That reply included this assertion: "a) by the lump of labour fallacy I mean simply that changing the labour supply of group A will impact the employment probabilities of group B. Eg, that early retirement policies can create jobs for young people, or that restricting immigration reduces native unemployment. Except in the short run -and often not even then - this is a fallacy. That's all I mean, and I believe the empirical evidence - literally hundreds or thousands of empirical studies - supports this. [...] I do think society would be better off in welfare terms if income was more equitably distributed, those in employment worked less and enjoyed more leisure, etc - ie Germany/Northern Europe rather than the US. But that won't create jobs."
As pointed out several times on this site, if wealthy people work less this will lead to structural changes in employment. This could include economists losing their jobs, but the financial sector and zero-sum patent litigation have been mentioned as two other examples of work that might see lower demand, especially if government budget deficits and inflation go away. With this in mind, it is worth examining how someone could make the statement that working less would not create jobs and the implications of this conclusion.
Imagine an alternative currency based on hours worked where everyone was paid at the same rate and could be trusted not to slack off or 'invent' useless types of work. One hour of work would allow you to purchase an hour's worth of product from someone else. Someone who enters a large community does not affect how much work anyone else can do, and the same can be said for someone who leaves the system.
This is not how the real economy works. If every unemployed person were to be relocated to another habitable planet, the unemployment rate would not stay the same; it would decrease, although more people would enter the labour market due to better job opportunities, or would lose their jobs selling to people on welfare, so it wouldn't stay at zero.
However, another way to reach that conclusion would be to assume that the decisions made during spending are not important. Maybe 20% of every person's income goes to 'the rich' who are already spending as much as they can, which is why unemployment exists, and so sharing a job will lead to the exact same results because the same 20% of the total goes to the rich.
That idea of unavoidable 'rents' would give no explanation for why unemployment rose sharply and has remained high despite government spending, or how to keep employment high in the long term if the only reason it was high before the financial crisis was people were taking out loans and spending money they didn't have, but that's not surprising since mainstream economics has no explanation for why unemployment exists. This deficiency is seen as acceptable since people aren't rational right?!
The key to this is that economists do not understand that people with too much money tend to buy from other people with too much money, which when combined with the 'lower marginal propensity to spend money' of the wealthy is what leads to unemployment.
...well, I don't know the point of making this longer. Already had feedback from the OWS forum that many people don't think working harder helps the poor. More links:
http://www.mckinseyquarterly.com/Recovering_from_information_overload_2735
"...leaders need to become more ruthless than ever about stepping back from all but the areas that they alone must address. There’s some effort involved in choosing which areas to delegate; it takes skill in coaching others to handle tasks effectively and clarity of expectations on both sides. But with those things in place, a more mindful division of labor creates more time for leaders’ focused reflections on the most critical issues and also develops a stronger bench of talent."
http://www.theatlantic.com/technology/archive/2012/07/are-we-addicted-to-gadgets-or-indentured-to-work/260265/
This post was supposed to help someone understand how it helps the poor for a wealthy person to work less; see the 'non-unique' case of the effects on tax revenues and the oversupply of educated workers, but I don't know whether anyone besides economists make the assumptions in the below notes or would find the argument worth reading. Was going to explain how economists could morally justify supporting the 'some people on welfare' system instead of the "share jobs" system given the below model of 'maximum happiness' but I'm not sure if anyone would be interested.
'working less helps the poor'
the idea that 'sharing' jobs does not 'create' jobs.
'flows' critical
talking about the poor working less makes it sound like a 'trap', possibly a way of identifying 'lazy' workers.
standard of source of earnings vs destination of spending. not everyone can 'win' but good enough for many people
errors: fixation on money as the 'reward' from working, and therefore the idea that sharing work is zero-sum for 'happiness'. meanwhile, unemployment or poverty is an excuse for government to spend money using deficits, which creates 'extra' happiness beyond market equilibrium. result is more money being obtained and spent than for sharing work.
assumed to be a closed system in the sense that spending will tend toward earnings and any savings are intentional and probably short-term... does not account for earning more than can be spent.
assumption: money may be 'worth less' on average to someone with a high income but also easier to obtain, so the 'utility from working' might be thought to be the same regardless. full-time work and welfare would raise 'total amount of free time'. only logical if money has constant utility regardless of free time and productivity is constant. would be the responsibility of workers to contradict assumptions about goals and utility of money and time.
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