Tuesday, August 21, 2012

Here We Go Lumpty-Ludd...

Steve Roth has a post up at Angry Bear (cross posted at Asymptosis) taking issue with the Luddite fallacy fallacy:
"My basic conclusion: the Luddites were obviously wrong at the time. But they’re right now — at least in the U.S. Even a stopped clock is right eventually."
Not exactly the Sandwichman's position on the Ludd/Lump myth but adding to the push back against the monarchical fallacy claim.

Monday, August 20, 2012

The Incredible Shrinking Lump

Andrew McAfee wonders "If you have some faith that employment must keep rising as output does, please leave a comment and explain where it comes from."
So offshoring and globalization aren’t the real drivers here; domestic productivity growth is. American manufacturers have been figuring out how to produce ever-more stuff while employing ever-fewer people for a while now. Markoff’s article makes clear that this trend is far from played out.

Because of advances in sensors, software, chips, and the other components of robots, and because of lots of innovating and tinkering with them, the industries that deal with physical products — distribution, transportation, wholesaling, and so on — are about to become a lot more productive. My guess is that their output-vs.-employment graphs are going to start to look a lot like the manufacturing one above.

And because of similarly impressive advances in artificial intelligence, machine learning, crowdsourcing, and exploitation of Big Data, the same will in the near future be true of industries that deal with virtual products like knowledge, information, media, decisions, and communication. In many cases, their employment will start to trend downward even as their output rises over time.

I don’t know of any economic law that prevents this from happening. Yes, I’m aware of the “lump of labor fallacy.” But I think the more up-to-date fallacy is the assumption that a growing industry means that there will be more work for people to do, rather than for ever-more capable machines to do. The graph above shows that this has clearly not been the case for US manufacturing over the past 30 years.

In an era of astonishing technological progress, why won’t the same be true for other industries in the US and elsewhere? If you have some faith that employment must keep rising as output does, please leave a comment and explain where it comes from. Because the evidence, both past and present, is making me a skeptic.

My reply: Fantastic! As the only person I know of who has actually researched the history of the lump-of-labor fallacy and written a peer-reviewed, published scholarly article about it, I sincerely doubt you'll get any substantive responses to your request for an explanation. To use Hayden White's expression, the fallacy claim is essentially a "technique of ostensive self-definition by negation" practiced by "scholars and intellectuals seeking to establish their claims to elite status against the vulgus mobile." Or in plain English, it's bunkum.

Furthermore it's bunkum with a long pedigree, having originated in 1780 in a pamphlet by a Lancashire magistrate, Dorning Rasbotham, eager to demonstrate that the poor had nothing to complain about because "a cheap market will always be full of customers" and therefore new machines would swiftly and surely open up more jobs for displaced workers than they eliminated. Karl Marx called this supposed principle, "the theory of compensation as regards the workpeople displaced by machinery." John Maynard Keynes called it the belief that the economic system is self-adjusting." They both demonstrated that it doesn't work the way economic orthodoxy insists it should.

Sure, employment always increased in the past after the introduction of new machines but it was the expansion of credit that facilitated job growth, not cheap prices or low wages caused by the machines. And let's not forget that plenty of wars and depressions intervened along the way. The situation we face today is in some respects the result of the success of Keynesian and quasi-Keynesian policy in maintaining a remarkably long-term expansion of credit. Keynes never expected that expansion to go on forever, which is why he made provision in a 1943 memorandum, "The Long Term Problem of Full Employment" for a third phase of policy "when investment demand is so far saturated that it cannot be brought up to the indicated level of savings without embarking upon wasteful and unnecessary enterprises... 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."

What's the Penalty for Lying?

Ta-Nehisi Coates:
But one thing to keep in mind is there is no real penalty for respectable lying in our world of intellectual discourse..

Sunday, August 19, 2012

Dean Baker: "Robots Don't Cost Jobs, Bad Economic Policy Does"

Dean Baker responding to a piece in the New York Times that warns "The ascension of robots may mean fewer jobs are created...":
While one outcome of the introduction of this new technology could be the loss of jobs in the economy, that would be due to inept economic policy. What the article is describing is productivity growth. This is exactly what we should want. It allows us to be richer if we work the same number of hours or to be as rich and work fewer hours. We had very rapid productivity growth in the three decades following World War II. It did not lead to unemployment, but rather to rapidly rising living standards for the bulk of the population.

