Facts or Fallacies Part III: Combinations, Murder and the Primordial Lump
Facts or Fallacies Part III: Combinations, Murder and the Primordial Lump
by Tom Walker (Sandwichman at Ecological Headstand)
In Part I, I compared the statistical fact that non-farm employment was lower in September 2010 than it had been in December 1999 with the assertions that those who believed any such thing could occur were guilty of a lump-of-labor fallacy. In Part II, I rehearsed debating points regarding Paul Krugman’s columns citing the alleged fallacy.
My intention in Part III is not to refute the fallacy claim. I believe I did that sufficiently in “Why Economists Dislike a Lump of Labor” and “The Lump-of-Labor Case Against Work-Sharing.” To date, no one has brought forward a substantive rebuttal to those articles. Instead, I will explore further the evolution of the fallacy claim.
In “The Lump-of-Labor Case Against Work-Sharing,” I established that David Frederick Schloss was the originator of the phrase designating the lump-of-labor fallacy (the term “lump work,” designating labor sub-contracting, can be traced back to Henry Mayhew’s 1851 London Labour and the London Poor). That attribution has not been challenged and has even been taken up by The Economist — without, of course, giving credit to the researcher or acknowledging his debunking of the fallacy claim. A few months ago, I discovered the probable source of the stock explanatory supplement to the fallacy claim, “their theory is that the amount of work to be done is a fixed quantity…” which appeared in a report in the New York Times on the 1871 Newcastle engineers’ strike.
The phrase and the explanation still leave questions as to the origin of the general idea, which was in some respects already a commonplace by 1871, as several precursors to that 1871 New York Times report and contemporary letters to the editor of the Times of London demonstrate. What those precursors have in common with the New York Times report and with much subsequent usage is the contention of a union principle of extortionate obstruction.
John Wilson in “Economic Fallacies and Labour Utopias” (1871) cited “the enforcement of all sorts of arbitrary restrictions on the combined workmen” attributable to a “Unionist reading of the Wage-fund theory.”
James Ward in Workmen and Wages (“What Trades-Unions Really Are”, 1868) alleged the “real cause of the objection to piecework and overtime… the fallacy which lies at the bottom of this whole system [of trade unions] as:
…the view that wages being determined in their amount by importunity and combination, they form a fund for the general benefit of all, and that the fund gained by the contributions and exertions of all ought not to be encroached upon by the superior strength and dexterity of a few.
Harriet Martineau in “The Secret Organisation of Trades,” (1859):
Their aim and object is, in every case which we have been enabled to investigate, to stint the action of superior physical strength, moral industry, or intelligent skill; to depress the best workman in order to protect the inferior workman from competition; to create barriers which no Society-man can surmount, and which few non-Society-men dare to assail; and, in short, to apply all the fallacies of the Protective system to labour.
Martineau refers to an 1838 article, “Trades Unions and Strikes,” as authoritative regarding the true motives and practice of trade unionism. The 1838 article commented on the conspiracy trial of five leaders of the Glasgow Cotton Spinners Association, which took place in the wake of a strike and the murder of John Smith, a strikebreaker. In his capacity as Sheriff of Lanarkshire, the article’s author, Archibald Alison, had conducted the raid on the union meeting and arrested the accused.
Sheriff Alison (1792-1867), historian, entrepreneur and leading figure in the judiciary, was deeply involved with measures against political activists for more than twenty years. His investigations included the demonstrations leading up to the 1832 Reform Act, the activities of individuals with trade union and Chartist sympathies, protesting cotton spinners and those involved in the 1848 bread riots. He received special commendation for his work on the latter when, following bread riots and a series of demonstrations (at which he was on occasion to be seen on his horse on the police front line), apprehended persons, seen to be ringleaders, were prosecuted and transported.
In “Trade Unions and Strikes,” Alison discussed the “leading particulars and principles on which all Trades’ Unions are founded” in detail. Among the myriad restrictions imposed by “this despotic body” “upon the freedom both of capital and labour” were regulations regarding wages and hours of work:
The ruling Committees also take upon themselves to fix the number of hours which the men are to labour, and the wages they are to receive. It would be incredible, a priori, to what a length in some trades their laws carry this restriction; and how effectually, by a compact, well organized combination, they can succeed in raising, for a long period, the price even of the most necessary articles of life.
