今日、労働塊の誤謬について知りました。これは、経済においてなされるべき仕事の量は有限であり、その仕事を分配することで、より多くの、またはより少ない雇用が創出できるという誤った考え方です。
労働量固定説は誤りだった！仕事を分け与えても雇用は増えないってマジ！？
挿話
挿話
挿話今日、労働塊の誤謬について知りました。これは、経済においてなされるべき仕事の量は有限であり、その仕事を分配することで、より多くの、またはより少ない雇用が創出できるという誤った考え方です。
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Similar fallacy with money. People thinking that massive infrastructure projects are a “waste of money” … where do you guys think that money goes
There is finite amount of workers which can perform labor though.
Also, If you live in a town with only one factory there really can be a job shortage. Investment may not necessarily come back to create more jobs for you. It could go somewhere else entirely.
Something that destroys jobs in one place or industry but creates them in another looks different depending on whether you’re an economist looking at national statistics or a middle-aged blue-collar worker whose hometown just lost its reason for existing.
So many fallacies and misconceptions like this, here’s a few that took far too long before they clicked with me:
The multiplier effect of money in an economy, e.g. you get a haircut and pay the hairdresser 20 quid, he then pays the butcher 15 quid for meat, who then pays 10 for groceries and so on
Government expenditure often goes back into the economy. They could give e.g. 10k to each person and it’s not like the money has disappeared – a significant chunk goes back into the economy via public spending and back to the state coffers via taxations (e.g. sales tax)
Wealth is generated, there isn’t some “fixed” amount of it in the world which is divided in portions.
National debt is not like personal debt that “has to be paid off”. Indeed it can be too high, but a certain level of it is relatively healthy, e.g. Norway could pay it’s nat. debt off four or five times over but needs it maintain the normal running of the economy
Money sitting in a bank is slowly decreasing in value (by around 2% per year in a normal year). Which is why people invest.
Pensions aren’t some magic machine, it’s simply money invested in the stock market and bonds. Which themselves just slightly outperform (historically) that slow 2% decrease in money’s value every year.
Rich people don’t typically have some vault of cash like Scrooge-McDuck, instead they have it invested. Quite often in shares and bonds and other investments which can boost the economy.
There are of course caveats to all of these points, but I’m just keeping it simple and yes it took me far too long in life to realise many of them.
This is very common in low-trust societies like those in the Balkans, which were feudal before adopting industrial technology – but skipped the whole societal part which led to industrialization in developed countries in the first place.
So, there is this deeply ingrained belief that there is a fixed number of jobs, and also that there is a fixed amount of money in the economy.
This is also implied in the tenets of Marxism as well, so entire generations were raised to take this for granted – and they didn’t stop thinking this even after communism had disintegrated.
This is why every single post-communist country is obsessively anti-immigration, and also why communist countries have no idea what to do about inflation – this was never envisioned in the script.
Cognitive linguistics says people perceive the world through metaphors, which are reinforced and communicated via language.
My personal theory is that this comes from the fact that people in low-trust societies apply the metaphor of feudal i.e. agricultural economy to *all* economy.
They perceive all economy as rent economy, that is, that the only way to earn money is by owning land or extracting resources – and since both of these are obviously finite, therefore all economic activity has limits.
Any form of economy that creates value in any other way is literally unimaginable, because language literally lacks expressions to describe it.
I don’t know the source or if I’m even remembering the correct number, but I seem to recall hearing that am average of 1.2 jobs are created for every person who is newly employed.
One problem with the fallacy though is that people don’t realize that it’s talking about how this applies to *the economy* not to individual businesses. The economy doesn’t have a finite amount of work to be done, but individual businesses absolutely do. So what happens with new disruptive technologies (not just AI, but computers, databases, Excel, etc) is that those technologies reduce the amount of work that needs to be done *by a company* who can then layoff any excess employees. However, that increases unemployment and the therefore the supply of labor to *the economy*, so other businesses are now able to hire these workers at a cheaper rate than they would have previously which may make new projects worth pursuing if they are now more affordable. So the economy as a whole can still find more work even if an individual company can’t.
This seems like an exceptionally hollow “fallacy”. The commenter below regarding NAFTA is right.
You can have absolutely no hate in your heart towards immigrants and still recognize that bringing in people to perform jobs that could otherwise be performed by American citizens innately increases the volume of the labor pool and has a downwards effect on wages, period. You don’t have to think bad things about people to be concerned about it.
