| | Brent,
Unemployment will skyrocket due to three things:
(1) Technology is becoming so cheap and effective, it is replacing human work. Can you deny what is happening all around our neighbourhoods? Bank machines and the Web replacing bankers. Travel agents replaced by ...
This argument is old and stale, Brent.
Yeah, sure, you decorated it with all the new bells-n-whistles of the age -- but that is always so. It is merely an extention of the argument that the cotton gin increases unemployment by reducing demand for manual labor. But did the cotton gin do this? No.
Instead of reducing a demand for manual labor, the cotton gin increased the production of cotton by 50-fold in 20 years. A 50-fold increase in the production of something leads to an increase in employment (packaging, shipping, sales, etc). Now, you can sit there and say: "Well, but if we purposefully remained on a level where we were 50 times less productive (pre-cotton-gin); then we would have 50 times more employment -- because of our self-promulgated inefficiency!"
But this reasoning misses the point. Yes, it's true that, if we purposefully remained inefficient, then it would take more man-hours to get anything done -- but the salient point is that lifestyles improve, in lock-step, with efficiencies; so that more is demanded out of life after every innovation. Technology creates jobs, it doesn't crowd them out. In the case of the cotton gin, 50 times more cotton was demanded -- leading to a net increase in (packaging, shipping, sales, etc). employment from this technology, not to any net decrease.
Ed
p.s. If you remain stuck with Marx's (manual) Labor Theory of Value rather than using the more true -- and therefore, more appropriate -- Marginal Utility theory of value, promoted by Carl Menger; then you may continue to believe (even in the bold face of contradictory evidence) that technology reduces jobs.
(Edited by Ed Thompson on 3/08, 1:54pm)
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