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by ctw
2079 days ago
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I’ve come across a similar line of thought while reading about capitalism. When technology improves such that it takes less time to perform work, there are three possible outcomes: 1. The labourers finish the work in less time and get more leisure time (production and labourers stay constant, time spent decreases) 2. Some of the labourers are fired since fewer are needed to perform the same work in the same amount of time now (time and production stay constant, labourers decrease) 3. The same amount of labourers work the same amount of time, but produce more due to the increased efficiency. (time and labourers stay constant, production increases) In my experience, unless you work for yourself, outcome 1 will never happen. Outcome 3 is desirable from a broader perspective because that extra production must be benefitting someone. But I don’t see any upside to option 2. Some people lose their jobs and there’s no extra production. I guess you could argue it would have been a waste for them to continue working on something that could be done more efficiently without them, so in the long term it works out, but in the short term they lose. |
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That's because you're stopping too soon with option 2. There are actually two sub-options to option 2:
2a. Some of the laborers are fired, and they can't find any other work so they now aren't producing anything (time and production stay constant, laborers decrease).
2b. Some of the laborers are fired, and that means a pool of unused labor now exists, which entrepreneurs hire to do new jobs that couldn't be done at all before because there was no labor available (time and laborers stay constant, production increases).
Outcome 2a will virtually never happen in a healthy economy because there are always more things that people want, so there are always additional things that could be produced if labor were available. So what actually happens, at least in a healthy economy, is outcome 2b. If you're seeing outcome 2a, it means the economy is not healthy: something is preventing the natural process of labor that is no longer needed for existing production being redirected into new production. Almost always that something is the government.