One of the most interesting topics in modern times is the “robots eat all the jobs” thesis; best book on topic: The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. The thesis is that computers can more and more substitute for human labor, thus displacing jobs and creating unemployment. At core, this is Luddism  — “lump of labor” fallacy, that there is a fixed amount of work to be done.

The counterargument is Milton Friedman: Human wants and needs are infinite; there is always more to do. 200 years of history confirms. To avoid the Luddite mistake, you must believe “this time is different”, that either (a) there won’t be new wants and needs (vs human nature), Or (b) It won’t matter that there are new wants and needs, most people won’t be able to adapt to contribute and have jobs in new fields.

While it is certainly true that technological change displaces current work and jobs, and that is a serious issue that must be addressed, it is equally true, and important, that the other result of each such change is a step function increase in consumer standards of living.

As consumers, we virtually never resist technology change that provides us with better products/services even when it costs jobs. Nor should we. This is how we build a better world, improve quality of life, better provide for our kids, solve fundamental problems.

Make no mistake, advocating slowing tech change to preserve jobs = advocating punishing consumers, stalling quality of life improvements.

So how then to best help individuals who are buffeted by producer-side technology change and lose jobs they wish they could keep? First, focus on increasing access to education and skill development — which itself will increasingly be delivered via technology.

Second, let markets work (voluntary contracts and trade) so that capital and labor can rapidly reallocate to create new fields and jobs.

Third, a vigorous social safety net so that people are not stranded and unable to provide for their families.

The loop closes as rapid technological productivity improvement and resulting economic growth make it easy to pay for safety net.

Source: Tweets – 1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16



Join the conversation! 3 Comments

  1. Great subject, and we can’t stop evolution and creation of new technology and development. In fact changing situations are mostly due to costs and cheaper ways to improve business profits with workers at the lower end of this bracket. The robots are reliable and faster with impact on increasing their net gains over a certain time limit, and for the future, this trend will only gain speed

  2. It’s cheaper to manufacture goods over seas where there is no bottom to minimum wage. “Consumer standards” as you call it, is the reason why America is the most hated country in the world. Stop it with consumer standards. Pay more and support local. In America we have decent wages, consider that when you shop and complain about the price of local products. Stop buying foreign products. If you pay the price that hard working Americans deserve to be paid, then your “consumer standard” will significantly drop. Production in America is almost dead, wake up! Without production no one will earn any money to consume anything.

  3. Even if one country chooses the dubious path of trying to slow growth in technology in order to preserve jobs…that doesn’t mean another country would. Technology today tends to be global; artificial limits in one place won’t work for long. One superior technology in Israel could easily displace an inferior one in the US.


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