Sandwichman's Lump-of-Labor Odyssey

The first mention of the lump-of-labor fallacy I ever encountered was in a 1997 column by Jock Finlayson, vice president for policy and analysis of the B.C. Business Council. It was a Business in Vancouver debate with Ken Georgetti, president of the B.C. Federation of Labour, on the merits of restricting overtime to combat unemployment.

At the time, I had been active in advocacy for shorter working time for a little over two years. An abiding interest in the idea had been stoked in 1995 when I wrote a research proposal to do a narrative policy analysis of the employment prospects of work time reduction. Funding for the project never materialized in the wake of a comprehensive provincial government spending freeze announced three weeks after the proposal submission deadline. Meanwhile, however, I had established a web site, the Timework Web, to compile research and commentary on shorter working time.

A little past the midway point in his column, Finlayson wrote, "Work-sharing rests on the belief that the economy can generate only a fixed amount of work. History provides little support for this gloomy view, which economists have labelled the lump-of-labour fallacy." The passage caught my attention because of its distinctive "ungrammaticality," to use Michael Riffaterre's clumsy term.

Riffaterre used that term in a generic sense to refer to "any wording unacceptable in context" rather than exclusively to overt violations of the rules of grammar.
These clumsy wordings, in Riffaterre's analysis, point to the text's intertextuality, "The text refers not to objects outside of itself, but to an intertext. The words of the text signify not by referring to things, but by presupposing other texts."

For narrative policy analysis, such peculiarities of wording are not mistakes to be indulged but "jackpots" for decoding a text. The challenge then becomes one of retrieving the corpus of texts – the "intertext" – to which the peculiar passage refers. The archival work to do so would have been inconceivable before the Internet and wide availability of full-text searching of databases of journal articles, pamphlets  and treatises.

Finlayson probably learned about the lump-of-labour fallacy from Paul Samuelson's ubiquitous introductory economics textbook. But Samuelson didn't know when or where the fallacy claim originated, explaining that the fallacy "was widespread during the Great Depression 1929-1935 and is still encountered in today's France." (correspondence with the author).

Using JSTOR, I was eventually able to trace the "lump of labour" phrase to an 1891 article on piece work by David Frederick Schloss. By then, January 1999, I was already aware that the fallacy claim -- and rebuttals of it -- had long preceded that specific label. It took me 15 more years of occasional forays back into the archives (and keeping my eyes peeled) before I finally got to what I believe is the rock bottom of the story.


The argument that there is – or, more correctly, if there is – a fixed amount of work appeared in John Graunt's 1662 Natural and Political Observations made upon the Bills of Mortality: "that if there be but a certain proportion of work to be done, and that the same be already done by the non-beggars, then to employ the beggars about it, will but transfer the want from one hand to another."

Commentators have speculated that Graunt's close friend and associate, William Petty, may have been the author of the political and literary embellishments to the actuarial observations in Graunt's book, so the discussion of beggars may well be Petty's. The section goes on to address a key proposition of mercantilist trade policy – the assumption that there is "but a certain proportion of trade in the world":

This little hint is the model of the greatest work in the world, which is the making of England as considerable for trade as Holland; for there is but a certain proportion of trade in the world, and Holland is prepossessed of the greatest part of it, and is thought to have more skill and experience to manage it. Wherefore to bring England into Holland's condition, as to this particular, is the same, as to send all the beggars about London into the West Country to spin, where they shall only spoil the clothiers wool, and beggar the present spinners at best; but, at worst, put the whole trade of the country to a stand, until the Hollander being more ready for it, have snapt that with the rest.

So the fixed amount of work is not some naïve, intuitive belief known or shown to be held by advocates of work sharing but an explicit hypothesis stated by one of the forerunners of what would become political economy and economics. The canonical refutation of this hypothesis, with regard to work, appeared in a 1780 pamplet by Lancashire magistrate Dorning Rasbotham, Thoughts on the Use of Machines in the Cotton Manufacture, written in response to anti-factory rioting near Bolton, Lancashire, the previous year:

There is, say they, a certain quantity of labour to be performed. This used to be performed by hands, without machines, or with very little help from them. But if now machines perform a larger share than before, suppose one fourth part, so many hands as are necessary to work that fourth part, will be thrown out of work, or suffer in their wages. The principle itself is false. There is not a precise limited quantity of labour, beyond which there is no demand. Trade is not hemmed in by great walls, beyond which it cannot go. By bringing our goods cheaper and better to market, we open new markets, we get new customers, we encrease the quantity of labour necessary to supply these, and thus we are encouraged to push on, in hope of still new advantages. A cheap market will always be full of customers. Men will cross land and sea to go thither.

