Shorter working week redux

The Sandwichman is back from his pilgrimage to London and points North and, jet lag permitting will soon be posting some reflections at Ecological Headstand. It was a pleasure meeting Chris, Daniel Davies and a host of luminaries in the shorter working time racket.

While I was away, I received a remarkable reply to my critique (see http://www.lump-of-labor) of the lump-of-labour fallacy. My correspondent (who will remain anonymous pending a response to my request to cite him or her) offered the following explanation for not presenting evidence to support his or her convictions regarding the optimality of current hours arrangements:

“Of course I don’t provide evidence. It is self-evident. Suppose I work for you for 30 hours per week. Suppose you then find out that it would be much more effective to hire 2 people working for 15 hours each instead. Say, because marginal productivity declines very fast. Or because of complementary skills. Or whatever. Either way, what would you do? -You would split the job, of course. Why on earth would you need a government bureaucrat telling you to do you what is good for you? How likely is it that you don’t know how to achieve a productivity gain in your business, while some distant bureaucrat does know?”

Is the above “self evident”? I don’t think so.

It just occurs to me that “The Mythical Man Month” (see, e.g. the book of that title by Fred Brooks) is the software engineering equivalent of the econmists’ lump-of-labour fallacy:

if a computer program will take one programmer 2 months to write, it does not follow that two programmers can do it in one month. (e.g. there is added overhead because the programmers will need to communicate with each other, and some overheads will be doubled, like both of them will need to read through the projects specification documents).

I think the quote from Brooks is something like “Putting more programmers on a late project is like trying to put out a fire with kerosone.”

@SusanC
In fact, (snark follows) if they have Ph.D.’s (even more if they have Ph.D.’s in math or physics, and you may make substitutions as you like) two of them will take well over two months, because each of them will do the whole thing himself, at the end of which time they will discover it doesn’t work. It’s certainly not true that one person is always better than two, and three are always better than five, but Brooks’ Law mostly holds.

While it is undoubtedly true that there are some tasks that are indivisible, it doesn’t follow that there are no tasks that are divisible. Otherwise there would be no division of labour. In fact, the substitution of machines for workers is founded on the principle that some tasks are so divisible. Since the issue of the shorter work week pertains especially to the effects of labour-saving technology in automating tasks, witty allusions to nine women gestating a child in a month are strictly irrelevant digressions.

Sandwichman,
I think you are in danger of hijacking the thread – but isn’t the answer that there is not only a supply side of the market there is also a demand side. That is a calculation based on a single firm and a small set of workers is not the end of the story. There are externalities and there is the problem that a shorter work week for an individual means less income – no matter how efficient they are in that time. And there are co-ordination issues with other workers, and overhead costs in creating and maintaining an employment contract (so short term marginal costs may be a poor guide to total costs).

Sandwichman. Let me comment on your http://www.lump-of-labor.org/2011/12/whats-wrong-with-case-against-shorter.html here briefly.

First thanks for writing on and researching the history of that peculiar claim. I accept your basic objection against the fallacy claim:

“Whether the demand for labour increases, decreases or stays the same, the work can be divided up differently. Whether it would be advantageous to do so under some particular circumstances is an empirical question, not an a priori certainty or fallacy.”

But I don’t quite follow your reasoning in II on “explanations of the supposed fallacy”.

You there write:
“They are the assumption that, if true (but only if true), would vindicate the claim that the case for work-sharing is based on the assumption of a fixed amount of work” Followed by four bullet points (negations of the four points in your part I).

I don’t see how those assumptions (if they were true, which they aren’t) could do such vindication.

Rather, if any of those four points where true all that would show is that the specific case for work sharing you describe in part I would have one incorrect premise. But that premise would not be a fixed amount of work claim. It would be one of the four points in I.

Or am I missing something here?

As a final thought it seems to me that the “fallacy” talk by work time shortening critics must assume that all arguments for work time shortening are the same or all share one core feature. Isn’t that very assumption also important to challenge by more markedly pointing out the possible diversity of such arguments? If so then your “The case for shorter working time is based on a cluster of core propositions …” could better be phrased “One possible and prominent case for shorter working time is based on…”. In other words, I think you’re right to press that a case for work time shortening will in part depend on empirical questions. But it will also in part depend on a wide range of evaluative stances on welfare, distributive justice, the social bases of self respect, enviromental entities, community, meaningful work and much more. Different mixes of evaluative stances will lead to quite different arguments for work time shortening it would seem. And that is worth stressing as doing so might help in combatting the fallacy claim.

edo: “I don’t see how those assumptions (if they were true, which they aren’t) could do such vindication.”

I’m relying here on analysis I did back in 1999, so forgive me if I am a bit vague on it. Charles Beardsley wrote an article published in the 1890s refuting the fallacy claim made by John Rae, which, according to Beardsley’s critique, itself relied on the exact same assumption of a “fixed wages fund” that Rae purported to discover in the proposition he was criticizing (i.e., that work time reduction could relieve unemployment). My own argument followed similar lines.