Alison’s own political philosophy can be discerned from his observation in yet another article he wrote on the Glasgow incident, “Practical Working of Trades Unions,” that “Violence, terror, and intimidation, are in fact the foundation of all popular combination”:
No one seemed to anticipate that the workmen themselves were to be the principal sufferers by the repeal, and that the despotic authority assumed by the Managing Committees was to be the source of far greater distress and suffering to the operatives than all the Combination Laws had been, or than any government, how despotic soever, could venture to inflict. Yet all this has now proved to be the case, and the misery thus brought upon the working classes by the tyrants of their own creation far exceeds in intensity any thing which has been produced even by the combined effect of scarcity of provisions and commercial embarrassment. A more memorable commentary never has been read on the prudence of intrusting the working-classes to their own guidance, according to the approved system of Modern Political Philosophy, or of the enormous peril even to themselves, of those principles of self-government, which are at once the most popular, the most common, and the most dangerous of the many false doctrines which for the last ten years have overspread the world.
If, indeed, the working classes could be brought to combine without violence and intimidation to others, much of the argument urged in support of the unlimited power of combination would be well founded, and by far the greatest part of the suffering they bring upon themselves and their fellows would be avoided. But experience proves that this never is the case: and a consideration of the disposition of human nature in such circumstances forbids the hope that it ever will be otherwise. Violence, terror, and intimidation, are in fact the foundation of all popular combination; and so universally is this the case, that it may be doubted whether there has been so much as a single instance of combination, either before the repeal of the Combination Laws, or since that time, of a strike lasting for any considerable time without threats or violence to the new hands, having formed, either by express agreement or general understanding, an essential part of the system. Indeed, if you speak to an operative in any trade of striking, and conducting himself according to the principles he ostensibly professes, that is, of giving to others that liberty in disposing of their labor which he asserts for himself, he will at once, if you are in his confidence, laugh at your folly, and admit that, without intimidation and menaces to others, combination would be a mere empty name.
It needs to be emphasized that in the above passage, Alison indicts all trade unions, not only the Glasgow Cotton Spinners Association. Did the Cotton Spinners have restrictive regulations? It would appear so. A less hostile source than Alison states, “The great object of this Association, as appears from its regulations, and the Report to which we have referred, was to keep up the wages of cotton-spinning in and around Glasgow, by producing, artificially, a short supply of that class of labourers.” Can one generalize from this single observation? “Glimpses of similar organizations, among various bodies of workmen, have been obtained, from time to time, in the progress of strikes, or in the proceedings of courts of justice.” Nevertheless, the author of this milder treatise in Tait’s Edinburgh Magazine concluded, “The real cause of the misery of the working classes, is a short supply of food and employment, occasioned by artificial means, and an unjust appropriation of even of what exists by the privileged classes.”
There are still a few loose threads to be tied up regarding the tenets of classical political economy on machinery and the matter of Luddism or frame-breaking. I had earlier suspected an 1831 popular tract, The Working-Man’s Companion. The Results of Machinery, Namely Cheap Production and Increased Employment, Exhibited: Being an Address to the Working-Men of the United Kingdom, as a possible source of the fallacy claim. That book presents an amiable and didactic rebuttal to the error presumably committed by those who break knitting frames to protest their destitution. The book’s central premise was a popularization of Say’s Law of Markets:
There is no truth so clear, that as the productions of industry multiply, the means of acquiring those productions multiply also. The productions which are created by one producer, furnish the means of purchasing the productions created by another producer; and, in consequence of this double production, the necessities of both the one and the other are better supplied. The multiplication of produce multiplies the consumers of produce.
The consequence of this law is that there is no such thing as a limit to the wants of consumers or to the means available to consumers to satisfy their wants. Thus the amount of work to be done is also unlimited and, in fact, expands as a consequence of machinery. The introduction of machinery may indeed displace workers in one particular occupation but will soon open new opportunities. With regard to that temporary displacement, however, the author had a bit of advice uncharacteristic of latter-day fallacy claims: withdraw your labor from the market!
