Monday, January 19, 2015

The Luddites Had a Time Machine! (and other claims the truth or falsehood of which is not relevant)

According to Achim Kemmerling, a political economist at Central European University in Budapest, the truth or falsehood of claims is irrelevant ("The end of work or work without end? How people’s beliefs about labour markets shape retirement politics," Journal of Public Policy, Published online: 12 January 2015).

Now, I have taken Kemmerling's statement somewhat out of context. His original statement, with emphasis added to the parts left out, was:
For the purposes of this article, however, it is not relevant whether the claims are true or false, as long as (some) people believe in them.
Kemmerling is dead wrong. Whether the claims are true or false is relevant for the purposes of his article -- no less than the context of his claim about its supposed non-relevance.

What are those claims? The claims Kemmerling says he is investigating are:

  1. "that there is an upper limit to the total number of jobs in a society" and/or 
  2. "that this upper limit of total jobs will fall as time passes due to processes of globalisation or technological change."

A rash of subsidiary claims follow from those. The most important (for the purposes of Kemmerling's article) is that "some people believe in them." The second is that the claims are fallacies. A third is that the assertion that "some people" believe in these ideas is itself false or at least grossly exaggerated. The truth or falsehood of the claims being investigated is thus relevant at least to the extent of its bearing on these subsidiary claims.

Kemmerling extrapolates belief in the lump-of-labour idea from agreement with Eurobarometer survey question 68.1: "People in their late 50s should give up work to make way for younger and unemployed people." As he admits, the survey question "imperfectly proxies the idea of a trade-off between these two types of workers." Although he concedes "there is no perfect remedy" for this discrepancy, he maintains, "one can arguably control for alternative explanations such as norms."

That's nonsense. The word "arguably" must be construed as referring to plausible arguments. Kemmerling presents none. Instead, he reports on variations in responses from different sub-groups and speculates on norms that might account for those differences.These are not controls. These are excuses.

One can only marvel at the heroic lengths Kemmerling goes to to coax the sought after answer out of the recalcitrant data. But why on earth would he even bother if "it is not relevant whether the claims are true or false"? Despite that discrete disclaimer, Kemmerling assumes that the lump-of-labour is indeed a widespread belief and a fallacy and implies that it is an obstacle to presumably (from his perspective) more rational policy reform. More crucially he assumes that not just some but many people believe in the fallacious, obstructive idea. The tell-tale appears in his reference to the nineteenth century Luddites:
The causal belief investigated here is the lump-of-labour idea... This idea is far from new. In the early nineteenth century, the Luddite movement destroyed factory machines as technical progress threatened to make workers redundant.
How did the Luddites answer Question 68.1 of the 1811 Eurobarometer survey? There was no Eurobarometer survey in 1811! There also was no Eurobarometer in 1753 when Peter Kay, inventor of the flying shuttle, had his house burnt down by Luddites EVEN THOUGH LUDDITES DIDN'T EXIST UNTIL THE NINETEENTH CENTURY!

From Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu, James Robinson. page 85:

How did the nineteenth century Luddites burn down a mid-eighteenth century house? The obvious answer is they must have had a time machine (assuming that it is not relevant whether or not Acemoglu and Robinson's claims are true or false).

The claim about the Luddites is a historical claim, as is the claim about belief in a lump-of-labour fallacy. No amount of agnosticism about the truth or falsehood of claims or appeal to control variables for alternative explanations will enable a researcher to arrive at conclusions regarding subjects' beliefs about A from their answers to questions about B, especially if the researcher isn't aware that "beliefs about A" is an old, old fable with propagandistic origins.

Some more context:
Hence, the question of the lump-of-labour fallacy is a controversial one even among academics (Walker 2007). For the purposes of this article, however, it is not relevant whether the claims are true or false, as long as (some) people believe in them.
Walker 2007 challenged the authenticity of the fallacy claims. More specifically, Walker 2007 challenged the assertion that support for certain policy proposals implied an underlying and motivating belief that there is a fixed amount of work.

Walker 2015 regrets that he was not aware at the time that Pigou (1913) and Dobb (1928) had beaten him to the punch with their respective ignoratio elenchi critiques of the supposed fixed work-fund fallacy (another name for the lump-of-labour). A.C. Pigou argued that it would: unwarrantable to conclude that, because the reasons which popular thought offers in defence of any thesis are invalid, therefore, that thesis is untrue. If it were a good ground for rejecting an opinion that many persons entertain it for bad reasons, there would, alas, be few current beliefs left standing!
He concluded that some (though not all) restrictions on the supply of labour can expand employment on the condition that they "succeed in rendering the labour and capital of the rest of the community more effective in production."

Maurice Dobb's critique was more direct and decisive. He pointed out that even under the assumption that restriction of the supply of labour would decrease aggregate income per worker it could still "increase wages in proportion to the worker's expenditure of energy and his 'wear and tear,' and it can increase Relative Wages, or wages as a proportion of the total social income."

In short, it's not only about how much you can get for your labour but also how much you have to work to get it. "Opportunity cost," in economist jargon. There may indeed be more jobs and more total income if older workers stay in the work force longer but that could also mean everyone was working more for proportionately less pay.

The more elaborate answer to the presumed lump-of-labour idea is the analysis of the social cost of labour as articulated by John Maurice Clark and K. William Kapp. As Robert Prasch has pointed out, analysis of the social cost of labour:
...presents us with an underlying logic of labor market regulations. Laws concerning wages, hours, health, or safety may still, of course, be criticized for being misspecified or ineffective. However, acknowledging the existence of a social cost of labor means that they can not be considered, ipso facto, to be "distortions." On the contrary, they represent a civilized society's response to the inevitable limitations of relying solely on market prices to ensure the sustainability of the economy, society, and polity. 
It would be presumptuous to attribute subjects' answers to Question 68.1 of the 2001 Eurobarometer survey to a sophisticated grasp of the social cost of labour. However it would be no more presumptuous than attributing the answers to a belief in a lump-of-labour idea. And a lot less preposterous.

UPDATE: Further evidence of Luddite time travel from Crandall, Parnell and Spillan, Crisis Management: Leading in the New Strategy Landscape, 2010:
History is full of examples of those who have shunned technology. For some, technology itself was the crisis. The Luddites, for example, carried out violent attacks on technology in the early 1800s by smashing machines in industrial settings. However, the attacks, which originated in England during the Industrial Revolution, were actually more of a social protest against falling wages, unemployment, and rising food prices (Malcolm. 1970; Wren. 1987). In such an environment the threat that machines would displace jobs seemed realistic. Unfortunately for the Luddites. their actions went too far, even to the point of burning down the houses of machine inventors John Kay and James Hargreaves (Wren, 1987). --.
Interestingly enough, Crandall et al. get the story right about the Luddites actions being "actually more of a social protest against falling wages, unemployment, and rising food prices." I can't confirm whether or not the claim that Luddites burned down John Kay's house came from "Wren 1987."