Is structural technological unemployment possible?

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Is structural (long-term) technological unemployment possible?

By that, I mean is it possible for an economy to permanently lose jobs due to automation? The standard, neoclassical argument seems to be that such (net) job losses are only temporary shocks as the labour market adjusts to a new equilibrium. That is, if machines replace farm workers, then they'll (as in "the labour force in the long-run") just become cotton sewers, if machine replace cotton sewers, they'll become auto-workers. If machines replace auto-workers, they'll become cashiers. If electronic scanners replace cashiers, then they'll just become sales associate.

Markets, in the long-run, ensure that the labour force is redeployed to another area after each change.

But is it possible that the process of automation could continue to the point were there are permanent net job losses - when we can produce almost anything anyone would want produced employing less human labour? Hasn't the steady decline in the number of hours worked over the 20th century reflected, at least some what, less need for human labour?

If not, why not?

Well.... sure, it's possible.

So, let's imagine that we discover AI and can now construct robots that do all of the same jobs that people can do now at an equal or greater level of competence, EXCEPT they are cheaper to maintain than a person and will work for peanuts. This would result in large-scale permanent structural unemployment, because for any job a human being is doing at this point could be replaced by a cheaper and potentially better AI, and employers will generally pick the AI. (And to take this further, we can imagine AIs that are indistinguishable from humans and all of the rest)

Does this work as sufficient to show the possibility of this?

Yes. It is possible. Aristotle said that if a plow could turn the earth all by itself a farmer would not need slaves. If human labor can be replaced by a robot or other machine at a lower cast then that type of human labor would be eliminated. Do not be surprised. We no longer have buggy whips. And Morse telegraphers are no longer in great demand. We no longer use horses to pull street cars.

It would be a useful exercise to list all of the occupations that have been mechanized or automated.

Which gets us down to the Real Problem. An economy which depends on the purchease made by wage and salaried laborers is no longer going to function when machines are doing, say, 80 percent of the work. We are going to have to restructure our economy so that the goods and services produced are allocated to end consumers on a basis other than wages. Good problem, yes?

ruveyn

as i see it we have already hit that problem to an extent,

in some areas the actual work needed cant satisfy the need for full time jobs to the extent it could before.(in the west)
essentially i think that what should have gone into average work hour reduction in the west has gone into the pockets of various companies and institutions, private and public.

when this phenomena becomes global then it will only exacerbate the problem.

ruveyn, would a rise in worker value pr time unit be able to balance the wage/work relationship in your mind?
the more i thin about it the more problematic it becomes since such a rise in value would also neccesitate at least some level of skill or specialization from the worker before it would be desirable to hire them.

perhaps there is a hybrid?

My personal opinion is that it's already starting to happen. It isn't so much that jobs disappear completely though. It's more that they've become less steady. Jobs associated with leisure activity are subject to large fluctuations because people easily cut back on optional spending any time they they are made to feel poorer (lose money in the stock market, have to take a lower paying job, etc...). If this cuts off income to a certain segment of society it can easily spiral down. The only solution to this problem is to make sure relatively well-off people keep increasing their level of spending so as to distribute their wealth more broadly in the economy. I have yet to see an argument against the Keynesian "paradox of thrift" in a technologically advanced society.

There's an argument that saving rather than spending isn't necessarily a bad thing if the savings is going to new investment that creates other jobs. The problem is savings or investment isn't guaranteed to create new jobs as much as spending is guaranteed to preserve an existing job. Investments can also go into assets that don't really employ anyone but instead lead to the beginning stages of a bubble. I remember the housing bubble originally started when people thought housing was a "safe" investment when the internet bubble fell apart. I somehow doubt that the housing bubble and financial speculation were the root cause of the 2007 downturn and subsequent worldwide depression. It seems like too many economists want to just ignore things like unsustainable the build ups of private debt, trade deficits from the displacement of production, and even technological destruction of old industrial jobs.

I hate it when extremely pro-capitalist people accuse those posing the question of technological unemployment as being anti-technology or anti-leisure. That's not the point at all. The point is not the technology. The point is the distribution system where the only source of income from which to access needed resources is through either traditional employment or coming up with something to hawk to people who do have money even in a climate where they really aren't interested in spending much.

