Wednesday, October 06, 2010

The destructive assumptions of "Say's Law" with regards to technological unemployment

"Say's Law" in its popular form is that supply creates its own demand. There are a couple of applications for this, one of which has to do with people put out of work not because of a downturn in the economy but because technology has rendered their jobs obsolete. Ideally, the amount of people who are now unemployed would drive down labor costs because of more competition for jobs and so make it attractive for businesses wanting to expand, or to start up, to hire more people. I say 'ideally' not in a moral sense but in the sense of this is what the principle if working according to its premise would do. But there's a problem there. If a person's job is eliminated by technology it means that the economy can get along just as well without them being employed, putting them outside of the system. The only way for them to be integrated back into the system is if the economy expands and grows. Economic expansion and growth doesn't just mean more businesses but more production, which needs more consumption to make it work. Therefore, the cycle of technological unemployment combined with businesses taking advantage of Say's Law is premised on infinite and continued expansion not just of production but of consumption as well. While at the beginning of technological innovation more consumption and more production might have been a good thing, we're at a point now where excess consumption is destroying the planet. Technology and the disruptions that technology creates are now fueling this destruction through making increased consumption and further consumption part of normal life. 

Of course distribution within the system itself is unequal, and the consumption that already exists could be made more fair, and this should be done, but even so it will not stop the total consumption that's going on which is destroying the planet. This can only be done by decreasing consumption as a whole. There needs to be alternatives to technological unemployment that don't fuel the increasing consumption of natural resources and the destruction of the eco-system.

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