius. He translated the third saying of Book II of the Analects as:
Govern the people by regulations, keep order among them by chastisements, and they will flee from you, and lose all self-respect. Govern them by moral force, keep order by ritual and they will keep their self-respect and come to you of their own accord.
As Peter K. Yu explained, "Under the Confucian tradition, the Chinese lived by the concept of li (rites), rather than the concept of fa (law). While li covered a whole range of political, social, and familial relationships that encompassed a harmonious Confucian society, fa represented penal laws that were associated with punishment and the maintenance of public order." Waling discussed the meaning and role of ritual at length in his introduction to the Analects, observing:
Anthropologists are or were in the habit of trying to discover the 'real reasons' why particular injunctions or prohibitions were imposed among primitives. If the reason given by the people themselves seemed to them trivial or unintelligible they set it down as a rationalization or, alternatively, attributed it to secretiveness regarding the "real reason."

The truth, however, is that there is no 'real reason' for ritual acts. In any community where the performance of such acts is linked to a general system of thought, they will be explained in terms of that system. If the system changes, as frequently happen, without disturbing the ritual acts, they will be reinterpreted in terms of the new system.
I like that. No 'real reason' for ritual acts. They are just something that people keep doing. There is no doubt some intrinsic pleasure, satisfaction or relief that comes from the ritual acts' tautological appropriateness. One feels one has done the "right" thing when one has done the rite thing!

Waling's paraphrase of the first chapter of the Tao indicates a similar concern to Confucius with the inability of codified law -- accompanied by appropriate rewards and punishments assigned to deeds beneficial or harmful to the State -- to fully grasp the essences of things. "The Realist," he explained, "...sees only the 'ultimate results'... never the essences themselves."

In his 1891 article, "Why Working Men Dislike Piece Work," Arthur Waling's father, David F. Schloss, reported a conversation with a laborer making washers on piece work. "I know I am doing wrong," Schloss quotes him. "I am taking away the work of another man. But I have permission from the Society." It was to those italicized passages that Schloss assigned the name, "the Theory of the Lump of Labour."

But recall the Tao Te Ching admonition about "names that can be named are not unvarying names." The remarkable thing about the laborer referred to by Schloss is that he was working in violation of, not in conformity to, the dictates of his supposed theory and, furthermore, he had permission from his union to do so. This unnamed washer-boring workman has the distinction of being one of the very few individuals whose spoken words (whether authentic or apocryphal) have been cited in evidence of a belief in the alleged lump-of-labour theory. By contrast, Tom Mann, a prominent agitator for the eight-hour day, "looked for the absorption of the unemployed by the distribution of work; while disclaiming the fallacy that there is only a fixed amount of work to be done."

In fact, disclaiming the alleged fallacy had been honed to a fine edge decades before Schloss coined the quaint 'lump-of-labour' sobriquet. The transactions of a miners' conference held at Leeds in 1863 contained an introductory report that astutely mocked the hypocrisy of political economists and employers who, on the one hand, decried the "ignorance and folly" of those who would attempt to regulate grievously long hours, which were supposedly the "infallible and inevitable result of demand and supply" while "constantly telling the men that wages must be reduced in consequence of over-supply [of labor]." Meanwhile, the coal-owners themselves maintained restrictions on the production of coal -- known as "the limitation of the vend" -- from 1771 to 1845.

"Unvarying" is the supposed quantity of labor to be performed, allegedly assumed by the typically anonymous offender against the fallacy taboo.
At the bottom of these contrivances for artificially increasing the amount of employment, there seems to lurk the fallacy of supposing that the labour required to be done in any department of trade, or in the country generally, is a fixed quantity; therefore, in order to secure an aliquot portion of it to the greatest number, the labour must be spread out thin. The teaching of sound Political Economy is directly the reverse of this.
wrote the author of an article on Trades Unions in the Edinburgh Review of 1867.
The League is only an offshoot of the Unions... Their theory is that the amount of work to be done is a fixed quantity, and that in the interest of the operatives, it is necessary to spread it thin in order to make it go far.
wrote the London correspondent to the New York Times in 1871.
The root of the mania which has had such a disastrous effect on the material prosperity of the country, and, above all, of the working classes, is the idea that the amount of work to be done is a fixed quantity, quite independent of any efforts which may be made to encourage and stimulate demand, and that, therefore, the best course is to spread it thin in order to make it go as far as possible.
is how the author of an article in The Saturday Review of Politics, Literature, Science and Art put it in 1876.

