This debate goes back as far as Ricardo. It implicitly hinges on a two stage argument about whether the spread of the new technology employs enough workers producing the capital goods. Once the investment is in place, the problem begins again.
Tugan-Baranovsky created a model that supposedly showed that the new investment could come on at a pace to maintain full employment. The other part of the argument is that improved technology drops prices and increases real incomes. Yeh, sure it does. Eugene Coyle wrote:
It is widely believed -- and written about by economists, even -- that technology advances cost jobs. Leontief believed. Rifkin and many others have written about it. But most economists insist that "more jobs are created than destroyed." But are jobs really keeping up? Is the weak market for labor -- indicated by falling or level real wages -- evidence that jobs are being detroyed by "productivity" or "technological advances" faster than they are created? Are lower wages for most evidence of a weak labor market, despite the long term increase in numbers of jobs? What are your thoughts? Gene Coyle
-- Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901 www.michaelperelman.wordpress.com
