The Nastiest Motives of Nasty People
“Economists are active militants against the concept of the lump of labor, that is, the popular idea that the total number of jobs or of working hours is fixed (Walker, 2007).”
The quote is the first line from a 2017 paper by Tito Boeri, et al. It gives me confidence that at least some of the time my message is getting through.
The image below is from a 2018 report published by the Roosevelt Institute. It tells me there is still a huge amount of work to be done teaching people about the ideological deceptions of the so-called lump-of-labor fallacy.
At times, over the last 20 years or so – never mind how long precisely — I have felt like Captain Ahab in pursuit of the whale as I have wrestled with the so-called “lump-of-labor fallacy.” Having finally sized the beast up, I am convinced that the fallacy claim is little more than a “pasteboard mask” behind which, “some unknown but still reasoning thing puts forth the mouldings of its features.” That hitherto unknown thing is a theodicy, or, perhaps it would be more accurate to call it theo-dicey in recognition of its treachery.
A theodicy is “an attempt to reconcile the goodness and justice of God with the existence of evil,” Jonathan Cook explained in Inscrutable Malice: Theodicy, Eschatology, and the Biblical Sources of Moby-Dick. In the case of the fallacy claim, it is not the goodness and justice of God, per se, that is at stake but the rationality and benignity of the capitalist system, the “invisible hand” that supposedly impels narrowly self-interested actions to promote the general good of society and the tendency toward equilibrium by means of which prices and quantities of trade “find their own level.”
“The great merit of the capitalist system, it has been said, is that it succeeds in using the nastiest motives of nasty people for the ultimate benefit of society.” To seek to intervene wantonly in such a divinely-ordained contrivance is thus to exhibit an unseemly absence of faith. Austin Robinson’s sarcastic remark, quoted above, is usually mangled and mis-attributed to John Maynard Keynes, who, to be sure, did indeed comment (half-jokingly?) on the need to “pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not” and who saw avaricious money-making as a “comparatively harmless channel” for “dangerous human proclivities” that might otherwise “find their outlet in cruelty, the reckless pursuit of personal power and authority” — as if the two pursuits were mutually exclusive rather than complementary. But we haven’t even gotten to that alliterative “paradox of poverty in the midst of plenty” yet.
The lump-of-labor fallacy’s alleged — albeit unsubstantiated — assumption of a “fixed amount of work to be done” rewords a staple of 19th century classical political economy, the “certain quantity of work to be done” determined by the number of workers who could be profitably set in motion by a previously-accumulated capital consisting of subsistence goods – a “wages fund.” Who did or didn’t say “a certain quantity of work” or “a fixed amount of work” is the key evidence for or against the fallacy claim and, consequently, the theodicy claim.
The “certain quantity of work” also happens to be symptomatic of the adaptation from religious to secular theodicy. Classical political economists didn’t invent a static universe. They inherited it from the same natural law enlightenment of the old Great Chain of Being as their Panglossian optimism. Montaigne’s proposition that “one man’s gain is another’s loss,” and Machiavelli’s notion of a “fixed quantity of happiness” in the world at any one time are notable specimens, as was Francis Bacon’s observation that “the increase of any estate must be upon the foreigner (for whatsoever is somewhere gotten, is somewhere lost)…”
Originally overt and unabashed in the wages-fund doctrine of 19th century vulgar political economy, the static premise has had to go incognito in modern academic economics, masked behind simplifying assumptions, methodological conventions, ceteris paribus, dead metaphors, unexamined analogies and reams of “math.” Unlike theodicy proper, the political economy dispensation didn’t set out to make suffering bearable for the sufferers, but only to yield, all too lustfully, to a temptation whose role as “a component of the self-consciousness of European humanity” must never be underestimated.
Misattributions are commonplace. Often it is simply the assignment of a saying to a historical celebrity because, “who ever heard of Austin Robinson?” Mark Twain, Abe Lincoln, Gandhi, Stalin and Winston Churchill are said to have said many a saying they never said.
Sometimes, though, the intention is to put incriminating words in the mouth of a bogeyman or to burnish an obscure opinion by attributing it to some illustrious personage. In the case of the lump-of-labor fallacy, the false attribution of a fallacious belief to the economically-naïve workers or trade unionists is a disavowal and projection of the economists’ own unacknowledged — possibly subliminal — convictions about the inherent rationality and benevolence of the market-deity who cunningly enlists “the nastiest motives of nasty people for the ultimate benefit of society [except, of course, for that obligatory residual of ‘poverty in the midst of plenty’].”
The temptations of theodicy are formidable. Neither was Marx exempt, with his “dialectical” projection of a revolutionary proletariat, forged in abjection and class struggle. Even the truth, as Ernest Tuveson remarked in a review of Melville’s The Confidence Man, “is no guaranty of either happiness or freedom.” But what we can do is to expose and repudiate the facile satisfactions of the economic pseudo-theodicy we know and to re-evaluate those perspectives that the econo-theodicean orthodoxy has condemned or discounted.