The first bullet points in my analysis specify the environmental constraints of the standard production function — automatic adjustment of the economy, unlimited natural resources (due to frictionless substitution), given hours are optimal for output and a labor supply model based on income/leisure choice. Based on all of those assumptions being true, any movement away from the market-determined hours would hypothetically produce a sub-optimal outcome and thus reduce the demand for labor (the amount of work to be done) — with one exception, which is if the demand for labor doesn’t vary with change in the cost of labor (an economically absurd proposition). Relaxing any one of the four constraints invalidates the fallacy claim, however. I presented a mathematical model in my 2000 article to demonstrate.

Now, it would be possible to argue that work time reduction could still create more jobs even if labor demand was adversely affected — as long as people were willing to accept reduced aggregate consumption. That would be a matter of dividing up a smaller pie more equally, though, and thus would be criticized as economically inefficient. I don’t worship efficiency but I still prefer to stick to the economic case when refuting the fallacy claim.

Sandwichman: Thanks. So, to see if I get things right here, you argue that it would only make sense to acribe a “lump of labor” claim to work hour shortening proponents if
(1) the four claims in II are true (which they aren’t, we both agree on) AND
(2) if a background set of normative optimality assumptions from mainstream economics should be decisive norms in this context (which is highly debatable)

You argue that since (1) is false the fallacy ascription is wrong. I agree. I’d still like to see (2) made more explicit in the original reasoning. Since (2) involve contestable normative claims which I’d imagine at least some work hour shortening proponents wouldn’t accept.

Here’s how I’d like to phrase things. Imagine a society with two individuals A and B with this sequence of events:
(t1) A works 10 hours, B 0 hours.
(t2) society introduces a work hour shortening mandate capped at 5 hours
(t3) A works 4 hours, B works 4 hours (not 5/5 because of factor X in the economic system)

State t3 might be better than t1 for a number of reasons. The number of hours worked is less but since maximization of the sum total number of hours worked in the world is not the ultimate moral standard that is no decisive reason for t1 over t3. The t3 state may score higher in sum total hedonistic wellbeing, community, self-respect and social status.

(I think it is also a live possibility that t3 may score higher in revealed preference satisfaction if we compare satisfaction at t1 of preferences generated at t1 with satisfaction at t3 of preferences generated at t3. Which is not the same as investigating how the preferences generated at t1 are satisfied at t1 compare to at t3.)

“the “laws” of supply and demand were repealed back in 1869 when it was revealed they confused stocks and flows”

Further elaboration please. What happened in 1869?

“…the Mill recantation was a milestone.”

I suppose you could also say it was a Millstone… around the neck of the classical wages-fund doctrine.

“Promoting a shorter work week is a stalking horse for income Depression!”

My, my, someone’s been reading “Mr. Tufnell’s Report from Lancashire”!

http://ecologicalheadstand.blogspot.com/2012/01/man-vs-machine-mr-tufnells-report-from.html

Try:

(t1) Person A works 10 hrs, person B also works 10 hrs, person C works no hours, with A and B having equal contitions including opportunity for advancement.

(t3) Person A still works 10 hrs, person B now works 5 hrs and person C now works 5 hrs, with B and C having little opportunity for advancement.

Let us step back and look at the trend in consolidation of the number of employees and vendors providing productivity to business.

Employer as controller

There is an assumption that the issue in sharing jobs is the personnel employed accepting the arrangement. No, it is the Employer who is the controller of the issue. The hunt for efficiency (don’t give me more tasks to perform) and profit (less spending today makes management bonuses this quarter and this year) is reducing full time employment and pay in full and part time positions.

Management in private industry and government want less people and companies providing services that they use or are responsible for regulating. This is killing our economy by actively reducing the smaller businesses. Smaller businesses are more flexible but require more effort and oversight to receive services from and for the regulators to regulate. I reduced my departments budget this year give me my bonus! The economy, company, and livelihoods of employed may go to hell in the future but if I do not do this now my employment as manager is gone now.

The smaller businesses that fight taxes actually are putting themselves out of business. They should be fighting corruption, the breaking of law to give extraordinary profits to campaign contributors. There is no law that needs be observered if one has the right people in their pockets.

The government from top to bottom is making their departments more efficient. They are encouraging larger companies providing services to reduce their department costs of supervision and regulation.

Put reduction of full time jobs in you macroeconomic models and see the deflation of income and jobs that result while maximizing profits. I can also see this argument being used to defend income inequality in the political science papers arguing Oligarchy is compatible with Democracy.

Terms to remember:

Efficient
One who takes resources from others passing on the effort and costs to another’s budget to make their budget look better
X is so efficient that the rest of us are overloaded with work.

Ideal
It is a situation for maximizing benefits and/or money to the one speaking the word and passing expenses that do not come out of their budget, company or pockets to others.
This term is usually mixed up with the term I Deal as in I deal or I control the situation; if another person or company attempts to negotiate it the response to ideal there usually no deal.

Let me state that this discussion is antithetical to achieving employment that allows a health living for the society. One can pick and chose examples but the issue is not the example but the whole of the masses of employees expected to work (call it sharecroping or dare one call it slavery) in these arrangements.