“Destroyed a thousand times, it has risen a thousand times out of its own ashes as hardy and vigorous as ever.” What was Henry Hazlitt referring to in Economics in One Lesson? He was talking about the idea that technological progress would put everyone out of work if the government didn’t intervene on the workers’ behalf.
In “Is Greater Productivity a Danger?” David Gordon destroys the argument of Professor Tim Jackson who, writing in The New York Times, suggested that “increasing productivity threatens full employment.” On day 7 of the 30 day reading list Professor Gordon writes that the free market is all too often blamed for ills that it is not in fact responsible for – pollution and depressions, among others – but “we really have gone beyond the pale, though, when the market is blamed for something good.”
Indeed, greater production levels couldn’t be a better outcome, since producing things that satisfy human wants is the single purpose of the market! As I mentioned above, Henry Hazlitt covered this issue of mechanization killing jobs in chapter 7 of his primer Economics in One Lesson.
He writes how, followed to its logical end, this argument would mean that: “Not only should we have to regard all further technical progress as a calamity; we should have to regard all past technical progress with equal horror.” But, he is also careful to point out that: “Theories as false as this are never held with logical consistency….” If these theories were carried out logically, he explains, using reductio ad absurdum, the argument could be made in favor of destroying all trucks and just hiring people to carry freight on their backs, since it means more people could find work.
But the reason Jackson is so repulsed by the idea of increases in production is that he has a skewed understanding of what a job is and what the economy is here to provide. He sees jobs as ends, and believes that firms ought to hire people simply so they’ll have money to consume things. But the economy – and those who act in it – isn’t here to provide employment; they’re here to provide things for other people. In that way jobs are not ends, they are means to producing goods and services which relieve economic scarcity for others.
Nevertheless, Jackson has presented a solution to the non-problem he’s conjured up. He wants the government (big surprise) to use the tax code in order to engineer society to his liking. He believes the proper levels of tax penalties and tax credits on just the right industries will achieve his vision of labor moving into the “caring professions” as he refers to medicine, social work, and teaching.
Professor Gordon notes that to an extent Jackson is right, in the sense that greater productivity allows for other uses of one’s time. But he asks rhetorically why this might be a problem, pointing out that “Human beings have unlimited wants, and there are always new uses for human labor.”
Where might this labor go, if automation could provide virtually everything we need or want? First, it’s important to understand that not only would goods be plentiful, but so long as the production of money isn’t subject to the whims of a central banker, prices would be stable, if not gradually falling over time. This would allow the standard of living to gradually increase over time as well.
And one possibility is that a lot more people could afford to buy services once only available to more affluent consumers. It’s possible that tailored clothing, detailed cars, and professionally decorated homes become more common. Jobs might open up for personal chefs, gardeners, maids, and tutors in all fields. A world of music, art, and other entertainment that once had to be put on hold while creative minds worked producing other things could be shared with the world.
This is all possible, but only if people like Tim Jackson toss out their myopic notion that a fixed amount of wealth exists and humans need some coercive body to regulate their behavior.