It is likely that the refutation of the mercantilist proposition of "a certain proportion of trade" had become a rhetorical commonplace during the course of the 18th century so that it became unnecessary to identify who said there was "a certain proportion of trade in the world" or "a certain quantity of labour to be performed."

In the early 19th century, particularly in the wake of the Luddite disturbances of 1811 and after, the notion became commonplace, without any evidence, that it was the rioting workers who harbored the proverbial belief in a fixed amount of work. The prosecutor in the trial of George Melior (or Mellor), William Thorpe and Thomas Smith for the murder of William Horsfall couldn't resist adding a criminal aspect to what he described as the delusion, ascribed to the defendants without evidence, that machinery reduces the demand for labour:

Mr. Horsfall is represented to me to have been a man, who had upwards of four hundred persons at work under him, extremely beloved by his men, and they greatly attached to him. He had very large manufactories, of course, from the employment of so many men; and he employed the machinery which was the object of the abuse of these misguided people. I have not the means of making such observations as I have frequently and lately heard made, upon the delusion which has prevailed upon that subject, amongst the lower orders. It has been supposed that the increase of the machinery by which manufactures are rendered more easy, abridges the quantity of labour wanted in the country. It is a fallacious argument: it is an argument, that no man, who understands the subject at all, will seriously maintain. I mention this, not so much for the sake of you, or of these unfortunate prisoners, as for the sake of the vast number of persons who are assembled in this place.

By the end of the 19th century the viciousness of the alleged belief in a fixed amount of work – and consequently a diminishing demand for labor – had become a leitmotif of the relentless assertion that the fallacy underpinned demands for shorter hours of work. Denunciations of the fallacy are typically supplemented with this or that explanation of why reducing working time is unnecessary or not economically feasible or will happen spontaneously through worker's choices of leisure, etc. In the aggregate, these add-ons are unpersuasive, often shallow and frequently contradict one another.

In my view, the persistence of the incongruous lump-of-labor fallacy claim is symptomatic of the rift between the scientific pretensions of economics and its ideological foundations. Paul Swaim, an economist with the OECD, once suggested to me that the fallacy is a type of error that economists themselves are constantly in danger of committing, in that they "cannot escape assuming that many potentially relevant variables are fixed."

This assumption is, of course, the standard ceteris paribus clause that Terrance Hutchison criticized extensively in The Significance and Basic Postulates of Economic Theory. Hutchison complained that it is usually not made clear by economists whether a particular ceteris paribus proposition is meant as "an empirical generalisation which can conceivably be false without any contradiction" or as "an analytical-tautological proposition." "Perhaps," Hutchison speculated,"such propositions are sometimes meant in one way, sometimes in another." Hutchison concluded, "That ceteris paribus propositions are frequently hopelessly ambiguous and that the ceteris paribus assumption should be used less often and more cautiously."

In a more recent review of the history of ceteris paribus, Joseph Persky observed that, ""In too many cases one is unsure of exactly what restraints are being imposed and by what authority the exercise is legitimated." Persky credited Alfred Marshall's role in popularizing ceteris paribus, which he apparently picked up from John Cairnes:

Although he doesn't cite Cairnes in his methodological discussions of the phrase, Marshall does use the following quotation from Cairnes in a discussion of the wages-fund theory: 'the rate of wages, other things being equal, varies inversely with the supply of labour.' 

