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Technological unemployment

This thoughtful piece in the Economist examines the prospects for technological unemployment and a continuation of the trend by which income gains go to owners of capital.  Economists have conventionally rejected this idea but recent trends in developed countries – the failure of US wages to grow for 4 decades – suggest that economic theory needs to consider some of the secular unemplyment possibilities considered by Keynes.This signals to me a case for increased investment in education, a redistribution of ownership claims on capital, a much more comprehensive social welfare system that offers a guaranteed minimum wage and shorter working hours for the workers who do choose to work and earlier retirement ages. Society should not be worse off as improved technological options become available.

9 comments to Technological unemployment

  • Stan Griswald

    Harry

    Why the conversion to ludditite nonsense. You’re much better than that.

  • hc

    Try reading the link before commenting Stan.

  • Stan Griswald

    I did. Then I arrived at this bilge.

    “argues David Graeber, an anthropologist at the London School of Economics, much of modern labour consists of stultifying “bullshit jobs”—low- and mid-level screen-sitting that serves simply to occupy workers for whom the economy no longer has much use. Keeping them employed, Mr Graeber argues, is not an economic choice; it is something the ruling class does to keep control over the lives of others.”

    Do really believe that? Taking it apart this academic is actually peddling conspiracy theories.

    Also why assume fast paced development in machines without discussing advances in brain science, which is arguably moving at a faster pace.

  • hc

    Its a good article Stan based on the views of a whole lot of really prominent economists. You select one quote by an anthropologist (that has some point to it) and make the leap to say I am a Luddite. I don’t know. Did you have a bad day?

  • Stan Griswald

    What’s the good point? My day’s about average.

  • a very boys own story.

    if you are a women, that last 40 years have all done very well for you see http://scholar.harvard.edu/files/goldin/files/goldin_aeapress_2014_1.pdf where Goldin says

    The converging roles of men and women are among the grandest advances in society and the economy in the last century. These aspects of the grand gender convergence are figurative chapters in a history of gender roles.

    The gender gap in pay would be considerably reduced and might vanish altogether if firms did not have an incentive to disproportionately reward individuals who labored long hours and worked particular hours.

    most labour market analysis must be broken down by gender to be meaningful!

  • derrida derider

    Harry’s right, Stan. It aint just that pinko – nay, deep red – anthropologist Graeber who worries about “secular stagnation”. Some impeccably mainstream economists are worrying about diminishing returns to technology too. Though I would agree that Graeber’s “Debt – the First 5000 years” book is far more impressive than his “Bullshit Jobs” magazine article. Of course it may all ultimately be nonsense as some stunning technological breakthrough may happen tomorrow, but it’s not obvious nonsense (ie there’s evidence for it) and can’t be dismissed as casually as you do.

    Robert Gordon is a worrier, for a start. Larry Summers, for another. Plus of course there’s that big new book by the MIT economist Thomss Piketty on the long run effects of a chronic slowing in innovation (very unpretty – some of Marx’s analytic points start to become true for the first time). Admittedly Piketty is a tad pink, but still he amasses some impressive evidence and analysis on what’s been happening the last 20 or 30 years.

    Oh, and Jim is right about the tendency of labour economists to undervalue the advances for women. Claudia Goldin’s spouse (Larry Katz) is one prominent labour economist who would not, though – Claudia has an assertive personality :-).

  • Stan Griswald

    Derrida

    Whatever happened to the idea that better technology reduces working hours?What’s so wrong with thinking that in x number of years people will be complaining about the drudgery of working 20 hours per week and earning treble what they are now in terms of purchasing power?Instead of worrying about the future , let’s try to be a little more optimistic. The nature of work will change.

  • derrida derider

    Stan, the argument is that there is evidecne of diminishing returns to technology, which means that those smaller returns go increasingly and systematically to the owners of ACCUMULATED capital rather than to labour or to new venture capitalists. That has all sorts of consequences for income distribution, democracy and macroeconomic stability.

    Its quite a technical argument – not a crude conspiracy theory about “the bosses getting together to exploit the workers” at all. As I said it may easily turn out to be wrong, but it’s not a silly thing to worry about given the economic history of the last few decades. And it is also quite consistent with a story of higher aggregate production per hour worked leading to a reduction in aggregate desired hours worked.

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