I guess we can evaluate this claim by looking at profit margins. In industries with thin margins (eg., retail often has 1-2%) then there is significant competitive pressure. There we would not see "spare labour" because it would be competed-away.

In industries with large margins, this indicates weak competitive pressure, ie., a weak incentive signal to "compete away" this ineffective labour.

I imagine that, upon this analysis, we'd find it holds up. ie., the observation that there are lots of people doing very little productive work correlates well with weak competitive pressures and hence high margins.

That also explains why, institutionally, there's no internal pressure either. If margins are good, no one rocks the boat.

Chesterson's Fence at a corporate level.

> There we would not see "spare labour" because it would be competed-away.

This only works (reliably) in an idealized free market.

That is to say, in the classroom.

In the real world, there are a myriad of reasons in any given situation why a company might have a low profit margin, but still have loads of inefficiencies and other imperfections that haven't been, and won't be, "competed away".