There is a glut of laborers in the market. If you continue in the market of labor during this glut, your wages must fall. What is the remedy? To go out of the market… When there is too much labor in the market, and wages are too low, do not combine to raise the wages; do not combine with the vain hope of compelling the employer to pay more for labor than there are funds for the maintenance of labor: but go out of the market. Leave the relations between wages and labor to equalize themselves…
Similarly, John McCulloch recites, in “Effects of Machinery and Accumulation,” a thoroughly orthodox version of classical political economy, refuting arguments by Malthus and Sismondi about the prospects of a “general glut” of the market. But he had some novel things to say about the hours of work:
It may, however, be asked, would the demand be now sufficient to take off the increased quantity of’ commodities?—Would their excessive multiplication not cause such a glut of the market, as to force their sale at a lower price than what would be required to-repay the diminished cost of production? But it is not necessary, in order to render an increase in the productive powers of labour advantageous to society, that these powers should always be exerted to the full extent. If the labourer’s command over the necessaries and comforts of life were suddenly raised to ten times its present amount, (and this would really be the effect of the improvement in question), the consumption as well as the savings of the labourer would doubtless be very greatly increased; but it is not at all likely that he would continue to exert his full powers. In such a state of society we should no longer hear of workmen being engaged 12 or 14 hours a day in hard labour, or of children being immured from their tenderest years in a cotton-mill. The labourer would then be able, without endangering his means of subsistence, to devote a greater portion of his time to amusement, and to the cultivation of his mind.
McCulloch also saw no threat from combinations of labor to the functioning of the laws of supply and demand, “it is obviously false to affirm that workmen are allowed to dispose of their labour in any way they please, so long as they are prevented from concerting with each other the terms on which they are to sell it.” McCulloch argued that even when workmen combine to enforce an unreasonable demand, it does no harm because they will fail in their object.
Finally, there is the curious matter of David Ricardo’s famous chapter On Machinery, added to the third and last edition of his Principles of Political Economy, in which he contended that “the discovery and use of machinery may be attended with a diminution of gross produce; and wherever that is the case it will be injurious to the laboring class, as some of their number will be thrown out of employment, and population will become redundant, compared with the funds which are to employ it.”
Ricardo’s supposition has been upheld by such worthies as Paul Samuelson (“Ricardo was Right!“) and John R. Hicks (“A Reply to Professor Beach“). Joan Robinson went so far as to suggest, “…there appears to be, from a long period point of view, very strong grounds for the popular opinion that inventions tend to reduce employment.” Samuelson, however, reiterated that, “Needless to say, the doctrine is wrong which claims that all inventions that shift resources from circulating capital to fixed capital — to durable machines at the expense of “wage funds” — must reduce the demand for labor.”
As I said at the beginning, my intention here has not been to refute the fallacy claim but to provide further background on an allegation that has already been thoroughly discredited but that keeps reappearing with impunity.
thanks for the history. i think i am on your side so don’t be alarmed if i say that i don’t think you have refuted the fallacy (not your intention) as much as shown us more of the dreary history of intellectuals providing clever arguments for whatever they, probably sincerely, believed before they even thought about it.
no way to avoid this of course, and entertaining enough, perhaps even useful. but one should always remember to take the intellectuals as being less true than they sound… especially when we agree with them. the history of the economy… as i understand it… has shown that both “invention” and the rights of labor have contributed to a general rise in the standard of living… which has perhaps begun to contribute to a lowering of the quality of life.
me, i don’t know. but i think our work is not yet done. and we won’t get anywhere if all we do is talk about it. i think we do better when our actions are informed by a sense of decency toward our neighbors… decency in the very short run. none of this “in the long run…” About that, at least, Keynes was right.
There have always been, and there will always be, those with “..treacherous pens and tongues to deceive..” the people. And maybe they deceive themselves, but if so they do so to their own advantage and to the advantage of those that “bribe” those pens and tongues to carry on their deceptions. The power of the people may be from the end of a gun, but the power of the elite and their capital is supplemented by controlling both sides of a dialogue and all sides of a debate.
We have been watching this sorry fact of human nature play out during the past several decades though, as Tom’s post describes, it is a process that is centuries old. Wealth need not bribe their informants in the classical sense of a direct or indirect quid pro quo, but more likely through financial control of the means of communication and education. Journalism and journalists are and have always been for sale. Tenure is a reward for staying on track; or is it on message? The proliferaion of the privately financed, “not for profit”, think tank industry is a modern phenomenon which concentrates the control of the message in yet fewer hands for yet greater control.
