Saturday, May 5, 2018

200 Years, 200 Dollars!

In celebration of Karl Marx's 200th birthday, Sandwichman is offering a $200 (Canadian) prize to the first person who answers the following two-part question: 

In what passage of The Wealth of Nations did Adam Smith commit the lump-of-labor fallacy (i.e., assume a fixed amount of work to be done) and in what passage of Capital did Karl Marx disparage the assumption as dogma and prejudice?

Post your answers in comments.


Anonymous said...

The general industry of the society never can exceed what the capital of the society can employ. As the number of workmen that can be kept in employment by any particular person must bear a certain proportion to his capital, so the number of those that can be continually employed by all the members of a great society must bear a certain proportion to the whole capital of that society, and never can exceed that proportion. No regulation of commerce can increase the quantity of industry in any society beyond what its capital can maintain. It can only divert a part of it into a direction into which it might not otherwise have gone; and it is by no means certain that this artificial direction is likely to be more advantageous to the society than that into which it would have gone of its own accord.

Anonymous said...

Progressive Production of a Relative surplus population or Industrial Reserve Army

But if a surplus labouring population is a necessary product of accumulation or of the development of wealth on a capitalist basis, this surplus population becomes, conversely, the lever of capitalistic accumulation, nay, a condition of existence of the capitalist mode of production. It forms a disposable industrial reserve army, that belongs to capital quite as absolutely as if the latter had bred it at its own cost. Independently of the limits of the actual increase of population, it creates, for the changing needs of the self-expansion of capital, a mass of human material always ready for exploitation.

Anonymous said...

If our friend Weston's fixed idea of a fixed amount of wages, a fixed amount of production, a fixed degree of the productive power of labour, a fixed and permanent will of the capitalist, and all his other fixedness and finality were correct, Professor Senior's woeful forebodings would been right, and Robert Owen, who already in 1816 proclaimed a general limitation of the working day the first preparatory step to the emancipation of the working class, and actually in the teeth of the general prejudice inaugurated it on his own hook in his cotton factory at New Lanark, would have been wrong.

Sandwichman said...

UPDATE: who is "anonymous"? Are all three comments from the same anonymous? I can be contacted at lumpofllabor[at]gmail[dot]com if anonymous(es) would like to discretely identify her/his/their self.

Anonymous said...

Capital strikes me as having many passages of the sort that would fit as a refuting of Adam Smith in this matter, but what specific passage Sandwichman is thinking of I do not know. said...

Actually that first Smith quote is not precisely a statement of the lump of labour argument, although it is very close. The reason it is not is that while it does not specifically recognize the case, it does not rule out the possibility that there might be some unemployed capital, perhaps associated with an owner currently lacking financing or markets, who is not hiring labor. What the statement clearly asserts is an upper limit on employment given by the capital, but not an absolutely fixed amount of employment, although it does suggest that most of what can be done is reshuffling workers around between sectors.

Jerry Brown said...

So did anybody win the reward?

AXEC / E.K-H said...

200 years in the dark ― how Marx got it wrong

Note on Sandwichman’s ‘200 Years, 200 Dollars!’

Sandwichman asks: “In what passage of The Wealth of Nations did Adam Smith commit the lump-of-labor fallacy … and in what passage of Capital did Karl Marx disparage the assumption as dogma and prejudice?”

The Wealth of Nations passage is about the limitationality of the production factors labor and capital which was later on simply defined away with the well-behaved production function and full substitutionality.

The Marxian argument is inconsistent. The Labour Theory of Value says that the lengthening of labor time increases surplus value. By the same logic, it should be advantageous to employ workers to the point of full-employment because maximum labor time = maximum exploitation = maximum surplus value.

Confronted with persistent unemployment in the capitalist economy, Marxians came up with the reserve army argument, that is, unemployment is necessary to prevent wages from rising and profits from falling.

This argument is false because the axiomatically correct profit theory tells everybody that macroeconomic profit is determined in the most elementary case by dissaving = growth of household sector debt and NOT exploitation and that there is NO antagonism between wages and profits for the economy as a whole.#1, #2, #3

Because profit theory is false, the whole analytical superstructure of Capital is false. Same for Smith’s Wealth of Nations. Economists in general and Marxians, in particular, did not realize this in the last 200 years. Nothing to celebrate on Marx’s bicentennial but the persistence of economists’ stupidity and fraud.#4

#1 Profit for Marxists

#2 Capitalism, poverty, exploitation, and cross-over exploitation

#3 Ricardo and the invention of class war

#4 Economists: political trolls since 200+ years

Sandwichman said...


Not yet. I think I will have to put a deadline on it so I can post the "correct" answer if no one wins. One more week? 10:30 am (pdt), May 16, 2018. said...

And Egmont certainly is not going to win the prize, :-).

Sandwichman said...

Egmont has not posted the correct answer. If he does post it first, he'll win the prize. I doubt he would stoop to conforming to someone else's contest rules, though.

AXEC / E.K-H said...


Both, Smith’s and Marx’s employment theories were false. To incessantly recycle this dead stuff#1 and to make a quiz show out of it is an act of anti-scientific disinformation a.k.a. political economics.

Egmont Kakarot-Handtke

#1 End of the Lump-of-Labor sitcom

Sandwichman said...

If I thought as lowly of someone's ideas as Egmont CLAIMS to think of mine I would not waste my time posting to their blog. Egmont says he deplores Barkley and I but I think he secretly admires us.