The phrase Cairnes used there was actually 'other things being the same,' which appears eleven times in Cairnes's Some Leading Principles of Political Economy: Newly Expounded ('other things being equal' appeared twice and caeteris paribus six times). Notice that Marshall cited Cairnes "in a discussion of the wages-fund theory." More specifically, Marshall was criticizing Cairnes's attempt to "resuscitate" the wages-fund theory, in which Cairnes avoided the old pitfalls "only by explaining away so much which is characteristic of the doctrine." Marshall seems not to have noticed that it was precisely the hopeless ambiguity of the ceteris paribus device that enabled Cairnes to explain away so much!

Cairnes's attempt to revive the wages-fund doctrine was a response to William Thornton's apparently decisive repudiation of it in On Labour Its Wrongful Claims and Rightful Dues; Its Actual Present and Possible Future. The wages-fund doctrine had lent pseudo-scientific legitimation to fierce partisan polemics against trade unionism. In his chapter on trades unionism, Cairnes attacked a statement by Thornton to the effect that "the quantity of industrial work to be done is… 'at any give time a fixed quantity.'" Cairnes objected to this assumption vehemently, "...I must make bold to say that, within the range of economic reasoning, no more profound fallacy finds a place than is contained in this inference; nor, I must add, is there one more pregnant with practical consequences of a pernicious kind."

A review of Thornton's book in The Edinburgh Review for July 1869 took a more good-natured and humorous view of Thornton's self-contradictory gaffe:

That the rate of wages is governed, as Adam Smith and his followers have conceived, by the proportion between the capital disposable for the payment of labour and the number of the recipients of that capital, is a notion that Mr. Thornton scouts with contempt, and he consigns the chimerical 'wages-fund' to the lowest limbo of unrealities. Yet, while attacking the name, we find him occasionally, under the pressure of facts, using language which virtually admits the thing, as when he says, 'that at any given time the whole quantity of work to be done is a fixed quantity, and the uttermost which employers can afford to pay for having it done is a fixed amount'; and in other places his language recognises the inevitable fact that employment must be limited by the amount of capital which at the time being sets it in motion, that amount being the thing to which Smith, McCulloch, Fawcett, and other writers have assigned the offensive name.

If Thornton erred by "virtually admitting" the same notion that he elsewhere "scouts with contempt," Cairnes compounded error by not noticing that the "profound, pernicious fallacy" he bitterly denounced on page 251 of his book was none other than a restatement of the wages-fund doctrine he had stoutly defended back on page 174!

How is it possible that both Thornton and Cairnes could commit copy-cat errors while taking diametrically opposite positions on the question of the wages-fund? The answer lies in the inscrutable vagueness and ambiguity of the ceteris paribus clause. In the kaleidoscopic hall of mirrors where "other things remain the same," what "other things" are included in or excluded from the ceteris paribus pound is tacit as is exactly how they are "the same."

Compounding the uncanny coincidence fun, Persky credited William Petty with introducing the term ceteris paribus into economic discourse. As mentioned above, it is possible that Petty also introduced "a certain proportion of work to be done" into the economic discourse. This is not to say that a "certain proportion" and a "fixed amount" refer to the same thing, arithmetically. No doubt part of the shape-shifting rhetorical appeal of ceteris paribus arises from its equivocation on whether it is quantities or proportions or both that are remaining the same.

Would it even be possible for economists to use ceteris paribus assumptions "less often and more cautiously," as Hutchison prescribed, yet still perform the ideological/scientific somersault? On the evidence of the persistent projection of the lump-of-labor fallacy, I would have to conclude that the "hopeless ambiguity" of the ceteris paribus assumption provides an indispensable shield for the consensus economist's aura of objectivity at the same time that it remains treacherously porous for the heretic.

Sherk 'n Burke?

at the Heritage Foundation:
Automation and Technology Increase Living Standards
by James Sherk and Lindsey Burke

Many Americans blah, blah, blah... 

Lump of Labor Fallacy 

Fears of mass technological unemployment are predicated on a “lump of labor” model of the economy—the belief the economy needs a roughly fixed amount of work performed.In this economic model, machines automating work formerly done by people reduce the total amount of work remaining for humans, reducing total employment. Keynes forecast an impending crisis of unwanted leisure. He suggested future societies would establish three-hour workdays to give everyone enough work to avoid boredom.