In the last three decades the government has pursued policies that have the effect of redistributing income upward so that the gains from growth are not broadly shared.
A comment by George Sai-Halasz in response to the same New York Times article:
Economist were way too slow to wake up to reality. They have been indoctrinated in the “lump of labor fallacy” fallacy. For people who were actually in the trenches working to create the computer power allowing today’s developments, like myself, the writing has long been visible on the wall. See my letter to the NYT of more than 19 years ago: http://www.nytimes.com/1993/02/28/business/l-don-t-cut-jobs-cut-working-hours-and-count-in-the-computer-effect-093093.html?partner=rssnyt&emc=rss

Strike Through the Pasteboard Mask!

Thus Hayden White in "The Forms of Wildness" (Tropics of Discourse, p. 151-52):
In times of sociocultural stress, when the need for positive self-definition asserts itself but no compelling criterion of self-identification appears, it is always possible to say something like: "I may not know the precise content of my own felt humanity, but I am most certainly not like that,'' and simply point to something in the landscape that is manifestly different from oneself. This might be called the technique of ostensive self-definition by negation, and it is certainly much more generally practiced in cultural polemic than any other form of definition, except perhaps a priori stipulations. It appears as a kind of reflex action in conflicts between nations, classes, and political parties, and is not unknown among scholars and intellectuals seeking to establish their claims to elite status against the vulgus mobile.

Wednesday, August 15, 2012

The Stump-of-Lubber Fallacy: Behind the Pasteboard Mask

[for paine...]
“Captain Ahab,” said Starbuck, who, with Stubb and Flask, had thus far been eyeing his superior with increasing surprise, but at last seemed struck with a thought which somewhat explained all the wonder. “Captain Ahab, I have heard of Moby Dick—but it was not Moby Dick that took off thy leg?”

“Who told thee that?” cried Ahab; then pausing, “Aye, Starbuck; aye, my hearties all round; it was Moby Dick that dismasted me; Moby Dick that brought me to this dead stump I stand on now. Aye, aye,” he shouted with a terrific, loud, animal sob, like that of a heart-stricken moose; “Aye, aye! it was that accursed white whale that razeed me; made a poor pegging lubber of me for ever and a day!” Then tossing both arms, with measureless imprecations he shouted out: “Aye, aye! and I’ll chase him round Good Hope, and round the Horn, and round the Norway Maelstrom, and round perdition’s flames before I give him up. And this is what ye have shipped for, men! to chase that white whale on both sides of land, and over all sides of earth, till he spouts black blood and rolls fin out. What say ye, men, will ye splice hands on it, now? I think ye do look brave.”

“Aye, aye!” shouted the harpooneers and seamen, running closer to the excited old man: “A sharp eye for the white whale; a sharp lance for Moby Dick!”

“God bless ye,” he seemed to half sob and half shout. “God bless ye, men. Steward! go draw the great measure of grog. But what’s this long face about, Mr. Starbuck; wilt thou not chase the white whale! art not game for Moby Dick?”

“I am game for his crooked jaw, and for the jaws of Death too, Captain Ahab, if it fairly comes in the way of the business we follow; but I came here to hunt whales, not my commander’s vengeance. How many barrels will thy vengeance yield thee even if thou gettest it, Captain Ahab? it will not fetch thee much in our Nantucket market.”

“Nantucket market! Hoot! But come closer, Starbuck; thou requirest a little lower layer. If money’s to be the measurer, man, and the accountants have computed their great counting-house the globe, by girdling it with guineas, one to every three parts of an inch; then, let me tell thee, that my vengeance will fetch a great premium here!”

“He smites his chest,” whispered Stubb, “what’s that for? methinks it rings most vast, but hollow.”

“Vengeance on a dumb brute!” cried Starbuck, “that simply smote thee from blindest instinct! Madness! To be enraged with a dumb thing, Captain Ahab, seems blasphemous.”

