March 10, 2013

Automation: Part 2

In my February column, “The challenge of automation”, I began a review of some of the ideas in Martin Ford’s book, “The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future.”

His basic premise is that as technology grows exponentially so will automation and its net effect will be to destroy more jobs than it creates causing unemployment to grow and economic chaos to ensue.

He concludes that we must start now (this was 2009) to plan for this crisis and take what steps we can to deal with it.

The author argues that since near full automation is inevitable, the best solution is to bite the bullet and pay the people who have lost their jobs to automation so that they may continue to consume goods and services so that the overall economy will not collapse.

He views both capitalists and workers as consumers, but since the workers are a much larger population, when the workers lose their jobs, they can no longer participate in the free market and the economy eventually tanks.

Ford suggests that the businesses that save money by replacing human workers with machines be taxed to pay the displaced workers, as machines are cheaper and have no associated payroll taxes, He understands that there will be a massive pushback against this idea as it smacks of socialism but believes attitudes can and will change especially under enormous economic pressure.

Ford also asserts that while providing additional educational resources will slow the job displacements of automation, it cannot stop the ultimate result of massive job losses. In fact, he insists that education alone is not the decisive factor determining whether a particular job can be automated or not.

Until recently, most economists have opined that automation displaces low-skilled workers more than skilled ones; basically blue-collar jobs are more likely to be replaced than white-collar jobs.

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