Tom’s post makes it reasonably clear that union busting efforts have been continuous since the very beginnings of the union movement. To this very day we still have our so-called leaders placing blame for every economic dysfunction at the feet of organized labor as though those unions had any real power beyond selling their own voices in an effort to achieve scant political influence. This week’s reports in the press would have an alien believe that every economic ailement of the past several years is the result of union might, especially the evil public unions. Those same public unions which are legislatively prevented from using their only significant weapon, to withhold their labor. So there are still, more than two hundred years after we were warned of them, the proliferation of those treacherous pens and tonuges who are paid to deceive the people and prevent their understanding of their own political and economic realities.
so true. what fills me with despair is the number of “brilliant” “non partisan experts” willing to sell their souls.
i have watched this enough to be pretty sure the first thing the devil takes when you sell your soul is your ability to tell the truth… not merely the ability to say it, but the ability to recognize it. after a very short time (milliseconds) the liar believes himself and is convinced that it is you who has a hidden agenda if you don’t believe him.
“Why economists dislike a lump of labor” is behind a pay wall. If you want more discussion of it you need it to be more available.
Your discussion of misapplying “lump of labor fallacy” to reduced work hours is quite interesting, but you go too far. The fact that something can be overused, does not mean it does not exist.
CalculatedRisk (McBride) quotes somone saying “Too many older people (professors, Morley Safer, etc.) continue to work for selfish reasons, thereby taking jobs from the young and unemployed” and asserts that this is a classic lump of labor fallacy. I think that in terms of its current usage, he is correct. The idea that there is only that job and if its owner does no relinquish it, no one else can be employed, is wrong. The idea has been given a term.
The idea that work hours will not effect empolyment also seems wrong, worthy of being separate discussions.
in the absence of anything much to go on here, i’d have to say i don’t think he is correct. that is to say, it is not a fallacy that people holding on to jobs they might have retired from deprives younger people of opportunity. there has to be a reason mob bosses keep getting bumped off.
and, suspecting this has already been discussed, whatever labor expansion may occur in the long run, there doesn’t seem to me to be much doubt that in the short run there is only so much “work” to go around.
it seems to me that when a class of laborers gets obsoleted they don’t so much find new jobs as either coast toward oblivion, or replace younger workers at “less skilled” jobs. the workers for the new jobs created by technology tend to come from new population… that is the general increase in population creates its own demand for work, and the younger people grow up to take the newer-technology jobs.
Arne, Send your email address to me at lumpoflabor at gmail dot com and I’ll email you a copy. The other paper, “The Lump of Labor Case Against Work Sharing,” is available for download and it does the job. It just isn’t a “blind, peer-reviewed journal article” — a technicality.
apologies from me because i haven’t read your thesis and i am trying to provoke a discussion at least in the absence of an argument.
it seemed to me that no one ever claimed there was a lump of labor. the “lump of labor fallacy” arose as a kind of straw man to “refute” the evidence that a lot of people were being put out of their traditional work by “technology.” or that in general the labor market acts from time to time as if there was only so much work to go around, and when people with a conscience point out that unemployed workers are suffering, they get met with “the lump of labor fallacy” fallacy.
we are supposed to carefully avoid doing anything to alleviate the distress of unemployment so we don’t interfere with “the market’s” inevitable benevolence creating new and better jobs… for those that live through the depression.
i believe the “fallacy” fallacy is currently being used to fend of a line of thought that would go… “hey, we can’t find jobs for people now, why would we want to raise the retirement age, in fact we ought to consider making it lower.” don’t want a thought like that to get started. might interfere with our plans to eliminate retirement for the working class forever. after all, why would the servants WANT to retire?
You’re right. Jazzbumpa said it very well in Part I. I wonder if defenders of the fallacy claim listen. But, here we go again…
The CLAIM is that people who advocate shorter hours or early retirement or who are pessimistic about the effects of automation, immigration or “free trade” ASSUME that there is a fixed amouint of work.
It’s a rather simple matter to CHECK whether or not the CLAIM is VALID. Did the claimant ASK the defendants whether or not they made such an assumption? If they didn’t ask or if they asked and the answer was no then the claim can only be valid IF AND ONLY IF it is NECESSARY to the defendant’s argument for shorter working time or some other relief from the unemployment resulting from technological change etc.
The BURDEN OF PROOF here is on the claimant, not on the defendant. It is a sufficient defense against the fallacy claim to show that the claimant hasn’t met the burden of proof. I have done that with numerous examples of the claim (see my papers referenced above). But I have gone farther than that. I’ve also shown that no claimant COULD meet the burden of proof on a generalized claim.
But let me address Arne’s specific example below. “Too many older people continue to work for selfish reasons, thereby taking jobs from the young and unemployed.” Now I don’t particularly like that formulation. So I’m not defending it because I agree with its political implications.