"These people think that the amount of work to be done is a fixed quantity." "If we are to proceed on the assumption that the amount of work to be done is a fixed quantity..." "The theory of the Lump of Labour will be seen to rest upon the utterly untenable supposition that a fixed amount of work exists." "But there is not, as this argument assumes, a fixed Work-Fund, a certain amount of work which has to be done, whatever the price of labour." "The Leaders of the Federation said that there was a certain amount of work to be done in Atlantis..." "The notion is that there is exactly so much labor predetermined to be done; therefore, if machines are introduced, there is that much less for men to do..." "This means, roughly speaking, that there is a certain total number of hours of work to be done each week." "This view -- that the amount of work to be done is fixed -- is called the lump-of-labor fallacy." "Very similar to the general overproduction fallacy is the erroneous belief that there is only a certain amount of work in the community to be done..."

"At the bottom of these contrivances..."

"We have touched the fallacy which lies at the bottom of this whole system..."

"The real question which lies at the bottom of the dispute..."

"The root of the mania..."

Getting to the bottom of the fallacy claim took 15 years of patient, persistent inquiry. The economists who pedantically recite the fallacy claim and insist upon its authority know nothing of its origins (or, for that matter, its subsequent career)! The lump-of-labour label was a late Victorian addendum that alluded impishly to the colloquial term for a kind of labor sub-contracting, "lump work," which explicitly specified the amount of work to be done as a fixed quantity. Henry Mayhew chronicled the practice in his mid-century reportage on "London Labour and the London Poor":
It is this contract or lump work which constitutes the great evil of the carpenter's, as well as of many other trades; and as in those crafts, so in this, we find that the lower the wages are reduced the greater becomes the number of trading operatives or middlemen...

"Lump" work, "piece" work, work by "the job," are all portions of the contract system. The principle is the same. "Here is this work to be done, what will you undertake to do it for?"
So, if lump work was by definition "a fixed amount of work to be done" from whence does the "fallacy" arise? The lump-of-labour and its antecedent, lump work, turn out to be blind alleys. The origin of the fallacy claim had to do with the introduction of machinery rather than with piece-work or working time (not to mention immigration or early retirement). Dorning Rasbotham, a magistrate in the county of Lancashire, England, published a pamphlet, "Thoughts on the Use of Machines in the Cotton Manufacture," in 1780 in response to rioting that had occurred the previous year near Blackburn. In it, on page 18, occurs what appears to be the seminal instance of the fallacy claim, expressed in words unmistakably paraphrased by the now standard "fixed amount of work to be done":
Dorning Rasbotham, Esq.
"There is, say they, a certain quantity of labour to be performed. This used to be performed by hands, without machines, or with very little help from them. But if now machines perform a larger share than before, suppose one fourth part, so many hands as are necessary to work that fourth part, will be thrown out of work, or suffer in their wages. The principle itself is false. There is not a precise limited quantity of labour, beyond which there is no demand. Trade is not hemmed in by great walls, beyond which it cannot go. By bringing our goods cheaper and better to market, we open new markets, we get new customers, we encrease the quantity of labour necessary to supply these, and thus we are encouraged to push on, in hope of still new advantages. A cheap market will always be full of customers. Men will cross land and sea to go thither."
Although virtually forgotten today, Rasbotham's pamphlet was well-enough known in the early 19th century for his views to have been cited with admiration by John R. M'Culloch in an 1827 Edinburgh Review article on the cotton industry:
Dorning Rasbotham, Esq., a magistrate near Bolton, printed some time about the period referred to, a sensible address to the weavers and spinners, in which he endeavoured to convince them that it was for their interest to encourage inventions for abridging labour. The result has shown the soundness of Mr Rasbotham's opinion.... There is, in fact, no idea so groundless and absurd, as that which supposes that an increased facility of production can under any circumstances be injurious to the labourers.
Unlike David Schloss's account, more than a century later, of a conversation with a workman who subscribed to the Theory of the Lump of Labour, Rasbotham's pamphlet presented no indication of who "they" were who allegedly said there was "a certain quantity of labour to be performed." But it would be rash to judge his argument solely on this singular lack of evidence. Indeed, a careful reading of the pamphlet reveals this supposedly "sensible address to the weavers and spinners" to be a smug, patronizing exercise in diminishing the actual grievances of the working population while extolling the abstract virtues of trade and technology detached from the circumstances of their employment by the rich. The author who on the first page styles himself "from the bottom of my heart, a Friend to the Poor," concludes his peroration berating his erstwhile "friends" for their improvidence and their propensity to "carry their money to the Alehouse" rather than seize the burgeoning opportunities for self improvement. The real core of Squire Rasbotham's argument, though, occurs in the fourth of seven enumerated principles:
It is the use of Machines, which chiefly distinguishes men in society from men in a savage state. Some have thought it no bad description of a human being, that he is a tool-making, or a machine-making animal. What are the most common instruments or furniture of our houses, but machines to shorten labour? What is an ax, a hammer, a saw, a pair of bellows, but machines for this end? [...] If we must go upon the principle of having no machines, we must pull them all down, and bruise our corn in Mortars. -- What do I say? The Mortar and Pestle are machines for shortening labour. We mull crush our corn between two stones, or beat out the flour with sticks.
It is just such a disquisition as this Marx had in mind in the section in volume one of Capital titled, "The Theory of Compensation as Regards the Workpeople Displaced by Machinery," where he presented his parody of Bill Sikes, the villain from Oliver Twist, addressing the jury:
Gentlemen of the jury, no doubt the throat of this commercial traveler has been cut. But that is not my fault; it is the fault of the knife! Must we, for such a temporary inconvenience, abolish the use of the knife? Only consider! Where would agriculture and trade be without the knife? Is it not as beneficial in surgery as it is in anatomy? And in addition a willing help at the festive table? If you abolish the knife — you hurl us back into the depths of barbarism.
Marx's point, of course, was that it was not the machines that threw people out of work, any more than it was the knife that cut the throat of the traveling salesman. It was how the machines were used by those who owned them that threw people out of work. Similarly, the argument advanced by M'Culloch, James Mill, Robert Torrens, Nassau Senior and John Stuart Mill -- that "all machinery that displaces workmen, simultaneously and necessarily sets free an amount of capital adequate to employ the same identical workmen" -- was groundless. Instead,
The labourers that are thrown out of work in any branch of industry, can no doubt seek for employment in some other branch. If they find it, and thus renew the bond between them and the means of subsistence, this takes place only by the intermediary of a new and additional capital that is seeking investment; not at all by the intermediary of the capital that formerly employed them and was afterwards converted into machinery.
Note that Marx's specification of the necessity of "new and additional capital" is not at all the same thing as assuming that there is a fixed amount of work to be done. There is more work to be done; but whether or not it is done depends on additional investment. As Keynes phrased it some 60 years later, the economic system is not "self-adjusting" as assumed by "almost the whole body of organized economic thinking and doctrine of the last hundred years."

