Not a long time ago, I had a conversation with a friend about cars that could drive themselves automatically, and the reality of them existing one day. And the friend that I was talking to began to lament about how these vehicles would eventually put taxi drivers out of business. His point was basically how this one technological advance would be bad in the sense that it would do way with jobs for one segment of workers. My argument to him was that the new technology would actually create other jobs that had previously not existed at all and would make up for the jobs lost. Would the taxi drivers need to perhaps find a new profession? Probably. The same way the buggy drivers had to when the automobile became widely available after Henry Ford’s invention of the assembly line.
In Henry Hazlitt’s timeless book, “Economics in One Lesson”, he talks about a segment of the population that he refers to as “technophobes“. These are people resist technology advances because, in their mind they lead to the demise of some steady employment for some. They don’t consider that these new technologies don’t exist in a vacuum and require labor to sustain its existence. Technological achievements should be looked at as a labor-saving positives instead of a labor-robbing negatives. The empirical evidence shows time and time again throughout history that despite the introduction of new labor-saving technologies, jobs (as an aggregate) have not dwindled away. In fact, each major technological advance has brought with it a need for more production, a need for more innovation and in short, a need for more jobs.
Imagine that you were around when the concept of the personal computer was born and the thoughts that may have crossed your mind as you thought about the impact of this device on jobs. You might think about how adversely it would affect employment, because after all, the computer can do so much with so little effort or labor. Certainly, it would be the cause of major unemployment. What would happen to the masses of workers who take 8 hours in a day to do the same task that it would take a computer to do in 15 mins? Now think about how much we are surrounded by computers in our current world and how ridiculous a thought like that would seem now. The same could be said about other technological advances like the automobile or the steam locomotive. Think about what those inventions did to human productivity and not only how their introduction into existence did not dwindle jobs but in fact they led to the increase of needed jobs to facilitate all of the economic activity created as a result of their existence.
Mr Hazlitt puts it like this: “Each of us is trying to save his own labor, to economize the means required to achieve his ends. Every employer, small as well as large, seeks constantly to gain his results more economically and efficiently— that is, by saving labor. Every intelligent workman tries to cut down the effort necessary to accomplish his assigned job. The most ambitious of us try tirelessly to increase the results we can achieve in a given number of hours. The technophobes, if they were logical and consistent, would have to dismiss all this progress and ingenuity as not only useless but vicious. Why should freight be carried from New York to Chicago by railroads when we could employ enormously more men, for example, to carry it all on their backs?”
Economics if life.
Note: You can get Henry Hazlitt’s book “Economics in One Lesson” at Amazon Books