Williams on 'Lump of Labor'

In a recent column, Walter Williams demolishes an economic fallacy that helps altruists rationalize both protectionism and universal welfare:

Just imagine how many people we could employ to transport hay if we got rid of those job-stealing tractors! (Original Photo by Gozha Net on Unsplash)

People always want more of something that will create a job for someone. To suggest that there are a finite number of jobs commits an error known as the "lump of labor fallacy." That fallacy suggests that when automation or technology eliminates a job, there's nothing that people want that would create employment for the person displaced by the automation. In other words, all human wants have been satisfied.

Let's look at a few examples. In 1790, farmers were 90 percent of the U.S. labor force. By 1900, only about 41 percent of our workers were employed in agriculture. Today less than 3 percent of Americans are employed in agriculture. And it's a good thing. If 90 percent or 41 percent of our labor force were still employed in agriculture, where in the world would we find the workforce to produce all those goods and services that weren't around in 1790 or 1900, such as cars, aircraft, TVs, computers, aircraft carriers, etc.? Indeed, if technology had not destroyed all of those agricultural jobs, we would be a much, much poorer nation.

And, yes, in case you were wondering, Wiliams does talk about how technology affects manufacturing jobs.

-- CAV