This self-adjusting, automatically-compensating for displacement doctrine made a notable appearance in William Stanley Jevons's speculations regarding The Coal Question and thus has implications for contemporary debates about energy consumption, conservation and climate change. Jevons maintained that, "It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth [emphasis in original]." He went on to explain:
William Stanley Jevons
As a rule, new modes of economy will lead to an increase of consumption according to a principle recognised in many parallel instances. The economy of labour effected by the introduction of new machinery throws labourers out of employment for the moment. But such is the increased demand for the cheapened products, that eventually the sphere of employment is greatly widened. Often the very labourers whose labour is saved find their more efficient labour more demanded than before.
If we are to subscribe to Marx's and Keynes's refutation of the self-adjusting, compensation principle, the 'good news' is that increasing energy efficiency doesn't necessarily lead to increased consumption, as the Jevons Paradox or 'rebound effect' implies. The bad news, though, is that it also doesn't apply to employment and whatever we might do to expand overall employment may increase the consumption of energy. This new dilemma may seem thornier than the Jevons Paradox itself unless we realize that it only applies to a conventionally codified conception of employment.

Sunday, July 22, 2012

There's No Way Like the American Way!

Eleven years after re-affirming its unyielding antagonism toward shorter working time...
FLIP

...the National Association of Manufacturers took credit for "The World's Shortest Working Hours."

FLOP

Friday, July 6, 2012

'Kick-starting the Recovery': An Open Letter to Jonathan Portes, Part II

Below is my response to Jonathan Portes's reply to my open letter of June 23. Jonathan Portes's reply to my first letter is reproduced with permission.

Wednesday, July 4, 2012

"Why Americans should work less – the way Germans do" --Dean Baker

Dean Baker in The Guardian, July 3:

"There is a solution to unemployment: if we worked the same shorter hours as Germany, we'd eliminate joblessness overnight"

Nobel Laureate Paul Krugman and Richard Layard, a distinguished British economist, took the lead last week in drafting a sign-on "Manifesto for Economic Common Sense", condemning the turn toward austerity in many countries. This manifesto seems destined to garner tens or even hundreds of thousands of signatures, including mine.

While the basic logic of the manifesto is solid, there is an important aspect to the argument that is overlooked. We can deal with unemployment every bit as effectively by having people work fewer hours, as we can by increasing demand.

See also Re: The Krugman-Layard "Manifesto for Economic Sense"