Circular Logic Watch

The Independent’s John Lichfield, writing about Nicolas Sarkozy:

His ideas are based on two simple but accurate diagnoses of France’s economic decline in the past 30 years.

First, France does not work enough. Young people enter the workforce late; experienced people retire early; the standard working week is now just 35 hours. France works an average of just over 600 hours per inhabitant per year, taking into account all the people not in work; Britain 800 hours. Result: slow growth, low incomes and high unemployment.

Yes, he really did blame high unemployment on the number of people not in work. As it turns out, French people (if Lichfield’s figures are right) work 25 per cent fewer hours than the British, however, that includes the hours of potential work lost to joblessness. Of course, this is quite a valid reason to object to unemployment – it’s literally a waste of time, but this isn’t what he’s getting at. He seems to suggest that if only the others would work harder, they would either generate enough supply-which-creates-its-own-demand to create more jobs, or else they would spend enough extra income to create more aggregate demand and create more jobs.

Current UK unemployment is 5.5 per cent, French 8.4 per cent – so just over a third (34 per cent) greater. All other things being equal, you’d expect the hours gap to change pro-rata with the unemployment gap – that is, if like the Indy, you are stupid enough to contaminate your proposed cause with a measurement of effect. But clearly something is not equal. If the greater quantity of worklessness is too great to explain the lesser quantity of work, the excess must have been cancelled out by something – which can only be that the people in work are working harder.

3 thoughts on “Circular Logic Watch

  1. We have a quite serious problem in France with employers who are reluctant to recruit young people, but are very prone to fire the experienced (and more expensive) older workers who will in turn be unable to find a new job. It is not true that people retire early, there are simply too many unemployed seniors who are disregarded by would-be employers… It also amounts to some circular logic, a very distructive one for that matter!
    A French (already senior but still employed) citizen.

  2. Of course the underlying error of his discussion is the presumption that people are essentially economic beings, i.e., that we live in order to work.

    I think this presumption works more or less this way: If people are essentially economic beings, then their value is correctly judged in economic terms. If a person’s value is correctly judged in economic terms, then one with low economic value is correctly judged to have low human value. If one has low human value, then one must be eliminated from the economic system.

    This may have been true of primitive humans, but is as outdated a human reality as leeches are to medicine.

    While a redistribution of wealth may not be wise, disincentives to hoarding it accomplish much the same effect.

  3. I´m somewhat suspicious of unemployment rates. Especially comparisons between different countries.

    For example, there were several British studies in 2003 (including the OECD) saying that disability and sickness benefit numbers were a lot higher in the UK than in continental Europe. Meaning that the unemployment rates in the UK were significantly reduced because these people were no longer counted as available for work. The best estimates back in 2003 put these numbers as close to 3% of the available workforce (1 million workers). Which would almost double the UK unemployment rate.

    Are there any new studies available to change that outlook?
    Because with them, the “real” unemployment rate doesn´t look that differently from France and Germany.

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