I’m deeply frightened by a lot of things going on in the country and am very much a person based on name and heritage who might get stopped on reentry despite being a citizen – and I **still** think there is validity to the core problem. The problem is that the argument has been bastardized and distorted by hate, racism, and nativism.
But you can still want to prioritize American workers. The vast majority of things in the Actual, Real World that the rest of us non-economists live in consist of actually finite supply, finite demand, finite ability to retrain due to a finite quantity of Years of Potential Life Lost in a given sunk cost/path of education or training. There is even finite will for consumption, and finite attention. The real world is governed by real geographic, physiological, material and psychological parameters and pretending “No we’ll just make new jobs dummy” when labor is automated and reduced, **when that clearly is not happening and wealth continues to concentrate over the past half-century**, is peak assholery. It is a straight up fucking lie.
Wealth is not a zero sum game, but economists take an admittance of that to mean, “wealth could theoretically increase at an infinite rate for infinitely long, and anybody who says otherwise is just dumb”. Wealth can be created, but the pattern of its’ distribution can be so aggressively lopsided in real terms that, for the median person, it effectively is not increasing.
People with significant appreciable assets live in a world where wealth isn’t a zero sum game. The rest of us generally do not.
This + bigotry explains the entire immigration panic
The term “job creator” has always pissed me off but it’s hard to describe why because most people are brought up with the idea that a person is first and foremost a deficit. They’re taught that a person has to prove that they are worthy of resources they consume and so a person who “creates a job” for them is doing something noble by giving them the opportunity to deserve to live.
The big problem, or one of them, is that those “job creators” have positioned themselves to be able to dictate how much work a person needs to do to prove themselves worthy of living. So by constantly, artificially, raising that cost people work harder to create more and more for the “job creators” to consume. And because most of us are conditioned to see ourselves as inherently undeserving we feel nothing when we see these people consume the fruits of our labor because we’ve come to understand them as the ones who are capable of determining who is deserving and feel grateful that they’ve chosen us.
, x
There are a couple of problems with this idea.
Firstly, the focus on this suggested misunderstanding is inherently a strawman fallacy used by proponents of the economy as it currently exists. Many of us aren’t worried that economic and technological advancement will literally lead to fewer jobs, we’re worried that it will lead to *worse* jobs, *lower* quality of life, and an increasingly authoritarian and oligarchical society because workers lose more and more sway and see the world and their own bodies becoming irreparably polluted as a direct result of economic growth pursuit.
Secondly, the economic model that this article shows and references is inherently unrealistic because it assumes that households are the ones initially owning resources, when in reality businesses are increasingly owning land, goods, and services themselves (workers who are completely reliant on their employments to avoid becoming immediately homeless can’t really be said to own their own labor, at least not for the immediate time being, and when labor is mechanized the business takes over more of that share as well).
Essentially this is often used in an economist’s attempt to point out one possible misunderstanding, itself a minor element of an ultimately valid set of concerns, and suggest that people should substantially change how they think. As capitalism continues to literally pollute our blood and brains, I think fewer and fewer people are going to be distracted by shit like this.
It’s only sort of a fallacy because it’s both true and not true. It’s true that in our economy everything currently gets done and there’s a set number of hours that that work takes but capitalism is not a great mediator of labor so instead of adding 1 persons 40 hours to the pile and taking 40 hours worth of work away from others capitalism creates new work to be done. This is why productivity continues to increase but wages stay stagnant and total employment continues to increase. If our economy was set up in a more efficient way the fallacy would not hold.
Also is it still fallacious if there is a breaking point where more labor of a certain type would saturate an industry and ultimately fail? Like “we don’t need any more sheep farmers because no one here is buying them” or is it just expected that a business like that would.pivot to something else without having to cut labor?
There’s always work to do, true, just the pay for the work is disproportionate.
People in the 19th and early 20th century thought we would eventually not have jobs due to the then rapid industrialization. What short sighted people fail to realize is, new jobs and entire industries will contunine to be made. Just look at jobs/job titles and entire industries that exist today that never existed 100 years ago or even 50 years ago.
50 years from now there will jobs that do not currently exist
Sounds like Mercantilism which was debunked hundreds of years ago. I mean… that was practically the basis of Adam Smith’s philosophy.
