Asking The Man in the Street: Research v. Rhetoric
Richard Layard, How to Beat Unemployment, 1986:
“If you ask the man in the street (not Wall Street) what has caused our unemployment, nine times out of ten he will say that it is machines displacing people. In fact for this reason he is often deeply pessimistic about whether we could ever have full employment again.”
Dear Professor Layard,
In your 1986 book, “How to Beat Unemployment,” you wrote: “If you ask the man in the street (not Wall Street) what has caused our unemployment, nine times out of ten he will say that it is machines displacing people. In fact for this reason he is often deeply pessimistic about whether we could ever have full employment again.”
I am curious. Did you ask “the man in the street”?
Cheers,
The Sandwichman
Note the book was written in 1986 before China became a big part of the world economy, and before the Berlin Wall fell. Historically it was true, a lot of farm folks lost jobs (and/or moved off the farm and sold out) because of the mechanization of agriculture (going from 50% plus of the population involved directly in ag to 2% today). Such items as harvesters replacing hand picking (corn) etc as well as moving to the tractor from horses and mules. So in most peoples minds at the time this was why jobs were lost. (might not be true 30 years later ) The meme about machines dates back at least to the industrial revolution and the various mechanization steps in the manufacture of cloth.
This was the view back in the 1930s as well. For example, from Fortune 12/32: http://www.kaleberg.com/obsolete/obsolete.pdf
Some of those improvements involved two or more orders of magnitude output for the same labor. It was only World War II and the post-war high tax rates and pro-union regulation that created enough demand for the increased production. Even then, they had to kick women out of the workforce.
The problem isn’t that automation eliminates jobs. The problem is that automation doesn’t increase demand. We’ve had plenty of automation and productivity improvement, but wages have been flat for thirty plus years now. If someone could invent a machine that let people buy more stuff, that would be a real breakthrough.
“The problem is that automation doesn’t increase demand.”
So how about a national dividend scheduled to increase over 30 years and be paid for by increasing environmental taxes.
Maybe he asked Thomas Friedman to ask his cab driver?
JDM, you win this thread!