Saturday, August 1, 2009

Technological Unemployment

by the Sandwichman

"Not much is said these days about technological unemployment." (Comment by Joseph DeLassus of MO on a U.S. News and World Report blog)
Most people with intellectual honesty know by this time that the chief cause of the great depression is technological unemployment; in other words, our collective failure to adjust working time to fit the greatly increased efficiency of our productive system.

Knowing the root of our troubles, the remedy should be simple. Reduce the working time immediately. The bill for the thirty-hour work-week, now before Congress, should become a law at once.
-- Samuel Teitelbaum, Letter to the editor, New York Times, January 7, 1933.
Sandwichman wants to know, "Is there such a thing as 'technological unemployment'? If there is such a thing, might it be the 'chief cause' of the current recession? If it is even possible that it is the chief cause of the current recession why does NO ONE mentions the possibility?

"Jobless recovery" is a gutless euphemism for technological unemployment. Remember that.

16 comments:

Michael said...

If it's not the cause then at least it must be the solution. (ie the solution lies in an understanding of 'technological unemployment' and the great gift it is offering us)
I've been interested in this subject for years and always wonder how it can be so easily dismissed by mainstream economists - ie is there a flaw in the less work argument that I am blind to?.
I've finally come across an economist who is willing to engage in a dialogue with me about it. (will let you know if it goes anywhere fruitful)

Shag from Brookline said...

Wasn't Kurt Vonnegut's "Player Piano" about technological unemployment?

Sandwichman said...

Prolonged Aid to Unemployed Is Running Out

"Over the coming months, as many as 1.5 million jobless Americans will exhaust their unemployment insurance benefits, ending what for some has been a last bulwark against foreclosures and destitution... Even if the recession begins to ease, economists say, jobs will remain scarce for some time to come."

But whatever you do, don't call it "technological unemployment."

Anonymous said...

Man, you are really hung up on this subject.

Anonymous said...

We are undergoing a transformation in manufacturing that is eliminating jobs much the same way that agricultural jobs were lost prior to the Great Depression. At the end of the 1930s, the lost farm jobs were transferred to the mfg sector. We need a new transformation. What needs to be done that would employ a lot of people? Education? Health care? Electrification of transportation? Addressing global warming?

Yes we have unemployment cause by apply technology to the mfg sector. However, we should also be able to increase employment by applying new technology to create new sectors.

Barkley Rosser said...

I think that technological unemployment can and does happen. What I do not find credible is having it explain short-term downturns like now or the Great Depression, although the GD did last awhile.

Anonymous said...

Technological unemployment is worse than a euphemism, it is a deliberate distraction - a feint to blame on technology what is simply a matter of economic policy.

The feint is two-fold

First, unemployment is blamed on technology;

Second, labor saving technology is treated as a problem, not a goal.

Sandwichman said...

Anonymous,

I'm hung up? Well you, sir, are anonymous.

Barkley,

You say, "what I do not find credible..." Please state what you believe to be the case for 'technological unemployment' and why exactly you don't find it credible as an explanation for 'short term' downturns. My own position would be to support Luigi Pasinetti's explanation in Structural Change and Economic Growth, which is basically a story about the perils of synchronization. Is that the explanation you don't find credible?

Anonymous #2, If you paid attention, you might have noticed that Teitelbaum didn't blame unemployment on technology but on the "collective failure to adjust working time to fit the greatly increased efficiency..." The term technological unemployment is just shorthand for the whole two-step process of 1. efficiency gain and 2. policy failure.

Anonymous said...

"Anonymous #2, If you paid attention, you might have noticed that Teitelbaum didn't blame unemployment on technology but on the "collective failure to adjust working time to fit the greatly increased efficiency..." The term technological unemployment is just shorthand for the whole two-step process of 1. efficiency gain and 2. policy failure."

OKay, I will admit I didn't pay attention - kneejerk reaction to the phrase - so I will just shut up now. However,I continue to maintain it is an unfortunate phrase...

Anonymous said...

How about "policy driven unemployment" instead?

To denote that it is the policy of Obama and Congress to allow unemployment to rise unnecessarily while hoping debt-financed stimulus eventually reverses the situation.

Sandwichman said...

Anonymous (#2),

You have a valid point about it being an unfortunate phrase. I would be tempted to call it "maliciously policy-induced torture of a selected reserve portion of the workforce, aided and abetted by the acquired intellectual impotence of the economics priesthood."

But since it is customarily referred to as technological unemployment, I'll conform to the nomenclature.

Sandwichman said...

Another anonymous, (I'll call you "new sector anonymous" since I've already used "anonymous #2" for [presumably] someone else).

You wrote, "we should also be able to increase employment by applying new technology to create new sectors."

Interesting... but not very specific. To paraphrase H.L. Mencken,which new sectors? In what order? And, I would add why don't these new sectors emerge BEFORE the unemployment occurs? Unless you can satisfactorily answer those questions, you're just blowing smoke out of your posterior, nsa.

TheTrucker said...

At present "thorium reactors" are a new scientific rage. I have yet to see any of the typical X "tobacco company scientists" shilling for the oil companies slapping the pseudo science in this one.

Everything I see says this is the number one answer to the energy problem yet I see no government program like the "Manhattan Project" going forth. We could employ a lot of technologists and scientists on this rig. Then there are the HVDC grids to send all this power to all the places needed and the hybrid cars that will use the new energy.

But no matter what we do we will not have enough jobs if we don't learn to cut the work week. We can't all be technogeeks and scientists.

Anonymous said...

"Yes we have unemployment cause by apply technology to the mfg sector. However, we should also be able to increase employment by applying new technology to create new sectors."

I think you have hit on something here other anonymous guy: According to Chris Martenson, the economy shrank by 4.3 percent in the last quarter but managed to eke out only a negative 1 percent fall with government spending on armaments.

This could be our new bleeding edge technological breakthrough. We could call it the "Full Spectrum Dominance" sector.

We have also seen an uptick in Washington's fuzzy math: According to Chris, Washington reported that PCE fell by 2.3 percent even though corporate revenues fell by 15 percent.

We could call this the "Phantom Consumption" sector.

Then, of course, if inventory losses slow, that would add another 1 percent to GDP next quarter; and, about 1.5 million people will drop off the unemployment rolls...

I think we could really cobble together a mess of impressive stats even as we plummet into the horrifying abyss of a permanent deflationary spiral...

Rupert said...

I'm coming to this thread a little late, but what the hay, I have something to say.
I've recently read an article from the royal Academy of Engineers the contents of which should concern us all. It asks us to begin to consider the social, ethical and legal implications of autonomous technology that is either 'on the horizon' 'in development' or 'waiting to go to market'. The implications to what we currently perceive as useful skilled and semi skilled labour considerable. Health care, transport, education. It is beginning to look like humans will loose the edge we have over current tech sooner than we think and it is time economists started acknowledging the elephant under the carpet

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