Almost all economists reject this model today. Economists have found that an almost unlimited amount of potential work exists in the economy because people’s material desires continue to expand. Virtually all Americans today enjoy material living standards vastly better than the wealthy of 1900. Nonetheless, most Americans today would purchase additional goods and services if they received a raise or bonus.

[Bullshit.]

Sandwichman's lump-of-labor odyssey

Are Workers People? (Views Differ)

"...our understanding of wage determination has been transformed by an intellectual revolution... workers are people" -- Paul Krugman

Memo to Karl Marx, suggested revision -- highlighted in yellow -- to the climax of your 1865 address to the First International (courtesy of  Paul Krugman):

"Instead of the conservative motto: 'A fair day's wage for a fair day's work!' they ought to inscribe on their banner the intellectual revolutionary watchword: 'Abolition of the wages system Workers are people!'"

Where to begin?

Even prior to Card and Krueger's pathbreaking research on the minimum wage there were widespread intimations that workers might indeed be people. Reputedly, the Fair Labor Standards Act of 1938 -- which established a federal minimum wage in the U.S. -- was enacted into law more than a half century before the intellectual revolution that transformed our understanding of wage determination. How did that happen? It's like they must have had a time machine or something.

But are workers actually people? A balanced analysis would present both sides of the question objectively.

"That's you problem right there, ma'am. Your denominator is all
wore out and that's puttin' too much strain on your numerator."

More or Less? Fourth Grade Arithmetic for Economists

A highly-rated comment on Barro's column at Upshot

At Upshot, Josh Barro asks "Should Americans Work More?" At Policyshop, Matt Bruenig answers Absolutely Not.

Pinch me. Are we actually having this conversation? Should morbidly obese Americans eat more doughnuts? I am fond of quoting Thomas Pynchon's epic line from Gravity's Rainbow, "If they can get you asking the wrong questions, they don't have to worry about answers."

Barro's column pursues the "balanced, objective" framing device of looking at "both sides" of a wrong question. Bruenig points out the flaw in Barro's central theme of regulatory and tax "distortions" that discourage even longer hours of work. Barro's framing ignores much greater and more fundamental distortions that impose longer hours. "If we are going to have a work debate," Bruenig concludes, "it should proceed by asking ourselves how much time we want to spend toiling our scarce lives away, not muttering incoherently about what distorts what."

Bruenig presents two charts that compare hours worked in the U.S. to other countries. The first chart plots the ratio of annual hours to labor productivity. The second chart compares each country's hours/productivity ratio to an aggregate norm. The U.S. is a long-hours outlier in both.

In plain language, what these charts reveal is the inordinate emphasis in the U.S. on GDP. In fourth-grade arithmetic terms, the index called "productivity" is a fraction. It has both a numerator and a denominator. The numerator is GDP. The denominator is hours of work. The result of this operation of division is called the quotient. Productivity is a quotient. A quotient is increased by either increasing the numerator or decreasing the denominator (or both).

There is an extensive literature on the systematic errors made by children learning rational number concepts. Those errors result from attempts to apply rules that have been previously learned about whole numbers  to new situations where those rules are not relevant. Mistaking a quotient (productivity) for a numerator (output) would be an example of this kind of systematic error. Would it be asking too much for economists to set aside their indulgence in arcane mathiness and attend instead to the pervasive ignorance of fourth-grade rational number concepts that underlies the single-minded obsession with "economic growth"?

Slush-Fund Schäuble

“He [Schäuble] admitted that he had met the arms dealer and lobbyist at the centre of the scandal, Karlheinz Schreiber, and accepted an undeclared DM100,000 (£36,300) cash donation from him.”

This inconspicuous line appeared in a BBC story Wolfgang Schaeuble: Germany's man with a Grexit plan. I hadn’t heard about this background detail before. Why not?

In November 2013, Karlheinz Schreiber was sentenced by a German court to six and a half years for tax evasion. He was also involved in "inappropriate" transactions with former Canadian prime minister, Brian Mulroney. "Mulroney admitted taking $225,000 in cash from Schreiber, but said he broke no laws or ethical guidelines."

That's a lot of cash. "Broke no laws or ethical guidelines" doesn't pass the laugh test.