“Hark ye yet again—the little lower layer. All visible objects, man, are but as pasteboard masks. But in each event—in the living act, the undoubted deed—there, some unknown but still reasoning thing puts forth the mouldings of its features from behind the unreasoning mask. If man will strike, strike through the mask! How can the prisoner reach outside except by thrusting through the wall? To me, the white whale is that wall, shoved near to me. Sometimes I think there’s naught beyond. But ‘tis enough. He tasks me; he heaps me; I see in him outrageous strength, with an inscrutable malice sinewing it. That inscrutable thing is chiefly what I hate; and be the white whale agent, or be the white whale principal, I will wreak that hate upon him. Talk not to me of blasphemy, man; I’d strike the sun if it insulted me. For could the sun do that, then could I do the other; since there is ever a sort of fair play herein, jealousy presiding over all creations. But not my master, man, is even that fair play. Who’s over me? Truth hath no confines. Take off thine eye! more intolerable than fiends’ glarings is a doltish stare! So, so; thou reddenest and palest; my heat has melted thee to anger-glow. But look ye, Starbuck, what is said in heat, that thing unsays itself. There are men from whom warm words are small indignity. I meant not to incense thee. Let it go. Look! see yonder Turkish cheeks of spotted tawn—living, breathing pictures painted by the sun. The Pagan leopards—the unrecking and unworshipping things, that live; and seek, and give no reasons for the torrid life they feel! The crew, man, the crew! Are they not one and all with Ahab, in this matter of the whale? See Stubb! he laughs! See yonder Chilian! he snorts to think of it. Stand up amid the general hurricane, thy one tost sapling cannot, Starbuck! And what is it? Reckon it. ‘Tis but to help strike a fin; no wondrous feat for Starbuck. What is it more? From this one poor hunt, then, the best lance out of all Nantucket, surely he will not hang back, when every foremast-hand has clutched a whetstone. Ah! constrainings seize thee; I see! the billow lifts thee! Speak, but speak!—Aye, aye! thy silence, then, that voices thee. (Aside) Something shot from my dilated nostrils, he has inhaled it in his lungs. Starbuck now is mine; cannot oppose me now, without rebellion.”

“God keep me!—keep us all!” murmured Starbuck, lowly.

But in his joy at the enchanted, tacit acquiescence of the mate, Ahab did not hear his foreboding invocation; nor yet the low laugh from the hold; nor yet the presaging vibrations of the winds in the cordage; nor yet the hollow flap of the sails against the masts, as for a moment their hearts sank in. For again Starbuck’s downcast eyes lighted up with the stubbornness of life; the subterranean laugh died away; the winds blew on; the sails filled out; the ship heaved and rolled as before. Ah, ye admonitions and warnings! why stay ye not when ye come? But rather are ye predictions than warnings, ye shadows! Yet not so much predictions from without, as verifications of the fore-going things within. For with little external to constrain us, the innermost necessities in our being, these still drive us on.
"And even if there's nothing new, we want more of the old stuff..."
"Then in 1915, my country said, "Son, it's time to stop rambling. There's work to be done. So they gave me a tin hat and they gave me a gun and they marched me away to the war."
“War and war only can set a goal for mass movements on the largest scale while respecting the traditional property system. This is the political formula for the situation. The technological formula may be stated as follows: Only war makes it possible to mobilize all of today’s technological resources while maintaining the property system… If the natural utilization of productive forces is impeded by the property system, the increase in technical devices, in speed, and in the sources of energy will press for an unnatural utilization, and this is found in war. The destructiveness of war furnishes proof that society has not been mature enough to incorporate technology as its organ, that technology has not been sufficiently developed to cope with the elemental forces of society. The horrible features of imperialistic warfare are attributable to the discrepancy between the tremendous means of production and their inadequate utilization in the process of production -— in other words, to unemployment and the lack of markets.” -- Walter Benjamin, "The Work of Art in the Age of Mechanical Reproduction."

Field of Gloom Populated by Malthusians

Bloomberg economics columnist Caroline Baum claims her "specialty is exposing economic nonsense." Yep. In her Henry Hazlitt Memorial Lecture at the Austrian Scholars Conference in 2010, she stated that one of her favorite pieces of nonsense was the lump-of-labor fallacy. Let's see how well she spouts that nonsense.
Another one of my favorite pieces of nonsense is the idea that there is a fixed amount of work -- that if we could just curtail immigration or restrict trade there would be more jobs for more Americans.