But like it or not, there’s no logical fallacy in the argument. McBride didn’t demonstrate a fallacy, he only asserted it (as fallacy claimants are wont to do). If Paula Span had written something like “EVERY older person who continues to work for selfish reasons takes a job away from a young and unemployed person” then that would indeed involve a fallacious assumption of a fixed amount of work.
It is therefore possible for someone to commit the fallacy and I have seen and reported on instances (for example, George Gunton in the 1880s). But such instances are rare. One can easily avoid committing the fallacy by not making absolutist claims.
One further point on the Paula Span argument. It is sometimes claimed that an increase in labor supply results in an increase in the demand for labor. I would assume that in general that is true. However, such an increase in labor demand is not necessarily equal to or larger than the increase in labor supply. It COULD be larger but it could also be smaller. More people in the labor force thus will result in more jobs but not necessarily as many more jobs as three are people.
David Card did a study in Miami, which, if I recall correctly, showed that immigration actually expanded employment to a greater extent than the expanded workforce from the immigration. Those results may be valid regionally but we still wouldn’t know know what the macroeconomic effect was. Suppose that employers relocate to Miami because of the larger pool of labor. What happens in the places they’ve relocated from? I personally don’t think we should be making political decisions about immigration based on the “economic effects.” I don’t like people scapegoating immigrants as the cause of unemployment. But I also don’t approve of using bogus, reactionary arguments to support progressive causes.
What percenatge of the population are Profs? I do not believe we are talking Profs and the exalted few. We are talking mainstream Americans who are sitting on the sidelines. A decade has passed since the 2001 recession and the last time the percentage of the population particpating in the civilian labor force has grown. It has been on a downward trend since then. But why? Job creation has not kept up.
The idea that there is only that job and if its owner does no relinquish it, no one else can be employed, is wrong. The idea has been given a term.
No, it doesn’t, and that is really the crux of the matter. The “lump of labor” idea is only inunciated by those who want to paint it as a fallacy. For the most part they are being either absurd or caeless, and much of they time, I suspect they are flat out lying. This is not an idea that needs a term. It is a canard that needs extermination.
OTOH, if I were to say, “There are only X number of jobs,” I could possibly – though not necessarily, be in error. But it would be an error of fact, not a logical fallacy.
The real fallacy belongs to the LOLF claimant. And, once again, it is because he is attributing to his opponent and idea that he does not ascribe to.
Whenever anybody hauls out the “lump of labor fallacy” canard, the first thing to do is examine his motives. This is a case where innocence must be proven.
“Whenever anybody hauls out the “lump of labor fallacy” canard, the first thing to do is examine his motives. This is a case where innocence must be proven.”
I know you’re being facetious, JzB, but I for one would still presume innocence, in the sense that the fallacy claimant really doesn’t know what he or she is talking about. Ask the lump-of-labor claimant for his or her views on Sir Archibald Alison’s 1845 endorsement of Sismondi (see“Mr. Wordy” on Corn, Combinations and Chrematistique). Sure, that sounds absurd but no more absurd than a “lump of labor”!
The trend in unemployment from 2002 to 2008 was down.
I don’t object to discussing meaningful topics, but I do object to torturing data to make it fit the theory.
I suppose I mostly agree with JzB. When someone argues that this “fallacy” is involved, they are really saying that the premise is not valid. Whether such needs a name or not it does have one.
I stepped into this mostly because I saw non-representative data being used to claim that the premise was valid.
coberly has valid concerns about the process of creating new jobs as old ones become obsolete. Nonetheless, there are new jobs.
In the case of the mob bosses, my deep understanding based on hearing someone do a Godfather impression tells me that bumping off the old boss is part of the job description for becoming the new boss, so the is no deprivation of opportunity.
More to the point, here in America, land of capitalist opportunity, if you want to be a mob boss, you can start your own mob.
Only if you look at U3 and forget the numeric of Population participating in the Civilian Labor Force are you correct. The trend is unemployment just looking at U3 is done; bi\ut, it is only a partial picture.
If you do not know the relationshipship between Participation Rate and Unemployment (U3); then indeed it is a sad day. The numbers of the Civilian Non-Institutional Population within the Civilian Labor Force has been on the decline since 2001. Even Thoma finally came to recognize it. Laurent Guerby charted tne numeric of it.
U3 is a bull shit number.