User:Three-quarter-ten/Technological unemployment

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The relationship of automation to unemployment is a multivariate one, and people's ideas about its nature in their time, as well as their predictions about the future, have varied widely (and have often been wrong). Nevertheless, humanity continues to try to develop theory that adequately explains the relationship, because it has significant potential to affect economies and modes of life throughout the world.

Mechanization and automation enhance productivity, allowing more products to be made, or other work to be done, faster and with less human effort, and therefore they typically displace workers in some (but not all) areas of employment. The central question has always been whether and where those workers will find new employment. For two centuries, new employment has always been found; during that time, entire new industries and job descriptions have arisen.

The central fear has always been that no new jobs, or not enough new jobs, would arise to fill the void. The earliest versions of this fear predicted that this effect would begin immediately. They turned out to be wrong, and their expected immediate massive unemployment never arose. Later versions of the fear have usually posited that automation would cause unemployment to rise gradually and insidiously. This concept has been discussed by many thinkers, some trained as economists and others not. Variants of this fear persist through the present day, as do refutations of it.

The central hope has always been that, although automation would reduce numbers of jobs, it would not reduce, and would even improve, standard of living, and would provide humanity with unprecedented leisure opportunity and material comfort. This has in fact occurred in many ways. Various mechanisms for how resources would be traded or allocated in such an environment have been posited. The foremost is that new types of jobs would always arise to replace old types lost. This has in fact happened for two centuries.

The fact that for two centuries no permanent, structural unemployment has ever been proven to result from automation has supported an economic concept that automation can never cause it. This view is dominant in economics today, and the idea that automation can cause such unemployment is considered a fallacy in conventional economic theory. However, there are also many people who believe that this theory is incorrect, and that despite the empirical record thus far, the future could be different. These arguments usually make reference to the rapid (and accelerating) pace of advance of information technology, which may produce qualitatively different results than earlier kinds of automation produced, if the advantages of humans over machines keep dwindling.

Multivariate effect

Many people consider it common sense that automation has the potential to foster unemployment, because it obviates human work by transferring tasks to machines. However, the translation of that potential into observed effect has largely not happened in the two centuries during which it has been continually predicted. After many decades of automation development and dissemination, the net macroeconomic effect has been generally positive—automation has been part of a general trend of economic growth worldwide; standards of living have risen in many places; and automation has never yet been shown to have induced any widespread structural unemployment. The main explanation for this is that, so far, job losses in any one particular economic niche have always been more than offset by job gains in other niches. As the lowered unit cost of goods and services (which the automation made possible) gave consumers more purchasing power to devote to other goods and services, new jobs sprang up in the production of those goods and services. Thus each time that automation has freed up human resources, those resources have been redeployed by market forces (although it did not always happen without turbulence in the lives of individual workers).

One of the earliest promises of automation was to allow more free time, without any threat of income reduction. This effect has been seen in many individual facets of life (for example, the automatic washing machine has made laundry less time-consuming; engine control units have reduced the amount of automotive downtime; the automatic dishwasher has made dishwashing less time-consuming), but the net outcome of modern life in developed economies remains a state of hurry and busyness, mostly because rising living standards have brought rising expectations in direct relation. (Each time-saving improvement has made room for a new aspiration to take its place.)

Automation also does not imply unemployment when it makes possible tasks that were unimaginable without it (such as exploring Mars with the Sojourner rover). Likewise with fields where the economy is already fully adapted to an automated technology, and the jobs were lost long enough ago that the displacement was long since absorbed by the workforce (as with the continually advancing automation of the telephone switchboard, which eliminated most telephone operator jobs and kept many more from ever existing in the first place).

Today automation is quite advanced (relative to just a few lifetimes ago), and it continues to advance with an accelerating pace throughout the world. Although it has been encroaching on ever more skilled jobs, the general well-being and quality of life of most people in the world (where political factors have not muddied the picture) have improved. Clearly a multivariate effect has been at work (something much more than just the obvious idea that automation has the potential to cause unemployment). In fact, the idea that automation posed an imminent threat to employment, first articulated in 1811 by a group of textile workers known as Luddites, has proven to be so fallacious over the ensuing two centuries that economists call the imminent-threat idea the Luddite fallacy.

There is some concern today that the economy's ability to continue absorbing ever-increasing automation without experiencing significant structural unemployment may be heading toward an upper limit—that is, that we are approaching a point where the Luddite premise will no longer be entirely fallacious, because the relationship of humans to machines that made it fallacious is changing. In this view, the empirical strength of the eternal-fallaciousness idea is only a reflection of the parameter values of the environment thus far. In other words, the idea is undoubtedly an excellent explanation of the past, but whether it can accurately predict the future is an independent problem. Like an investment prospectus, proponents of this view caution that "past performance is no guarantee of future results."

Timeline of concerns about automation's relationship to unemployment

Early in the Industrial Revolution

See also: Industrial society and Industrial revolution

Historical concerns about the effects of automation date back to the very beginning of the Industrial Revolution, when a social movement of English textile machine operators in the early 19th century known as the Luddites protested against Jacquard's automated weaving looms. The Luddites destroyed a number of these machines, which they felt threatened their jobs.

