Atlantis wrote:Just by repeating the same old fallacy over and over again doesn't make it come true. Automation has always produced more jobs than it destroyed.
It's a fallacy to assert that what happens in the past will necessarily happen in the future. It might
, of course, but it would be foolhardy to take it as a law of economics. Just as it would be foolish to think Moore's Law can continue to hold true indefinitely. The industrial revolution and cheap energy were a blip in human history; many of the "truths" we hold about economics are actually true within only a very narrow set of circumstances.
It's not even true in the past, much less in the future. Automation (in the general sense) produced a wealth of new jobs in the first half of the twentieth century. In the second half, this tapered off. We now produce fewer new jobs for every one destroyed.
An MIT study predicts nearly half of all jobs will be obsolete in twenty years.
The reason is simple: increasing productivity by automation results in more revenue (more wealth is created).
This is true, but of limited utility to your argument. The increased revenue could be used for stock buy-backs, or simply sit in treasuries and RE. The top 1% of U.S. earners (median income, $1.4 M) got 36% of their income from capital gains — all invisible in the standard measure of “income.” This is only realized capital gains, and it ignores capital gains from the $20T+ of invisible assets held in offshore tax havens. This diverted capital now exceed the entire annual GDP of the US. Not too many jobs being created by this revenue, eh?
The higher revenue is in turn spent on services we haven't been able to afford in the past. The number of useful jobs is unlimited. What is limited is the revenue to pay for these jobs. Thus, more automation results in more revenue which results in more jobs.
happen, but it won't. Revenue produces jobs only to the extent that new demand is created. Consumers can't create more demand without having some increased access to this revenue. In the post-Thatcher/Reagan era an increasingly diminished proportion of revenue goes to consumers. Where's the new demand?
Nearly 51 million households don't earn enough to afford a monthly budget that includes housing, food, child care, health care, transportation and a cell phone, according to a study released by the United Way ALICE Project. That's 43% of households in the United States. Not a lot of room for increased demand.
Austerity measures have created a similar aggregate demand deflation in Europe and the UK.
That's the reason why advanced manufacturing countries like Germany and Japan will always suffer from a shortage of labor.
The shortage applies mostly to low-paying jobs of the kind usually delegated to immigrants. There's been no upward pressure on wages - what you would reasonably expect from a tight labor market.
You can't predict the future by viewing it through the rear-view mirror of the past.
The questions you raise are to some degree empirical, and will only be resolved by the passage of time.
Workers are also consumers. The wheels of industry won't turn without consumers.
This doesn't seem to bother our political leaders very much, does it? Capacity utilization has been trending down for three decades - long enough to realize it's not a cyclical phenomenon. This brings up a troubling question: what good is increased efficiency, when consumers can't afford to buy the things we already produce?
I quite agree with much of what you are saying. We should have well paying jobs for everyone with shorter work weeks, longer vacations, and earlier retirements. Our productive capacities make this possible, yet we continue to march in the opposite direction.
Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.