Now this one actually has a name. I had to make-up loop-de-loop but this one is called the lump-of-labor fallacy.
Although Baum didn't make up the name of the fallacy, just about everything in the the next section of her talk was made-up, patently false or just plain disingenuous. She claimed that France "fell victim" to the lump-of-labor fallacy, that 1. the "logic" of the 35-hour week was based on a simplistic arithmetical illusion and 2. that the "flaw" in that logic arose from ignoring the cost of benefit packages. Finally, she claimed, the 35-hour law was repealed 3. "but only after the French took to the streets to protest the forced erosion of their quality of life." Ignoring the "fell victim" slur, Baum's score is 1. false, 2. false, false, false and 3. misleading. The French did indeed take to the streets; but most of them did so to protest against the repeal of the 35-hour law. I'll have more on the "logic" and its "flaw" after the clip.
And France fell victim to the lump-of-labor fallacy about little over a decade ago when the socialist government decided to reduce the work week from forty hours to thirty five hours.

And the logic went like this: if it takes one man forty hours to do a job and one man is limited to thirty-five hours, it'll take 1.14 men to do the equivalent of forty hours of work.

Of course the flaw in the logic is that 1.14 men need two benefit packages.

So [ha-huh] the 35-hour work week has been effectively repealed but not before the French took to the streets to protest the forced erosion in their quality of life.
Anders Hayden explained that the 35-hour strategy sought to combine not one but "three different, and to some extent competing, logics." One of these was indeed a work-sharing logic, based not on "the idea that the amount of work is fixed" but on the reality of economic slowdown and rising unemployment. This wasn't an 'idea' or a 'theory' that unemployment was 12 percent but a statistical fact.

But there were other logics behind the policy as well. One was to free up time away from work to allow for more engagement in leisure activities, family and citizenship. The idea was that increased productivity could improve the quality of life and not just increase the quantity of goods that people could buy. A third logic emerged from the demands of employers who proposed to trade off more free time for greater flexibility in scheduling and work assignments. Maybe the 35-hour laws could be criticized for trying to achieve too many disparate policy objectives with one tool. But Baum's claim that "the logic went like this..." is simply false.

Laughable, though, is her explanation of "the flaw in the logic." Of course, "1.14 men" don't need "two benefit packages." They need 1.14 benefit packages. Aside from Baum's careless arithmetic error, with that assertion she exposes her total ignorance of the French 35-hour law> The law accompanied the 35-hour work week with an offsetting reduction in payroll taxes (cotisations sociales). This reduction even led to dispute over how many of the 350,000 jobs created between 1998 and 2002 could be attributed to the work-time reduction and how many to the reduction of the payroll taxes! Furthermore, even if the French had "fallen victim" to the lump-of-labor fallacy and had overlooked the "flaw" that substituting numbers of workers for hours of work per worker increases the cost of benefit packages (which they didn't), there is the anachronism that claims of a lump-of-labor fallacy long predated the birth of employee benefit packages.

As for the "forced erosion of their quality of life," the only large-scale study of the effects of the work-time reduction was a survey of 1,000 individuals conducted in 2001, which found that 59 percent of employees reported an improvement in their overall quality of life, both at work and outside of work, 28 percent reported no change and 13 percent reported a deterioration. While it would be perilous to draw conclusions from one survey or from demonstrations of 300,000 or so; it is presumptuous to make blanket judgments on the basis of no empirical evidence whatsoever, as Madam Baum has clearly done.

Ah, but don't let the facts stand in the way of a good hatchet job!
And the lump-of-labor fallacy was revived in 2001 -- the jobless recovery -- except this time it was productivity growth that was the enemy of hiring.

Of course expansions with the strongest rebounds in productivity seem to also have the strongest hiring but don't let the facts get in a way of a good story.

I mean even if immigrants displace American workers they increase the size of the economy which adds new jobs.

