Technology and unemployment

rdan

Sandwichman, the go to guy on labor issues and author of the series Chapman, Labor, and Unemployment at Econospeak suggests an alternative to the myth of supremacy of capital, which is after all an idea that reminds me of King Midas in our little child version, but in the adult world has several versions some of which include the daughter “life”, but in the Illiad is described as a son and a “reaper of men”.

Technology doesn’t destroy jobs. What technology does is make possible and make necessary either increased consumption, increased leisure or both. Unemployment results not from a quantity of jobs deficit but from an adjustment deficit. Unemployment results, that is to say, from a failure to establish a new income, consumption and work time regime commensurate with the new production potential offered by the technological advance.

Furthermore, adjustment is no more “automatic” than is technological change. Hello? Has anyone ever heard of “patents”? Or of government financial subsidies to research and development. On the contrary, adjustment should be considered an inherent part of the reciprocal process of technological innovation. Why it is not treated as such by so-called economists is a question 26,000,000 unemployed and underemployed Americans deserve an answer to.

Update: Yves Smith has a post worth reading at Naked Capitalism regarding Ambrose Evans-Pritchard in The Telegraph.

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