To recap: in the manuscript, A Certain Quantity of Work to Be Done, I develop the following theses:
- The lump-of-labor fallacy claim is not a substantive argument but a performative one that disavows and projects the unacknowledged and now illicit founding premise of the economists’ own core commitment – sometimes fervent, sometime reluctant – to the intrinsic rationality and benevolence (or at least, “efficiency”) of private property and market exchange.
- This core commitment emerged, along with its accompanying storyline, in early modern natural law political thought from the same mold as rational theodicy with which it shared both its optimism and founding premise of a static universe in which there was a “fixed amount of happiness” at any given time (Machiavelli) and one man’s profit was another’s loss (Montaigne).
- The metaphysical “mechanisms” purportedly producing public benefits from private vices, the invisible hand that leads people to contribute to the public good although they have only their self-interest at heart, the process by which the volume of trade and prices “find their own level” – in short, the hypothesis of equilibrium, are deductions from the zero-sum “conservation principle” of a closed system.
- The defects and pitfalls of rational theodicy have been analyzed, criticized and satirized by philosophers from Voltaire and Kant to Sartre and Levinas, the latter two specifically in the context of the industrially-augmented atrocities of the 20th century. The large debt of economic thought to theodicy has also by discussed by Joseph Vogl, John Milbank and others. My original contribution is to trace the process of disavowal and projection that has both insulated economics from scrutiny of its hypocritical fealty to a noisily disavowed premise and stymied efforts to establish alternatives to an ethically-bankrupt, intellectually-moribund status quo.
- Maurice Dobb and Robert Hoxie are two economists who defended the positions that mainstream economists derided as fallacious. Ira Steward’s eight-hour theory was disparaged by the orthodox. Although Sydney J. Chapman’s theory of the hours of labor was at one time considered canonical, it too was unceremoniously substituted by a view more congenial to the mathematical modeling of mid-20th century macroeconomics.
- Building on the insights of these authors — and of Marx, who explicitly rejected vulgar political economy’s “so-called labour fund” – I have proposed the perspective of labor power as a common-pool resource. From this perspective, In the final chapters, I analyze how long hours of work “immiserate” workers subjected to them and how progressive reduction of the hours of work might be used as a policy to reduce greenhouse gas emissions and thus combat climate change.
According to James McCleary in 1912, there was an “oft-repeated error” behind statements from union leaders made to the congressional committee on labor, which he sat on. “It was rarely if ever put into words, but it was the unspoken major premise of many an attempted syllogism, the unstated basis of many an appeal.” A half century later, steel industry executive William Caples stated that the alleged error was “one of the most tenaciously held and generally least articulated of trade union beliefs…
I have researched the lump-of-labour fallacy and its surrogates, and would have to concur with McCleary and Caples about the lack of articulation of a belief that is presumably so widespread. I wonder if you can help me out here? Can you cite statements from advocates of work-sharing, for example, that clearly demonstrate a belief in a “fixed amount of work”? And, no, that wouldn’t include statements advocating a certain policy that you infer “implies” such a belief.
In “A Certain Quantity of Work to Be Done” I cite half a dozen examples of orthodox political economists stating precisely that phrase or a close approximation of it as an empirical premise — and not a hypothetical one. Can you find just one from the labor side?
It seems to me that you leave little room for the possibility that the lump of labor fallacy can be correctly used in an argument, but is often not.
Most references to the fallacy seem to follow a straw man fallacy by the arguer, but it need not be so. If the Roosevelt Institution is actually suggesting policies to help reduce the disruption for people displaced by automation rather than applying misdirection …
It seems to me that you are skimming to get (what you think is) the drift and then raising an objection to something that is tangential to my argument. Mark Paul’s article does indeed offer policy suggestions that could IF IMPLEMENTED reduce the displacement from technological change. One of those suggestions happens to be WORK SHARING. The main target of lump-of-labor fallacy claim over the last 120 years has been proposals for “work sharing.” Can you not see the irony in that? In terms of policy, I don’t find his discussion objectionable but it is also unexceptionable, if you’ll pardon the expression, milquetoast tinkering. Would I rater see milquetoast tinkering than tax cuts for billionaires and slashing medicare? Sure.
But it seems to me you have not caught my drift. What I am saying is that the fallacy claim is a PROJECTION of the economists’ own, DISAVOWED first premise. The idea that supply and demand tend toward equilibrium is derived from a hypothetical steady-state model. The idea that strictly self-interested actions are led by an “invisible hand” (market mechanism) to render the public good is derived from a hypothetical steady-state model. A lump of labor, if you will. These derivations are then simply ASSUMED to accurately approximate what happens in a dynamic market economy. That supposedly dynamic economy is then offered as a rebuttal to non-market interventions that, it is alleged, are based on a lump-of-labor fallacy because they lack faith in the very market mechanisms that I described above.
