Wednesday, July 5, 2017

David F. Ruccio — Technology, employment, and distribution

I can make the case that things would be much better if the adoption of new technologies did in fact displace a large number of labor hours. Then, the decreasing amount of labor that needed to be performed could be spread among all workers, thus lessening the need for everyone to work as many hours as they do today.
But that would require a radically different set of economic institutions, one in which people were not forced to have the freedom to sell their ability to work to someone else. However, that’s not a world Autor and Salomons—or mainstream economists generally—can ever imagine let alone work to create.
Technological innovation increases the potential to substitute leisure for work, but that is ruled out institutionally and operationally in a capitalist system operated on wage labor. Rather than increasing leisure the gain from increased productivity goes to owners of technology and technology workers. This puts downward pressure on other workers and increases unemployment in less desirable work. The result is increasing inequality and social dysfunction.

Occasional Links & Commentary
Technology, employment, and distribution
David F. Ruccio | Professor of Economics, University of Notre Dame


Andrew Anderson said...

Technological innovation increases the potential to substitute leisure for work, but that is ruled out institutionally and operationally in a capitalist system operated on wage labor. Tom Hickey

What part of any definition of "capitalism" requires government privileges for private credit creation?

Yet it is government privileges for private credit creation that have enabled the finance of productivity increases WITHOUT borrowing from or sharing equity with workers. That's a subtle but effective form of theft.

Dan Lynch said...

Well said, Tom.

Or, to the extent that labor has bargaining power (not much these days), labor can demand higher wages as productivity increases, and use the wages to buy more I-Things. However, there is no evidence that having more I-Things makes us happier.

When I was an employee, I would suggest to my boss "instead of giving me a raise, I would rather have more time off to spend with family and hobbies." Instead I would get a raise but be expected to work myself to death. That's the culture in America.

Neil Wilson said...

"Technological innovation increases the potential to substitute leisure for work"

Which sounds like a fab idea until you realise that leisure is just work that you pay for, whereas work is leisure you get paid for.

The problem, as ever, is the shortage of jobs that drives the chase to the bottom in the quality of work.

Leisure is available to those with the money. Everybody else gets alienation, isolation and a desperate need to kill meaningless hours. As we see amongst a good chunk of the poor retired and the current unemployed.

The idea that enough stuff to do will magically pop into existence is just as daft a concept as 'markets will provide'.

Too much leisure is just as dangerous an idea as too little.

Tom Hickey said...

Too much leisure is dangerous?

The developed world went from 7 days a week and at least 10 hour days to am eight hr day/five day work week with benefits, vacations, holidays, and sick leave, workers' comp and worker protections.

With the reduction in labor bargaining power and competition with the emerging world where there are no restrictions on hours, workers work 7 days, there are no benefits or protections, and no paid vacations, leisure in developed countries is reserves for either the upper 20% or basically "voluntary unemployment." And even most of the upper 20% are on 24/7 with cell phones.

This is headed in the wrong direction for personal well-being and social harmony.

Bob said...

Too much "leisure" was one factor that led to ISIS.

Dan Lynch said...

That's right, Bob! If Neocons and the CIA had been kept kept busy doing real jobs instead of sitting around dreaming up schemes to destabilize the Middle East, ISIS and Al-Qaeda might never had happened.

Indeed, too much leisure can be dangerous. At least, Cliven Bundy thought so:
“I want to tell you one more thing I know about the Negro ... there is always at least a half a dozen people sitting on the porch — they didn’t have nothing to do. They didn’t have nothing for their kids to do. They didn’t have nothing for their young girls to do."

“And because they were basically on government subsidy, so now what do they do? They abort their young children, they put their young men in jail, because they never learned how to pick cotton. And I’ve often wondered, are they better off as slaves, picking cotton and having a family life and doing things, or are they better off under government subsidy? They didn’t get no more freedom. They got less freedom.”

Neil, I don't want you to be alienated, isolated, or desperate to kill meaningless hours, so you are welcome to come over here and do my work and chores for me. I won't charge you anything for it even though you consider it a form of leisure.