The nature of Schäuble's shady dealings with Schreiber have apparently never been fully disclosed, apart from his admission that he accepted the cash, which resulted in his resignation as leader of the CDU and Angela Merkel's elevation to that post.

German party leader took cash from arms dealer, Guardian, January 11, 2000

In a new twist to the illicit funding scandal that has embroiled Germany's Christian Democrats, their leader, Wolfgang Schäuble, last night admitted he too had accepted cash from the arms dealer Karlheinz Schreiber for party funds. 

The former chancellor Helmut Kohl is already under criminal investigation after admitting last year that he funnelled cash to the Christian Democrats (CDU) through a web of secret bank accounts. He has refused to name the donors, in contravention of German law.
According to a report to be published today in the newspaper Stuttgarter Zeitung, Mr Schäuble, who has always enjoyed a reputation for integrity, has been put "under massive pressure" by Mr Kohl to own up to his role in the irregular financing. 

In an interview with the television channel ARD, Mr Schäuble said he took DM100,000 (£32,114) from the arms dealer which he had passed on to the party. He said that, unlike the money which Mr Kohl funnelled to the CDU, the cash he took did figure in the party's accounts but was reported under "miscellaneous income".
That would suggest that the handling of the donation contravened a law which calls for contributors who give more than DM20,000 to any political party to be identified. 

Mr Schäuble, who became party chairman after Mr Kohl's crushing defeat in the 1998 election, was already under pressure to explain another mysterious - and apparently illicit - movement of funds.
Revised accounts released by the CDU at the end of last year showed that in January 1997, more than DM1m was sent by the parliamentary party to party headquarters in apparent defiance of a ban on such transfers. Mr Schäuble was leader of the parliamentary party at the time.

Germany's Schreiber Affair: The Scandal that Helped Merkel Become Chancellor, Speigel Online International, August 07, 2009:

Unexpected Questions In Parliament Led To Lies  

Meanwhile Kohl’s likely successor in the CDU, Wolfgang Schäuble, was becoming ever more enmeshed in the Schreiber scandal. At the time, Schäuble was one of the most popular politicians in the country and in 1997 Kohl had handpicked Schäuble to succeed him at the head of the CDU — but because the CDU lost the election in 1998, Schäuble became the party’s chairman.

When questioned in parliament in 1999 about whether he had accepted a donation during a meeting with Schreiber, Schäuble disputed the question. But in a radio interview in January, he admitted he had met Schreiber at least once more. That created suspicion that a second donation had been made. Whatever the case, indignation within the ranks of the CDU and its Bavarian sister party, the Christian Social Union (CSU) toward Schäuble grew so much that he was forced to resign. 

So how exactly did Merkel profit from the Schreiber incident? The former party secretary became aware that, in the face of an unexpected question in parliament, Schäuble had lied about taking cash from Schreiber. Merkel realized at the time that this secret would eventually come out and would inevitably lead to Schäuble’s downfall. She also knew that, if she wasn’t careful, she could go down with him. After all, it was only logical that the general secretary of a party would have the confidence of the head of that party. 

And so she wrote about it — in what was widely described as a “Dear John” letter addressed to Kohl and published in the Frankfurter Allgemeine Zeitung newspaper on Dec. 22, 1999. In the letter she was very critical of Kohl, saying that the new generation of politicians in the CDU needed to distance themselves from him, in the same way that teenagers must distance themselves from their parents if they are to become adults. Even though Merkel had only told Schäuble about plans to publish the open letter the night before, Kohl was convinced that the missive had been published with Schäuble’s foreknowledge and approval. 

Suddenly Kohl seemed to discover his old political boisterousness, attacking Schäuble ever more vigorously. Perhaps he wanted to secure a virtuous place in the national history as the “father of German unity” — he had presided over the re-unification of East and West Germany — rather than the infamous politician with the dirty donations. A war of words, via various interviews, ensued, the likes of which had not been seen before. The fight between the two former friends and allies escalated to the point that Kohl abdicated his seat as honorary chairman of the CDU and Schäuble resigned his position with the words: “The CDU finds itself in the most serious crisis in its history.”