I think it was Milton Friedman who said, you know, it's really not tough if you want to create work. I mean get rid of earth-moving machines and go back to shovels and forget the shovels and use spoons. But, I mean, this is not what we're trying to do.
What can one say? Which was it? "The jobless recovery" or "expansions with the strongest rebounds in productivity seem to also have the strongest hiring"? Baum makes what passes for an empirical claim except with no actual facts -- nothing but an impression. Do expansions with the strongest rebounds in productivity have the strongest hiring? Let's help Baum out with a quick Google search. Oh, look! William Nordhaus looked at "detailed industrial productivity and employment data for almost 60 years" in 2005 and concluded, "more rapid productivity growth leads to higher rather than lower employment in manufacturing." So Baum was right then? Hold on, now, what's this down at the bottom?
It appears that the cause of lower manufacturing employment over the last decade is not higher productivity growth in the United States, Nordhaus says. Rather, the source is likely to be higher productivity growth, and more pronounced price declines, among foreign manufacturers that compete with U.S. companies.
So, productivity is not the enemy of hiring, after all -- foreign trade is! But what did Baum tell us back at the beginning about curtailing immigration or restricting trade? It's a lump-of-labor fallacy! (Or is it a shell game?)

Maybe Milton Friedman said those things about earth-moving machines, shovels and spoons. But if he did he was paraphrasing Frederick Bastiat who was mouthing an already well-worn platitude. Here's Dorning Rasbotham in 1780: "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." Take that, Milton Friedman!

And here I thought human beings were constantly having to compromise their infinite wants...
People who think the quantity of labor is fixed probably buy into the idea that the demand for goods and services is finite as well.

This piece of nonsense makes an appearance usually when the economy is struggling to rebound from recession and things aren't quite going according to plan. And usually some economist pipes up and says "well, we didn't have a severe downturn, you know, we can't have a good bounce back because there's no pent-up demand."

You know and here I thought that human beings were constantly having to compromise, you know, their infinite wants to limited resources.
Infinity! Oh, what a concept! Without going too deep into this muddle of abstraction and metaphor, it is quite obvious that "infinite wants" would require an infinite amount of time in which to do the infinite wanting and infinitely more time to consume the infinite desired goods if those wants were, perchance, fulfilled. So one of the purportedly infinite wants would have to be for an infinite amount time in which to do the wanting and consuming. Of course this is nonsense. But Baum warned us her specialty was expounding it.

To be charitable, let's say that what Baum really meant was that humans' wants exceed their means by some undefinable amount. Still, we run up against the objection that not all those wants are for commodities and that even the desire for any given commodity carries with it, inseparably, a desire for the time to enjoy the consumption of that commodity. So human wants are constrained not only by limited resources but also by the very nature of those wants. The fantasy of "infinite wants" drains the verb "to want" of any concrete meaning.

This would all be splitting hairs over colloquialisms were it not for Baum's professed function as she who exposes "nonsense." What we get instead are unsupported allegations that other people's ideas are nonsense "explained" by certifiably ridiculous arguments. Substance = 0. Persuasion is all in the tone of matter-of-factness and sarcastic disdain for "those people."

The next segment contains what is undoubtedly Baum's best line, "The field of gloom is usually populated by Malthusians..." A field of gloom; populated by Malthusians! Now that's funny. Presumably, the field is over-populated by Malthusians, too, if they really know their stuff.
This idea reached its apotheosis in 2004 with the publication of a book entitled The Death of Demand.

Now this book landed on my desk courtesy of some publisher or publicist and the reason it piqued my interest is that the field of gloom is usually populated by Malthusians who worry about the inability to produce enough food to take care of a growing population.

I mean here was someone who actually said demand was satiated.

This author argued that we had reached something called "an innovation saturation" -- that there was nothing capable of reinvigorating the economy.

Well, who knew we needed an ipod before, but you know, before Apple came up with an idea, successfully produced and marketed it?
Who knew? And who knew that anecdotal evidence was decisive? And even if there's nothing new...
And even if there's nothing new we want more of the old stuff. We want bigger houses, you know, fancier appliances, more cars. [not to mention faster horses, younger women, older whiskey and more money!].

You know, in the fifties it was, you know, a car in every driveway. And that gave way to the two-car garage, now the three and the four-car garage.

I always like to tell people that if I'm going to worry about something it's not going… it'll be the sun going dark in five billion years not the death of demand.

