Lump of Labour Fallacy - Origins

Origins

The phrase was originally used to dismiss the claim that reducing the number of hours that employees are allowed to work in a day inevitably reduces unemployment. This claim is based on the following reasoning:

  1. The number of hours of labour per day that are demanded by the market is constant.
  2. Suppose we reduce the hours any single person can work in a day.
  3. Now workers will produce fewer hours of labour.
  4. The difference between the constant in (1) and the reduction of productivity in (3) must be made up by employing more workers.
  5. Therefore the strategy in (2) increases employment rates.

The lump of labour rebuttal argues that (1) is false. (1) is the basis of a Straw Man argument. In all historical real-world economies, the number of hours of labour per day has always been, and always is, subject to natural variation. Thus (1) is an inadmissible claim to make in present-day economics when describing processes that are applicable to the real world. A common superficially similar yet unequivalent position to (1) is at times taken by credentialed economists: namely that at certain specific moments in time, in certain areas, the number of hours of labour per day that are demanded by the market does not vary to the threshold required for statistical significance. The Straw Man argument continues as follows: given that there is naturally an administrative cost to hiring more workers, there is no reason to expect that production will be unchanged. People may simply keep their present employees and work them harder for the same time, or find ways to cope with the reduced output.

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