The scandal that rocked the government of Helmut Kohl, Deutsche Welle, January 18, 2010

Unanswered questions 

Despite the two-and-a-half year probe into the CDU's murky financial dealings, the chairman of the special parliamentary investigation committee said during the time that key questions in the affair still remained unanswered. 

"A lot of untruths have been told in this committee, to put it mildly. I can also be more brutal and say: 'a lot of lies have been told,'" said Volker Neumann, a member of the center-left Social Democratic Party. 

"For years, the CDU hasn't just breached party funding laws but it was also guilty of political corruption on several accounts under then Chancellor Kohl," Wolfgang Stroebele of the Green Party said. 

The CDU denied allegations of corruption but the affair engulfed other leading lights of the party too. In early January, 2000, CDU chief Wolfgang Schaeuble, Kohl's handpicked successor, admitted he had received a payment of 100,000 deutschmarks from Schreiber.

Money being exchanged 

But Schaeuble, Germany's current finance minister, insisted he had forwarded the money to the CDU's then treasurer, Brigitte Baumeister, and had nothing to do with the illegal booking of the money. Baumeister rejected the accusation, saying she had handed over the money to Schaeuble in an envelope.

The allegations were never proved in court but the affair cost Schaueble his job. He was replaced by Angela Merkel. 

A political scandal 

In many cases, the courts were unable to prove that CDU heavyweights were indeed involved in the affair. Proceedings against Helmut Kohl in a court in Bonn were stopped. 

And authorities in Augsburg suffered a setback when Joerg Hillinger, the public prosecutor in an investigation of the CDU party in the state of Saxony was killed in a car accident in April 1999. 

His death came shortly after investigations uncovered dubious dealings in the state party. Till today, it remains unclear whether his death was an accident or murder. 

The CDU slush fund scandal has all the makings of a political affair. Till today, the names of the donors remain unknown and it remains unclear how many millions the party actually received in secret donations. 

Investigators had hoped the arrest of former Deputy Defense Minister Holger Pfahls in July 2004 - after five years on the run - would shed more light on the affair. But that didn't happen.

Rates of Growth and the Four-Day Week

RATES OF GROWTH
Henry Hazlitt, Newsweek, August 25, 1958

Is it true, as we are now so frequently told, that Communist Russia’s economic "rate of growth" is faster than ours, or that we cannot survive unless we increase our own "rate of growth"? There are at least five main reasons why rate-of-growth comparisons are untrustworthy.

... 

Let’s stop making a fetish of national income statistics and percentage rates of growth.

THE FOUR-DAY WEEK: HOW SOON?
Daniel Seligman, Fortune, July 1954

A calculation made by Fortune for the years since 1929 suggests that in the past quarter-century U. S. workers have been taking about 60 per cent of the productivity pie in the form of income, about 40 per cent as leisure. Assuming that the four-day week for non-agricultural employees will be attained when the total work week is in the vicinity of 32 hours, that productivity continues to increase at an average of 2 or 3 per cent a year, and that something on the order of the recent 60-40 ratio for income and leisure continues in effect, the 32-hour week should be spread throughout the whole non-farm economy in about 25 years.

Meanwhile, in the income-leisure choice for the years ahead, there will be one strong pressure for leisure: The workers who have been energetically pushing their way into the middle-income class have, naturally, become increasingly preoccupied with federal tax demands. "If we get more dough," said one AFL man recently, "the government can take back part of it. But they haven’t yet figured out a way to tax your day off."

In retrospect, the inability of the government to tax workers' days off may have been one strong pressure against leisure.

Parsing "Generic Productivity"

"Little snippets taken out of context can make anyone sound dumb." -- Kevin Drum, Mother Jones.

Kevin Drum thinks "It's Time to Cool It" on Jeb Bush's assertion that "people need to work longer hours." After all, Bush "quickly clarified" that he was talking about something totally different than what he said. Perhaps Mr. Drum would like to quickly clarify a dumb-sounding little snippet of his own with some ex post facto context? In a previous column on Bush's call for working longer hours, Drum pardoned Bush for a "confusing" reference to productivity:

It's true that Bush's use of "productivity" in the third sentence is a bit confusing because he's suddenly using it in its generic sense, not its formal economic sense, but that's no more than the slight clumsiness that's inevitable in live settings.

