The Economist, flagellates its favourite lump --

Eat your NAFTA. (cover story)
Economist, 11/13/93, Vol. 329 Issue 7837, p15

Mr Perot and the anti-NAFTA zealots are wrong in the ways protectionists have always been wrong, as well as in new ways entirely of their own devising (see pages 21-26). Nearly all of these mistakes boil down in the end to the most enduring of all economic fallacies: the idea that there is only so much output to be produced, or capital to be invested. (Europe is currently preoccupied with the "lump of labour" version of this mistake, see page 18.[excerpt below])

Sharing the burden.
Economist, 11/13/93, Vol. 329 Issue 7837, p18

It sounds fairer to share out a given amount of work evenly. But this begs two questions. Is the amount of work given? And how should it be shared out? The quantity of work is not fixed: such a notion is known to economists as the "lump-of-labour" fallacy. If European labour markets were not jammed by minimum wages and over- generous social benefits, employment would be higher. Indeed, if shorter hours and longer holidays reduced joblessness, Europe would now enjoy the world's lowest unemployment. West Europeans work, on average, 10% fewer hours each year than Americans, and 20% fewer than the Japanese. Yet the EC's unemployment rate is 11%, America's 7% and Japan's less than 3%.

A world without jobs?
Economist, 2/11/95, Vol. 334 Issue 7901, p21

Next, some theory. A new machine helps you make more stuff with fewer people. But the assumption that this results in fewer jobs rather than more output (and hence more goods, and more job-stimulating demand, in a beautifully virtuous circle) is based on an economic fallacy known as the "lump of labour": the notion that there is only a fixed amount of output (and hence work) to go round. This is clearly wrong. Technology creates new demand, either by increasing productivity and hence real incomes, or by creating new goods.

One lump or two?
Economist, 11/25/95, Vol. 337 Issue 7942, p67

Along with these simple "explanations" comes an outpouring of simple "cures": why not cut working hours so that there are more jobs to go round, or keep out cheap imports or foreign workers? There is a common fallacy at the bottom of both explanations and cures. It is that the output of an economy, and hence the amount of work available, is fixed. Both history and common sense show that it is not. Economists call this the lump of labour (or sometimes the lump of output) fallacy.

Cranks and proud of it.
Economist, 1/20/96, Vol. 338 Issue 7949, p86

Luddism is also commonly linked to the lump-of-labour fallacy in economics, which first-year students are taught to refute and according to which, as the demand for labour is fixed in the short run, labour-saving machinery is bound to "kill jobs''.

The end of work?
Economist, 9/28/96, Vol. 340 Issue 7985, Supplement, p19

An orthodox economist's reply might run something like this: yes, a new machine will probably reduce the amount of labour required to produce a given volume of output. But to conclude from this that overall employment will decline is to succumb to the lump-of-labour fallacy: the long-disproved idea that there is only a fixed amount of output (and hence work) to go round. Technology itself boosts output and creates new demand, either by increasing productivity and hence real incomes, or by creating new products. Video-cassette recorders, mobile phones, Sony Walkmans and soft contact lenses barely existed 20 years ago. Such new industries have created new demand and new jobs.

Europe hits a brick wall.
Economist, 04/05/97, Vol. 343 Issue 8011, p21

The left has said that it will create jobs in France by reducing the working week from 39 hours to 35. That way, the thinking goes, the available work will be divided between more people. This is a classic lump-of-labour fallacy (the idea that there is a fixed quantity of work and that if you take a job it is at my expense). In reality, the demand for labour changes all the time as a result of productivity and the workings of the labour market. For all sorts of reasons a cut in the working week would reduce productivity. Thus a policy designed to create jobs would end up destroying them.

One lump or two?
Economist, 10/25/97, Vol. 345 Issue 8040, p17

It is depressing that supposedly responsible governments continue to pretend to be unaware of the old "lump of labour'' fallacy: the illusion that the output of an economy and hence the total amount of work available are fixed. In fact the demand for labour depends upon productivity and wage costs. Fewer hours will create more jobs only if weekly pay is also cut-which workers tend to resist. Moreover, recruitment, training and other fixed costs can make it more expensive for a firm to employ a larger workforce for shorter hours than a smaller one for longer hours. Worse still, shorter hours may reduce a firm's productivity if it becomes more difficult to co-ordinate a bigger workforce. Shorter working hours may therefore cause output and jobs to fall.

Short measure.
Economist, 01/31/98, Vol. 346 Issue 8053, p79

This "cure'' for unemployment is based on the assumption that an economy's output is fixed. If this were true, then the amount of labour required would also be fixed, so it would seem reasonable enough to share out available work more evenly. Economists call this the "lump-of- labour'' fallacy. It is a fallacy because, in reality, the demand for labour depends upon labour costs and productivity, which are affected by the hours each employee works.
"With the question of the length of the working-day we have nothing here to do."
-- David F. Schloss
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