Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Thursday, December 30, 2010

Moron the "Lump of Labor Fallacy" Fallacy

Over at AB, Tom the Sandwich Man has series of posts on the infamous "Lump of Labor Fallacy" fallacy, cross-posted at his own blog.  I'll post a complete series of links when it is complete.
In the first installment at AB, Andrew Biggs of the American Enterprise Institute made a long comment which contained this bit of brilliance:

. . . If the lump of labor view isn't a fallacy, that implies that it's simply impossible for the French to work as long as people in other countries do, . . .

My retort:

This is the kind of absolutist thinking that reduces economics to drivel.  If something is true, then it is IMPOSSIBLE, always and everywhere, for a contrary idea to be true.  That is why Austrian economists believed the Great Depression was the Great Vacation.  They couldn't recognize that real world economics differs across space and time, and the absolutes only work as special cases.  Thus, the condition in France proves that the LOLF is a correct concept.  Very pat.  Also a classic fallacy of composition.   
GDP growth has been dismal, but still positive over most of the past 10 years, yet employment has not kept pace, as Tom demonstrated with actual DATA, and unemployment is now sky high. Recent college graduates can't get jobs, and illegal immegrants are giving up and going back to their dismal homelands, because they are out of work here.   
Riddle me that LOLFer.  
Another reason the LOLF is a fallacy is that it attributes to nonbelievers a concept to which they do not actually subscribe:  that the number of jobs is fixed (more erroneous absolutist thinking.)   The reality is that there can be in certain times and places, an imbalance between workers and jobs available.  Clearly, that is the case now.  Nobody has to suppose that the number of jobs is X, to ten decimal places.  You only have to realize that the number of jobs is growing a) slower than the number of workers, b) not at all, or c) is in fact negative.  Any of these can easily happen in the real world.  
So, LOLF is itself a fallacy for two obvious reasons:  
1) It is based on a fallacy (of composition.)  
2) It dishonestly represents the position of the contrary point of view.  
Can I put a QED on this? 

Tom thought I could.

Note that Biggs, as Coberly pointed out at AB,  has made a career of contriving "well sounding rationalizations for destroying Social Security."  He is agenda-driven, not fact-driven.