Tuesday, August 14, 2012

Brigitte Granville, Professor of International Economics and Economic Policy at the School of Business and Management, Queen Mary College, University of London is an Unprincipled Hack

At Project Syndicate, Professor Granville wrote:
The repeal of the tax break on overtime reflects another economic fallacy to which French Socialist politicians are deeply attached: the “lump of labor” notion that underlay the most disastrous of their economic policies – the 35-hour workweek, introduced in 2000. The idea behind the policy is that demand for labor is a constant, and that this fixed number of aggregate working hours required by employers to meet final demand can be spread more evenly among workers to reduce unemployment.
J.J. Grandwille

Such measures, designed to create jobs by freeing up work hours, are futile at best, and are often detrimental. French Socialists should recall their school physics lesson about communicating vessels: when a homogeneous liquid is poured into a set of connected containers, it settles at the same level in all of them, regardless of their shape and volume. Generating more “liquid” (jobs) requires not discouraging the entrepreneurs on whose activities sustainable job creation ultimately depends. The effect of fiscal and regulatory pressure on employment is to encourage French firms to invest and hire outside France.

Dear Professor Granville,

I have studied the "lump-of-labor fallacy" for 15 years and published two academic articles on it. Although I have traced the seminal fallacy claim to an obscure 18th century pamphlet written by a Lancashire magistrate, I have never encountered anything exactly like the puzzling "physics lesson" that you appended to your eructation of the fallacy claim at Project Syndicate. If I follow your metaphorical reasoning, you seem to be suggesting that jobs are like a homogeneous liquid and countries resemble a set of communicating vessels that the jobs flow between. After that, I am unsure what you intend by the effect of fiscal and regulatory pressure. Are you suggesting that it changes the shape or volume of the French "vessel" or that it hydraulically pushes the "liquid" out of that vessel?
French Socialists should recall their school physics lesson about communicating vessels: when a homogeneous liquid is poured into a set of connected containers, it settles at the same level in all of them, regardless of their shape and volume. Generating more “liquid” (jobs) requires not discouraging the entrepreneurs on whose activities sustainable job creation ultimately depends. The effect of fiscal and regulatory pressure on employment is to encourage French firms to invest and hire outside France.
The author of the 18th century pamphlet, Dorning Rasbotham, did have recourse to a sort of hydraulic metaphor, arguing that "trade, in general, will soon find its own level." I am pasting a copy of the excerpt below.

You may be surprised to learn that Arthur O. Dahlberg employed a hydraulic model in his 1932 book, Jobs, Machines and Capitalism that sought to show the necessity of progressively reducing working time in order to maintain equilibrium in an economy with technological advance. In other words, Dahlberg used a more elaborate version of the hydraulic metaphor to demonstrate the non-fallacy and non-fixity of the sort of policies you denounce as based on the idea that the demand for labor is a constant! Of course, Jan Tinbergen and Charles Roos, his associate at Econometrica in the 1930s, were suspicious of this kind of mechanical metaphor, rejecting a paper by F. Creedy with the admonition that "all the paper does is set up a series of analogies between economic and physical situations. One can do this ad nauseum without getting anywhere in particular."

I would be most grateful if you could share with me your evidence for the allegation that the French 35-hour law was indeed based on lump-of-labor fallacy thinking. By "evidence" I am, of course, not referring to previous allegations made by opponents of the policy but to actual statements by proponents of the law that indicate belief in such a notion -- and by that I don't mean simply a recognition that unemployment exists or the suggestion that reducing work time might be a remedy, neither of those constitute prima facie evidence of a belief in a fixed amount of work. I would also be very interested to know your empirical evidence for your conclusion that the 35-hour week was, as you insinuate, "futile at best" or even detrimental. Again, by "evidence" I am not referring to the hearsay of previous allegations made by sworn enemies of the policy. I am already familiar with a range of findings from studies, some of which are positive, others negative or inconclusive that on the whole suggest to me the difficulty of isolating the effects of the policy from confounding factors and not the unambiguous triumph or failure of the policy.

Yours sincerely,

Tom Walker

Monday, August 6, 2012

Another One Bites the Lump

Rob Marchant describes himself as "Activist, free thinker, Labour Party management team through 2001 and 2005 general elections, responsible for Labour's early web presence and creator of its first-ever national electoral register."

Rob blogs at "The Centre Left" and New Statesman's "The Staggers." Rob's idea of "free thinking" would appear to consist of swallowing tired, old reactionary prejudices and regurgitating them as common-sense, forward-looking contributions to a "new paradigm for the left."

