Tuesday, July 21, 2015

Sherk 'n Burke?

at the Heritage Foundation:
Automation and Technology Increase Living Standards
by James Sherk and Lindsey Burke

Many Americans blah, blah, blah... 
Lump of Labor Fallacy 
Fears of mass technological unemployment are predicated on a “lump of labor” model of the economy—the belief the economy needs a roughly fixed amount of work performed.In this economic model, machines automating work formerly done by people reduce the total amount of work remaining for humans, reducing total employment. Keynes forecast an impending crisis of unwanted leisure. He suggested future societies would establish three-hour workdays to give everyone enough work to avoid boredom.
Almost all economists reject this model today. Economists have found that an almost unlimited amount of potential work exists in the economy because people’s material desires continue to expand. Virtually all Americans today enjoy material living standards vastly better than the wealthy of 1900. Nonetheless, most Americans today would purchase additional goods and services if they received a raise or bonus.

Sandwichman's lump-of-labor odyssey


Jack said...

I find two related issues interesting in regards to discussions of the "lump of labor" fallacy. On the one hand it is used to discredit an argument that has not been made by those accused of adhering to that fallacy. More importantly, especially in today's global labor market, is that those making the fallacy accusation never bother to address the actual concerns voiced by representatives of the labor market. That often being that what ever expansion of work that does occur is, and has for several decades now, been shifted to the lowest cost portions of that global market. On the other hand I may not understand the entire issue. Then again I'm not an economist trained in the more arcane language of political economy.

Sandwichman said...

"never bother to address the actual concerns voiced"

That is indeed the point, Jack. Change the topic, pose a red herring 'fallacy', dismiss the fallacy as a fallacy and move along.