It may not even be a problem at all.
That is, in light of the massive revolutionary effects of automation and robotics that is happening as we speak, as we can see here, here and here.
It is potentially so revolutionary it is rightly being dubbed the “fourth industrial revolution.”
The warning signs have been here for years: e.g., a 2013 Oxford study suggests that about 47% of human jobs will be lost to AI by 2030. First, working class and then middle class jobs will be hit.
When, for example, machines can do the work of people in fast food restaurants, what sort of world will result for low-skilled and semi-skilled workers? Even offshoring will become pointless, if production by machines costs less than third world labour.
And don’t trust halfwit neoclassical economists to provide sensible analysis here, because their response is almost always that only if you make wages become flexible and rely on laissez faire market theology, then this will eliminate involuntary unemployment. That is rubbish. There is no reason to think a fantasy-world self-equilibrating market will solve the problem of mass unemployment, because it does not exist.
At the very least, all this suggests that the endless hysteria about shrinking working-age labour forces in the West is grossly exaggerated. If anything, fewer workers mean less of a problem with mass unemployment in the future. More likely, there will be plenty of people to look after the elderly and do whatever necessary work is left to people.
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Lord Keynes, is there a way I can get in touch with you? Like an email or something?
ReplyDeleteI prefer economic/political discussion in the comments section, really.
ReplyDeleteLeave a comment (which I won't publish) if you want to ask me some issue in private.
"That is, in light of the massive revolutionary effects of automation and robotics that is happening as we speak, as we can see here, here and here."
ReplyDelete-Not seeing any substantial evidence of it. Productivity is stagnating, not soaring. It's even worse in the U.K.
"And don’t trust halfwit neoclassical economists to provide sensible analysis here, because their response is almost always that only if you make wages become flexible and rely on laissez faire market theology, then this will eliminate involuntary unemployment."
-Well, considering the natural rate of unemployment isn't too different now from what it was in the late 19th century, it looks like those much-maligned neoclassical economists have been right all along.
(1) at the moment unemployment is the major trend to watch, not productivity
Delete(2) natural rate = fantasy world idiocy.
My 2 cents : the optimistic "back to equilibrium" scenario only stands if you assume that (1) there are plenty of needs that new activities could satisfy (2) people with the power to do so (be they government or private sector top executives) will be interested or compelled to have those needs satisfied.
ReplyDeleteThis was not allways the case during the last century (think only of the high unemployment in 1920' Britain) and I don't see how it might the case in any foreseeable futur. For example we might decide to retrain large part of the workforce so as to have many more healthcare / education / art professionnals (which was the kind of economic futur LK expected)... well, I don't think it to be on our rulers' neoliberal agenda, is it?
The real unknown (to me) is what about the energy depletion ? how is an even more automatised economy to function with less and less oil, uranium, etc. ?
Is that a topic of interest to some postkeynesian researcher you know of LK ?