(Feb. 2017) I will never hear the phrase “jobs and the economy” again without thinking of this book. The steady advancement of technology into every aspect of our lives is slowly replacing much of our current labor force. There is no politician, no public policy, no regulatory voodoo or tax magic that is going “bring back jobs.” We need to stop believing that just because someone stands up and speaks those words that somehow they will be true.

Here’s the truth: In a free market economy where technology continues to replace human labor, we cannot add jobs fast enough for the ones being eliminated. We continue to add people to the workforce but the jobs are literally disappearing.

Technology can perform routine tasks faster, more reliably and at less expense than human labor. The recession revealed this painful fact when huge numbers of white collar workers were laid off and never rehired. In the aftermath of the recession, companies have bounced back with greater earnings than before and with a SMALLER WORKFORCE. The job growth in communities across the country has been mostly in low wage service sectors.

Martin Ford puts together the data in a compelling and very readable format.

The bottom line is that, despite all the rhetoric about “job creators,” rational business owners do not want to hire more workers: they hire people only because they have to. The progression toward ever more automation is not an artifact of “design philosophy” or the personal preferences of engineers: it is fundamentally driven by capitalism. The “rise of ‘technology-centered automation'” that Carr worries about took place at least two hundred years ago and the Luddites were unhappy about it. The only difference today is that exponential progress is now pushing us toward the endgame. For any rational business, the adoption of labor-saving technology will almost invariably prove to be irresistible. Changing that would require far more than an appeal to engineers and designers: it would require modifying the basic incentives built into the market economy.

Continuing to replace people with technology produces a whole host of related issues. Goods and services might end up being cheaper to produce, but who will buy them? Creating communities of people barely able to subsist will not feed a huge American economy that depends on consumer spending.

And what about our current system of taxation based on individual income? . . . we ought to transition to a form of taxation that asks more from those businesses that rely heavily on technology and employ relatively few workers. We eventually will have to move away from the idea that workers support retirees and pay for social programs, and instead adopt the premise that our overall economy supports these things. Economic growth, after all, has significantly outpaced the rate at which new jobs have been created and wages have been rising.Read More