This is clearly wrong. There is no such thing as a "generic sense" of productivity. Furthermore, the formal economic sense of the word fits the context of Bush's statement better than would the alternative definition of productivity as the capacity to produce. Bush said, "people need to work longer hours and, through their productivity, gain more income for their families."

Bush was talking about growth -- economic growth defined as an increase in the GDP -- and hours of work. Productivity refers to a ratio between output, in the form of GDP, and inputs in the form of hours of work. If Bush had a different meaning of productivity in mind, it could as easily have been the misconception that productivity is simply a synonym for output.

What Drum is asking us to do is credit Bush for the keen insight of his retroactive clarification and at the same time give him a break on the grounds his original statement was clumsier than it appeared. Somehow Bush comes out ahead on two counts for being both smarter and dumber than he sounds.

The worst thing about Drum's apologetics is that Governor Bush is not the real problem here. The real problem is a feeble public discourse about economics in which terms like "growth," "productivity" and "hard work" are tossed around as vague euphemisms that have no definitive meaning. Bush was merely reciting a stock jumble of empty platitudes. It was the incongruity of a particularly odd arrangement of those platitudes, whether intended or not, that struck a nerve. Drum urges us to set aside the reflex of incredulity and get on with the droning monotone of platitudes -- the real business of political punditry.

This is a teachable moment. I don't see any point to "cooling it." Here's why:

First, there is the matter of the disconnect between productivity gains and income that Alan Pike mentioned at Think Progress. If greater productivity hasn't been translating into higher income for decades, why should we assume it will magically do so in the future? Regardless of whether Jeb Bush meant what he didn't say or said what he didn't mean, we should be having an intense public conversation about the disconnect between productivity gains and median incomes.

Second, and more germane to the sense in which Bush may have been misusing the term productivity, both output and productivity are weak links in the logical chain between longer hours and more income. Longer hours don't necessarily translate into increased output and increased output doesn't necessarily translate into improved productivity.

Under current conditions in the U.S. it is very likely that those links have been broken. According to a Gallop poll from last August, full-time workers in the U.S. worked an average of 47 hours a week. The Bureau of Labor Statistics gives an average of 42.5 hours a week for full-time workers. This number, however, averages in the hours of workers who usually work full time but who worked less than 35 hours in the reference week due to non-economic reasons, such as illness or family obligations. So the average hours of people who usually work full time and who actually did the week they were surveyed would be more than 42.5. For the sake of argument, let's say that full-time workers average 44 hours of work a week.

If we assume that a 40-hour workweek is optimal for total output then those extra four hours a week are not only going to significantly depress productivity but also would lower total output by a small amount. The latter conclusion follows tautologically from the assumption. What is perhaps less intuitively obvious is that even if we assume that a 44-hour workweek is optimal for total output, hourly productivity would be significantly lower under a 44-hour workweek than it would be under a 40-hour workweek. I estimate around 9% higher productivity for the 40-hour week.

One of the pioneers of national income accounting, Edward Denison, estimated in the early 1960s that as much as 10 percent of economic growth between 1909 and 1957 could be attributed to "the effect of shorter hours on the quality of a man-hour's work." During that half-century, average annual hours of work per worker declined by about 30% while total economic output nearly tripled.

This is not to say that economic output would have necessarily been less if annual hours of work had not declined as much as they did -- only that more of the output would have been attributable to long hours of work rather than increased quality of work. Workers would have received less income for more hours of work. Therein lies the cost-benefit riddle that the euphemistic false equivalence of growth, wages, productivity and hard work doesn't solve. Productivity is  not simply about how much output there is but how much output relative to effort. Way back in 1929. Lionel Robbins wrote, prematurely:

The days are gone when it was necessary to combat the naïve assumption that the connection between hours and output is one of direct variation, that it is necessarily true that a lengthening of the working day increases output and a curtailment diminishes it.

Unfortunately, those days are not gone. Instead the "naïve assumption" has triumphed over economic analysis of the hours of work and the public conversation has retreated to the glibly vicious "magazine of untruth" refuted nearly 150 years ago.