In the long run I don't think so. We are just going to have to figure out a way of allocating consumption rights to people that is not based on a wage. If most people will not be working, then some system of "social credit" will have to be formulated. A large mass of unemployed people is not going to sit still unless they are provided with a minimum mix of consumer goods (including food and shelter). We will have to redefine what people's "rights" are in regard to be allocated consumer credit. It comes down to this: anyone alive a breathing will have to be granted "rights" to a basic mix of goods and services which will include food, clothing, medical care, a modicum of entertainment and such like.

If you think about it, this is not all that far from what Marx proposed. I have no idea how to cook up such a system in which people will be happy and satisfied enough to accept their "allotment" and not feel they are being treated like crap. The people at the "top" of this system are going to be the allocators of social credit and the few humans need to maintain and improve the system of automation and mechanization. We will still need inspectors and repair people at some level, but that will be a very small fraction of the population. Social credit will still have some of the functions of money in indicating which goods people want to use or consume so some kind of supply and demand principle will still be operative.

ruveyn

Conservatives will not accept welfare of any kind.

perhaps something akin to the concept behind guaranteed annual income, one of the advantages of that aproach is the relative ease with which one could implement it, it could reuse much of the same tax and financial legislation, with major changes only in select areas, that said tax and financial reform is needed and would probably work better from the ground up anyway.

the utopia would be a system that was as basic as rights, meaning no beurocracy and no barriers, yet still maintain a reward for actually achieving something,
in the process we should remove intellectual property and make that compensation a direct part of such a system, this would allow innovation and broad implementation of technology to be very efficient.

perhaps one could make a central ad hoc server for people to sign themselves up for whatever job is needed, instead of actual employment for a fixed time, this could also cut down on waste and create competition for workers to hone their skills and for employers to offer fair contracts, no highly skilled worker would take a badly paying assignment just as no employer would accept someone without experience or discernible knowhow for an important job.

of course for many this would change little since they already have a relationship with their employer, nothing should prevent someone from having a long term job.

Isn't "stink pinko egalitarian redistributionism" a solution to said problem?

I believe his preferred phrase is pinko stinko, but you got the gist of it.

If full automation were possible then the cost of living should be zero, how is that a bad thing?

i dont think anyone here is arguing that it would be abad thing,

only that there would be a transitional period where old values would judge people in a new world in an unfair manner, all by circumstance and not law a far as i am concerned.

but imagine what we as a species could accomplish if we could garner real interest in self improvement and learning and have the time to actually implement it.

It would be a marvel. There is only one catch. We will have to construct an economic system that is not predicated on wage labor. The wages paid to producers in aggregate do not clear the market of goods and services offered for sale. Furthermore the incentives of the produce for profit system encourage the production of goods that will produce a temporary profit but go to waster because the wages of labor cannot match the price of the goods. A new set of incentives and a new way of allocating output of the (automated) means of production would have to be invented.

If a genuine Horn of Plenty were created and we could have pretty much anything we wanted at no cost of production by labor, what effect would that have on people. Would they become crazy with consumption. Would they go soft. Once the rigors of scarcity are eliminated or minimized whence comes the discipline of having to chose between scarce goods. One cannot have everything one wants or thinks he wants. Is plentitude really as good as it sound?

Who knows? Fortunately I will be dead and gone before such an end comes about. I leave it to my grandchildren to work out the details.

ruveyn

I think there's another misnomer here. I don't think it is the case that the need for work will ever diminish to near nothing. No matter how advanced society becomes there will always be valuable work to be done. The real issue is the failure of the profit motive can lead to waste. A lot of things that could be done (repairing crumbling infrastructure, etc...) aren't neglected due to lack of resources or lack of want for work. The real problem is we never have enough of this funny thing called "money". The productivity of the private sector relies mainly on private financiers who need a healthy enough prospect for return on their investment to justify their taking a risk of losing their money. What is absent in this kind of risk-benefit analysis is the true cost of not putting energy into certain things that end up benefiting a ton of people even when the direct financial reward to any potential investor is seemingly absent or even negative.

Apparently even Paul Krugman is now on board with this possibility.

Rise of the Robots...