I realize mine is a difficult counter-argument to follow, partly because I am dealing with an argument that is a performance, not a logical syllogism. During that performance the economist changes positions and masks. Again, the fallacy claim is a PROJECTION of the economists’ own, DISAVOWED first premise. In effect, the economist climbs up a ladder to a platform, kicks out the ladder and proclaims that anyone who tries to climb up the ladder is committing a fallacy. The only permitted perspective is “assume a platform.”
Tangential, definitely. Skimming, guilty. Even more so, filtered by my own notions about economists arguing lump of labor.
I think Mark Paul should be able to realize that someone holding a sign saying “Robots are stealing ALL our jobs” probably does not believe that literally. He should look at what that person is advocating instead of asserting that the sign indicates the holder has bought into a fallacy.
Particularly in the area of work sharing I am more inclined to believe that the fallacy claim is used to deflect from meaningful policy discussion than that it reveals the claimants beliefs. I think progress is more likely by saying “Fine, I don’t really believe there is a fixed number of hours of work available, but I still believe work sharing is valuable.”
If I put in place a programmable 5-axis CNC in a cell type placement, what does this represent with regard to Labor? If I reduce a 30 day lot size to 15 days across a series of separately placed machines in a plant, how might this effect inventory, the movement of material, and throughput from beginning to end? There is definitely am impact with the usage of automated equipment in place of Automatics (6 and 8 spindle Bullards, etc.) and manuals (turret lathes, drill presses, etc.) which in the end impact Labor besides the movement of material between operations (forklifts, etc.) and warehouse personnel. In each example, the need for Labor is reduced in those job functions.
Economists do not talk about jobs being replaced with similar jobs and those jobs which remain labor intensive tend to leave for labor intensive countries in Asia. What is left is Service related jobs of which much of the Labor is untrained for and in that period of life may remain untrained. Clearly job sharing would alleviate much of the issue as the >40 hour week is not needed today with the Capital in place as well as the process changes (later). it would also do much to supply the revenue to societal needs (SS, Medicare, Workman’s Comp., Unemployment, etc.) which have been paid previously as Overhead burdening Labor to operating a business in the US.
My old Econ Prof. recognizes my argument; but, it is still a Lump of Labor argument coming from the field. Surprisingly they wish me to come and talk about my experiences.
In your example with Automatics and manuals, you need to compare the effort to build the equipment. Then you need to consider the impact of the change in demand due to the change in price/cost. Then follow where the butterflies wings take you from there. While you are at it trying to model this transient behavior you can tell me how the increasing population comes into play.
You are not the least wrong that the field is wrong as it keeps arguing Lump of Labor. The fallacy is a very narrowly defined thing which they keep trotting out to cover a very wide subject. I think they derive satisfaction out of being convinced they have part of it correct. That desire to be correct can exist in hard core market types and in even the most progressive economist (or manufacturing engineer).
It was an actual project where we gave the estimates of savings from a 1 week study before hired. Either you improve throughput to lower cost to match competitor(s) or beat them or die. Much was improvement in equipment and rearranged shop floor. There are other issues too. Consider pollution (not just air) in China, Child Labor in Thailand, lack of employer sponsored healthcare other than a nurse on staff, etc. That is a cost on us too.
The latter (earlier comment) was an answer I gave to improve delivery on the first day I toured. You should have heard the excuses. I proved it to them using their shop floor numbers and stations. 80% of the time was sit-around time. 10-12% transit time and 8-10% actual production time. It was a sea 0f inventory. Not quite a Toyoda production system with Lot Size of one and done in families. It was a start for them. To get their equipment aligned with the smaller Lot size there was a bit of LSS to eliminate excessive waste in setup.
If burdened Labor is the large cost, then eliminate the actual Labor and the Overhead goes with it. Less Labor, less Overhead, and still the Material Cost. Unburdened Labor today in manufacturing is the smallest portion. Population does not come into play with increased livelihood, which is the issue. Capital absorbs most of the productivity gains.
Population? Shorten the work week to 30 Hours at the same income. Mr. Sandwichman will tell you it will increase Labor cost; But I would say, it will still be the smallest cost. More off time equals greater and more efficient productivity which does help to lower cost.
Mr Martin Ford of The Lights In The Tunnel used to hang around here. He had the right answer and few believed him.
Perhaps it would be more accurate to talk about temporary lumps of labor. That is, within any particular time and space, there are just so many available jobs that will support families or individuals at a reasonable level within reasonable commuting distance for unskilled or minimally skilled individuals. It really isn’t realistic to expect large numbers of people to repeatedly relocate their families over significant distances to meet shifting labor demands. In short, there’s a lump of truth in the lump of labor idea.
Yes, that is more or less the argument that Robert Hoxie put forward in his discussion of what he called “fixed group demand theory.”