Wednesday, July 15, 2026

Human aspiration is a disposition, not an exhaustible resource. Mokyr showed that civilizations which honor that aspiration grow, and those that suppress it stagnate

See The Lump of Labor Fallacy in the Age of AI by David Hebert.

"In conclusion, the problems with the lump of labor fallacy were settled long before AI arrived. Smith understood that human aspiration is a disposition, not an exhaustible resource. Mokyr showed that civilizations which honor that aspiration grow, and those that suppress it stagnate. The lump of labor fallacy gets the economics wrong because it makes fundamental errors in human nature and economic history.

But wrong ideas with organized constituencies do not stay defeated. The longshoremen’s contract shows what happens when the fallacy wins a political victory. If AI policy follows the same template, the damage will be measured not in port fees but in trillions of dollars of foregone growth and millions of jobs that never get created. The fallacy is intellectually bankrupt. Whether it remains politically solvent is the question that actually matters."

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