Dismal Economists Or How Technology Is Destroying Jobs

Technological Change Becomes A Scapegoat

I have recently written a blog post about modern luddites arguing about the dangers of robots and how they will displace labor. Every age has their luddites.

Technological Change Destroys Jobs Faster Than It Creates New Ones

This about sums up a new “feature story” in the MIT Technology Review titled “How Technology Is Destroying Jobs” written by its editor David Rotman dated 6/12/2013. The MIT Technology Review was the last publication I would have expected such an article to come from.

In the opening paragraph we read (Emphasis added):

“… it is easy to miss just how provocative Erik Brynjolfsson’s contention really is. ­Brynjolfsson, a professor at the MIT Sloan School of Management, and his collaborator and coauthor Andrew McAfee have been arguing for the last year and a half that impressive advances in computer technology—from improved industrial robotics to automated translation services—are largely behind the sluggish employment growth of the last 10 to 15 years. Even more ominous for workers, the MIT academics foresee dismal prospects for many types of jobs as these powerful new technologies are increasingly adopted not only in manufacturing, clerical, and retail work but in professions such as law, financial services, education, and medicine. … But Brynjolfsson and McAfee’s claim is more troubling and controversial. They believe that rapid technological change has been destroying jobs faster than it is creating them, contributing to the stagnation of median income and the growth of inequality in the United States.”

These two authors, Mr. B. and Mr. McAfee, have also published a book about this subject in 2011 titled “Race Against the Machine”. In their online excerpt the authors state “We can’t win that race, especially as computers continue to become more powerful and capable.” Oh, really!

Just Academic Baloney

To blame the “rapid technological advances” for the sluggish employment growth over the last 10 years or so is a seriously flawed economic analysis. If anything is the cause the economic malaise of the past 10 years are failed economic policies, excessive government spending over the past 2-3 decades, excessive government debt, high burden of taxation and regulation, and reckless central bank manipulation of interest rates and other monetary policy failures.

Economics is not a dismal science, but some economists are dismal and some are Luddites and dismal combined in one person.

Like the steam engine or the spinning jenny or industrial robots before, this technological revolution will not lead to employment disaster. Who builds robots? Who repairs robots? Who writes software, who designs networks, data centers, etc.? I am still waiting for a robot to cut my hair (I wish they would be available).