This is true, until you reach certain extremes.
In the 1920s there was a “share the work” movement in response to unemployment.
Right now we’ve had huge productivity gains, but the profits concentrated at the top.
Instead, redistribute and put everyone on a 3 day week for the same pay as a 5 day.
Isn’t this article committing the fallacy of false equivalency in the first paragraph? Not all labour is equally desirable, nor are people equally capable of engaging in all forms of labour. It is absurd to pretend that people can easily transition to a different job should their old tasks become obsolete. Certainly not impossible, but we generally don’t like doing hard things, and we dislike it even more when hard things are forced upon us.
They do this again in the second paragraph by comparing the history of industrial agriculture with that of… modern automation trends, I guess? They’re vague on just what they are supporting, but I assume it to be AI. Historical precedent doesn’t imply inevitability. Automation within agriculture did lead to different labour and industry, but that is no guarantee that automation in other industries will follow suit.
I’ve heard many people say that automation will take away the hard and dangerous tasks within any given industry. I think that was true once upon a time, but the focus has changed in recent years. Now automation takes away the basic tasks, once used to train the next generation of workers until they were ready to approach the more dangerous or difficult work of which automation remains incompetent. Administrative controls are used in place of fostering experience. If the new guy hurts themself or fucks up, “oh well. The safety cards and forms were all filled out, so the company is protected from legal ramifications. Man, sure is hard to find good workers these days, isn’t it?”
Why do it this way? Simple, it’s way cheaper. Most companies only care about profitability, because the people running them only care about stuffing their own pockets and walking away. Why think 50 years down the line when you can get your yacht in 3?
I’m not saying that we should dispose of the idea of automation, nor should certain industries be propped up in perpetuity, but we’d be wise to take the current propaganda big tech is dishing us regarding automation and AI with a large grain of salt. No consideration is being given to the long term future and the consequences this technology will have by those who are championing it.
Til supply and demand is a “fallacy” smh
It’s not entirely a fallacy… Restricting labor works at increasing the value of that labor. Otherwise unions and restrictive labor supply constraints (like only being able to graduate a certain number of doctors) wouldn’t work at keeping halfway decent wages.
The lump of labor fallacy is usually applied to two cases:
1. Immigration. Essentially, [“they took our jobs](https://www.youtube.com/watch?v=APo2p4-WXsc). The fallacy, here, is ignoring that immigrants also generate demand. They still have to eat and find housing, they still consume enterainment. Immigration should, in practice, have no impact on overall employment. That said, the effect might be felt at the industry-level if immigration is concentrated in some fields.
2. Technology. We currently see this with AI. In reality, technology simply changes what kind of work gets done. In the 1800s, around 90% of workers were farmer. As technology improved the productivity in that sector, worker shifted to other industries. AI will globally have the same impact. There’ll always been demand for labor, even if the type of labor in demand will vary over time.
This article briefly touches on this but doesn’t go much into it. The issue with something like AI is that even though it will create new jobs, many new jobs will be lower paying than the jobs lost. 5 white collar knowledge workers will become 1 knowledge worker with AI and 4 low paid data labelers.
The article tries to do some hand waving about ‘economic models’ saying everything will be magically fixed but we can look at real data since the computer revolution and see that productivity has gone up but average workers are getting a smaller and smaller piece of the pie. Our wages are worth less and less. AI will just increase this problem.
It’s based on supply and demand. When I was a factory worker in the late 80’s into the mid 90’s during my late teens out of high school and 20’s, we produced items, making expected quotas, until enough of a surplus was created that they no longer needed more made and would lay us off. After Clinton signed NAFTA and GATT, those same jobs were outsourced, eliminating an estimated 25 million positions throwing the United States from a strong manufacturing based economy into a weak service based economy. Many became homeless because of it, turning to drugs and alcohol to deal with it, unemployment heavily increased, while the costs of goods and services increased.
See, this I don’t get as an argument; the fallacy is only true to a limited extent, then it’s obviously false.
There really is only so much labor. More jobs are created to facilitate new industries, to a point, but we live in a universe of finites and there are a finite number of industries created with each change in technology. Money and labor are, in fact, finite. And the purpose of technology is to eliminate the need for labor anyway.
The entire argument over the fallacy is wrong because it’s incomplete, or with a too-narrow view.
See also “The Mythical Man-Month”.