Peter Coy fantasizes that he is imparting eternal wisdom when he boilerplates:
"The idea that older workers displace younger ones assumes that there’s a fixed amount of work to be done. That’s known as the lump-of-labor fallacy—and it’s at play in the anti-immigration camp as well. By and large, economies don’t work that way. Workers earn incomes and spend the money and the recipients of the money hire more people and off we go. Growth."Indeed there is not a fixed amount of work to be done! In fact, between December 2007 and June 2009 six and a half MILLION jobs disappeared. Thus, there is not a fixed amount of work but a diminishing amount. By and large, economies don't work... the way economists pretend they do. Workers' incomes stagnate and debt soars and the recipients of the money repackage subprime mortgages as collateralized debt obligations and off we go. Collapse. ("But who could have known???")
As for that alleged lump-of-labor fallacy...
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Thanks for the link!
"Thus, there is not a fixed amount of work but a diminishing amount. By and large, economies don't work... the way economists pretend they do. Workers' incomes stagnate and debt soars and the recipients of the money repackage subprime mortgages as collateralized debt obligations and off we go. Collapse."
Could there be a link between work diminshing, income stagnating, and resistance to shorter hours of work? It seems to me that precisely the factor which contributes to stagnating incomes, also makes the idea of shorter hours unpalatable, since, in common wisdom, hours of work and income are connected: income = hourly wage x total hours.
The idea that less superfluous work would not affect real income certainly does not figure in political-economy, and I would suspect, in the popular understanding as well.
If so, this does not bode well for popular support for shorter working time, and a catastrophe is almost assured.
Could there be a link between work diminishing, income stagnating, and resistance to shorter hours of work?
I would think so. Wage rates are heavily 'customary' so efficiency gains that result from shorter hours typically go to the employer, at least in the short run. The perceived income effect for the worker is thus of a cut in total pay proportional to the cut in hours, even though there isn't a proportional decline in output. It's "not fair". That's the rationale behind the slogan "shorter hours with no cut in pay." The problem with the latter slogan, though, is that increases in output per hour may not completely compensate for shorter hours... and they take time to materialize.
The "rational" thing to do would be to phase in over time, an at first partially compensating wage increase, which would eventually become a wage increase (or further cut in hours) as productivity continued to rise. All this can be modeled on a spreadsheet but I've only had one take-up on the proposition.
There is definitely a need for a theory of inflation within the shorter working time community. Marxism has an implicit a explanation of inflation that is to be inferred from the relationship between value and price. And, it is curious that we have experienced a secular inflationary trend since gold was severed from money in 1933.
With that explanation, it is possible to decisively link the secular rise in prices to the accumulation of superfluous labor time within the economy. Such a link would demonstrate why the economy should respond to shorter working time in much that same fashion as would be expected in the case of persistent and permanent high unemployment: deflation of prices. This would show that real income would remain stable despite the fall in nominal income created by fewer hours of work.
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