On Sunday, Rob stepped into an ideological dog turd, accusing a commenter who wrote, "Better early retirement than high youth unemployment," of committing the dread lump-of-labour fallacy. It is tiresome to have to keep responding to braggarts who are utterly uninformed yet cocksure that their shriveled tidbit of conventional wisdom is the consensus of "all the world's economists." Point out a dozen or so prominent exceptions and their eyes glaze over even as their stubby fingers jam their earholes with: "I can't HEAR you! You're not confirming my buy-asses!"

Anyway, each utterance of the lump-of-labour fallacy claim, no matter how flaccid, presents an opportunity to start over with yet another explanation of why the fallacy CLAIM is itself a fallacy and what the true implications of the slimy rhetorical trick really are. A recalcitrant soul-mate of a sort -- a.k.a. Owen Paine -- diagnosed my explanatory obsession as akin to Captain Ahab's pursuit of the white whale, Moby Dick. More on that later...

But first, I will start out where I left off with the Bloomberg columnist, Caroline Baum. Off-shoring and automation (for example) 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. Period.

People don't have to assume a "fixed amount of work" to be anxious about the prospects of unemployment. There only has to be fewer jobs created than there are jobs eliminated plus new entrants into the labor market -- as in the present situation. Similarly, they don't have to assume a "fixed amount of work" to propose that reducing the hours of work can relieve unemployment. See Kurzarbeit.

The issue is clouded by the fact that the lump-of-labor fallacy is invoked in response to both potential causes and potential remedies for unemployment. Immigration, off-shoring, overtime, piece-work, imports and automation are all implicated on the cause side as are shorter work time, early retirement and protectionism on the remedy side. Although each of these issues has something to do with employment, the differences between them should raise alarms about a one-size-fits-all disclaimer. Are opponents of immigration and advocates of shorter working time really the same people or proceeding from the same assumptions? Or are the guardians of all-the-world's-economists' infallibility committing some kind of a lump-of-issues fallacy?

Elsewhere, I've gone into an explanation of where this catch-all fallacy claim comes from ideologically. But maybe that was over intellectualized. I'm thinking now the explanation is simpler and more visceral. What it boils down to is faulting the unemployed for their situation. Sure, statistically unemployment may be high but for any anecdotal individual, if they look hard enough, are willing to go anywhere and do anything for whatever wage is on offer, they'll find something, somehow. I can't say how true that story is for every unemployed person but it is probably "true" (or seems true) for those who invoke the fallacy claim. "These people should just shut up, stop blaming other people for their situation and get a job."

Rob Marchant doesn't want to sound like a crusty old Colonel Blimp with no empathy for the unemployed. So instead of saying "there's a job for anyone who isn't a deadbeat," he says, "your assumption is... wrong. This is a fallacy recognised by pretty much all economists, even those fairly left-leaning like Nobel prizewinner Paul Krugman..." It all sounds so much more reasoned and authenticated.

But how do I know what Rob Marchand is thinking when he presumes to know what other people are thinking? How do I know? "A crowd of people turned away / But I just had to look / Having read the book..." Yes, I read the book! Or in this case, the pamphlet. At the bottom of page 18 of Dorning Rasbotham's Thoughts on the Use of Machines in the Cotton Manufacture (1780) is presented the locus classicus for the lump-of-labour fallacy claim. On page 20, though, Squire Rasbotham reveals the opinion truly at the bottom of his heart:
This then is certainly the poor man's time. Now the advantage evidently lies with him. Alas! I fear, too few will be wise enough to improve it. Many had rather carry their money to the Alehouse. Their families are little better for their gains. They can afford to spend, to spend largely there: and, when their money is gone, complain of machines, of tradesmen [i.e., merchants], of any body, every body, but themselves. We have not improved our day of mercy as we ought. Providence may justly take it from us.
In conclusion, the fallacy claim rests on the questionable premise of the alehouse theory of unemployment: the poor have no one to blame but themselves when their money is gone because they weren't wise enough to improve their situation when they had the opportunity. I invite Mr. Rob Marchant to produce the evidence "all the world's economists" -- including the "fairly left-leaning" Nobel prizewinner, Paul Krugman -- have amassed in support of the alehouse theory. In the absence of that evidence, perhaps Mr. Marchant would care to argue that the fallacy claim is not based on the alehouse theory? In that case, he will have to show an alternative genesis and evolution of the fallacy claim to that which the Sandwichman has documented extensively over the last 12 years.