:: The Rational Radical Blog ::

Wednesday, October 08, 2003

Lumps of Labor

Economists call it the 'lump of labor fallacy.' It's the idea that there is a fixed amount of work to be done in the world, so any increase in the amount each worker can produce reduces the number of available jobs. (A famous example: those dire warnings in the 1950's that automation would lead to mass unemployment.) As the derisive name suggests, it's an idea economists view with contempt, yet the fallacy makes a comeback whenever the economy is sluggish.

The "lump of labor" concept is valid when applied to jobs necessary for our society to function -- providing basic food, clothing, shelter etc. A tiny fraction of the population now can provide us with those essentials. All the rest of us work at jobs created by advertising-induced "demand" for a supply of more and more stuff we don't really need.

Jack Clark 10:39 PM [+]   
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