[p2p-research] Is the "lump of labor fallacy" itself a fallacy? (was re: article by Hazel Henderson)

Kevin Carson free.market.anticapitalist at gmail.com
Fri Nov 27 20:02:25 CET 2009

On 11/25/09, Paul D. Fernhout <pdfernhout at kurtz-fernhout.com> wrote:

>  The "lump of labor fallacy" is why mainstream economists will say
> unemployment from green energy being more efficient is not a problem:
>   http://en.wikipedia.org/wiki/Lump_of_labor_fallacy
>  But, I feel that "fallacy" is itself a fallacy, because of limited demand
> by healthy people, or at least, demand growing slower than increasing
> capacity. :-)

The LL fallacy has been tirelessly combated by Tom Walker:

>  But this is what someone like Paul Krugman says on it:
>   "Lumps of Labor"
>   http://www.pkarchive.org/column/100703.html
>  "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."

But wait--Krugman himself is a little wobbly on the issue:

"To be more specific: the severe housing slump we’re experiencing now
will end eventually, but the immense Bush-era housing boom won’t be
repeated. Consumers will eventually regain some of their confidence,
but they won’t spend the way they did in 2005-2007, when many people
were using their houses as ATMs, and the savings rate dropped nearly
to zero.

"So what will support the economy if cautious consumers and humbled
homebuilders aren’t up to the job?"

Kevin Carson
Center for a Stateless Society http://c4ss.org
Mutualist Blog:  Free Market Anti-Capitalism
Studies in Mutualist Political Economy
Organization Theory:  A Libertarian Perspective

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