LUMP = LOAF = CAKE

Jock and I go back a ways. We debated each other on radio and in print. It was from reading Jock's op-ed piece ten years ago that I first learned of the lump-of-labor fallacy claim. That's how we met, actually. I wrote to him to ask him to ask him to explain and to tell him it didn't make any sense. He graciously explained it to me. It still didn't make any sense.

Incidentally, Jock is also a member of the advisory group for the BC Progress Board. The executive director of the Board, Tim McEwan, used to work at the Business Council under Jock. Small world.

So while I was getting ready to head downtown to present the cake, it occurred to me that "you can't have your cake and eat it too" is a zero-sum claim. It assumes that there is a fixed amount of cake. The lump-of-labor fallacy is also about a zero-sum assumption, that there is a fixed amount of work.

To make things abundantly clear, Jock Finlayson says that advocates of shorter work time are wrong because they assume there is only a fixed amount of work but they are also wrong because they don't assume there is a fixed amount of "cake" -- with cake presumably serving as a metaphor for income + leisure.

This brings me back to my argument, that leisure is a factor of production and that it is simply wrong to treat leisure as a "normal good" such that the sum of income and leisure is a constant. In fact, when the current hours of work are "too long" (an empirical matter that can only be determined by experience) increasing the amount of leisure will increase the value of the total. In the extreme case, it could even increase the income too. Or, to put it more simply, you can have your cake and eat it, too. This is not to say you can always have it -- it is still an empirical question whether the given hours of work are "too long" but that at least is the implication of Chapman's theory.

ONE MORE SLICE?

John Maynard Keynes also discussed cake at length in his Economic Consequences of the Peace:

"The immense accumulations of fixed capital which, to the great benefit of mankind, were built up during the half century before the war [World War I], could never have come about in a Society where wealth was divided equitably. The railways of the world, which that age built as a monument to posterity, were, not less than the Pyramids of Egypt, the work of labor which was not free to consume in immediate enjoyment the full equivalent of its efforts.

"Thus this remarkable system depended for its growth on a double bluff or deception. On the one hand the laboring classes accepted from ignorance or powerlessness, or were compelled, persuaded, or cajoled by custom, convention, authority, and the well-established order of Society into accepting, a situation in which they could call their own very little of the cake that they and Nature and the capitalists were co-operating to produce. And on the other hand the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice. The duty of "saving" became nine-tenths of virtue and the growth of the cake the object of true religion. There grew round the non-consumption of the cake all those instincts of puritanism which in other ages has withdrawn itself from the world and has neglected the arts of production as well as those of enjoyment. And so the cake increased; but to what end was not clearly contemplated. Individuals would be exhorted not so much to abstain as to defer, and to cultivate the pleasures of security and anticipation. Saving was for old age or for your children; but this was only in theory,--the virtue of the cake was that it was never to be consumed, neither by you nor by your children after you.

"In writing thus I do not necessarily disparage the practices of that generation. In the unconscious recesses of its being Society knew what it was about. The cake was really very small in proportion to the appetites of consumption, and no one, if it were shared all round, would be much the better off by the cutting of it. Society was working not for the small pleasures of today but for the future security and improvement of the race,--in fact for "progress." If only the cake were not cut but was allowed to grow in the geometrical proportion predicted by Malthus of population, but not less true of compound interest, perhaps a day might come when there would at last be enough to go round, and when posterity could enter into the enjoyment of our labors. In that day overwork, overcrowding, and underfeeding would have come to an end, and men, secure of the comforts and necessities of the body, could proceed to the nobler exercises of their faculties. One geometrical ratio might cancel another, and the nineteenth century was able to forget the fertility of the species in a contemplation of the dizzy virtues of compound interest.

"There were two pitfalls in this prospect: lest, population still outstripping accumulation, our self-denials promote not happiness but numbers; and lest the cake be after all consumed, prematurely, in war, the consumer of all such hopes.

"But these thoughts lead too far from my present purpose. I seek only to point out that the principle of accumulation based on inequality was a vital part of the pre-war order of Society and of progress as we then understood it, and to emphasize that this principle depended on unstable psychological conditions, which it may be impossible to recreate. It was not natural for a population, of whom so few enjoyed the comforts of life, to accumulate so hugely. The war has disclosed the possibility of consumption to all and the vanity of abstinence to many. Thus the bluff is discovered; the laboring classes may be no longer willing to forego so largely, and the capitalist classes, no longer confident of the future, may seek to enjoy more fully their liberties of consumption so long as they last, and thus precipitate the hour of their confiscation."