[PEN-L:2548] Re: Re: Economic's "narrow focus"

[Brad De Long <delong@xxxxxxxxxxxxxxxxx>]

>
>But, Brad, while we're asking for examples, can you give me an example of
>any economist who has challenged the _sources_ of Samuelson & Nordhaus's
>perennial lump-of-labor fallacy? If anthropologists were as accomodating as
>economists, Piltdown man would still be in our evolutionary family tree.
>
>
>Tom Walker


Samuelson and Nordhaus's "lump of labor" fallacy is the Classical doctrine
that fiscal and monetary policy cannot affect the total amount of
employment--that the number of hours worked is fixed, unchangeable,
unresponsive to government policies. And that the best we can do (when
confronted with a situation like
Europe's 10% unemployment today, or America's 25% unemployment in the Great
Depression) is to spread the (limited) amount of work around fairly.

But what Samuelson and Nordhaus want to argue--I think correctly--is that
we know very well how to get to a better outcome in which unemployment is
low not because a lot of us are working part-time (when we would rather be
working full-time), but because demand for labor is high...


Brad DeLong