Later in the Industrial Revolution

The development of the American system of manufacturing disgusted many skilled machinists at a time when the very definition of being a machinist included a core element of skilled toolmaking and fitting on a craft basis. Innovations of this system included increasing reliance on jigs and gauges and on machine tools that built more of a process into the tool's movements (such as turret lathes and screw machines). These innovations continually turned skilled work into semi-skilled or unskilled, contributing to vast migrations of laborers across borders and oceans. However, despite this transformation, there were always other economic niches for skilled workers to go to, given enough searching. Recessions interfered with employment, but no foundational aspects of structural unemployment were caused by automation itself.

During the Machine Age

As in the preceding century, the period of 1880 to 1940 saw no underlying automation-induced structural lack of new economic opportunities for skilled workers to go to, given enough searching, although the Great Depression caused a tremendous disruption to employment. The foundational potential for full employment had not been lost, as would later be shown by the post–World War II economic expansion and other economic miracles.

In the 1930s, John Maynard Keynes predicted that in a century there would be a 15-hour work week as the "economic problem" would be replaced by the problem of leisure. This work was an early exploration of the comparing and contrasting of an economy of scarcity (the only kind of economy humanity had ever known) with an economy of abundance, that is, a post-scarcity economy. This theme would be reprised in future decades.

During the 1950s through 1990s

See also: information society, information revolution, and post-industrial society

The postwar development of new automation technologies using electronics, servomechanisms, and digital computers stoked a new wave of fears similar to the old Luddite ones. Among the working class and labor unions, there was stiff resistance to loss of employment through automation, including contract clauses won in hard-fought contract negotiations that mandated alternate employment for any workers whose positions were eliminated by automation. These clauses seemed a great victory for union workers at large corporations in developed nations, but because they had no effect at smaller, nonunionized companies or in developing nations, those corporations faced withering competition that shrank their market shares until their workers' gains eventually undermined their own success.

However, the 1950s and 1960s were optimistic times in many respects, and during this era many optimists made forecasts similar to Keynes's 1930s discussion of pending abundant leisure. Meanwhile, pessimists questioned the role of labor in such a world and questioned how people would earn a living or occupy their time. While economic growth increased per capita income in the 1960s, and the average number of hours per work week declined, they have remained relatively constant in the United States since then.

Despite the depopulation of manual labour and assembly line jobs after World War II via advancing mechanization and automation, the salvation for employment rates damaged in the industrial sector (secondary sector of the economy) came from the service sector (tertiary sector), which absorbed all of the workers that automation displaced elsewhere. For example, many manufacturing jobs left the United States during the 1990s but were offset by a one-time massive increase in IT jobs at the same time. And in some cases the freeing up of the labor force allowed more people to enter higher skilled managerial jobs and technically specialized jobs, which are typically higher paying. Therefore, fears of unemployment due to automation were generally dismissed as just another instance of the Luddite premise, which had proven fallacious time and again over many decades. Given this obvious empirical contradiction of the premise, people who nevertheless returned to it were usually viewed by the mainstream as cranks misled by quixotic leftist political bias. For example, works by scholars including David F. Noble and Jeremy Rifkin were often respected but discounted. At worst, they were mocked with the disparaging label "neo-Luddite". Noble even wrote a later book titled Progress Without People: In Defence of Luddism to try to further explain why the Luddite premise should not be laughed out of academia.

Post-market musings

Rifkin's End of Work, published in 1995, predicted that automation-induced unemployment would begin to be widespread within the next decade. However, the book's concept of how IT would evolve over the next decade was incomplete (the book mentioned the Internet once in passing and the World Wide Web not at all; its IT focus was mostly on robotics); and its timeline prediction turned out to be wrong. It also did not provide much detailed explanation of any solution to the problem. The book's subtitle called the solution a "post-market economy", but its concluding chapters did not clearly lay out how such an economy could be engineered, leaving readers to conclude that a non-market solution involving a planned economy was implied between the lines.

In terms of political economy implications, there was no clear differentiation at the time between the ideas of authors like Noble or Rifkin (on the one hand) and traditional leftist agitation (on the other hand). To the extent that readers could ask "What point is this person getting to?" and answer the question with "socialism" or "a welfare state", they dismissed these authors.

During the 2000s and 2010s

Since the 1990s, the possibility has been raised again in even an apolitical, technocratic way that the Luddite premise (that automation creates unemployment) was only fallacious in the absence of highly advanced and ubiquitous automation, which until recently was mostly out of reach technologically. This would explain why it has always been fallacious until now, but also why it might not always remain so. For example, Marshall Brain, Martin Ford, and others have suggested that exponentially accelerating information technology (IT) may ultimately result in widespread structural unemployment, because an implicit assumption underlying the "eternally fallacious" idea (that lots of regular humans will always find ways to do service work that machines can't do) will itself be fallacious as IT advances. They suggest that, unlike in the 20th century, when the tertiary sector absorbed all of the workers that the automation of the secondary sector expelled, the tertiary sector now also faces depopulation via automation; its employment will shrink, not grow, and this time there is no other sector to backstop the process by absorbing the displaced workers. The high unemployment rates of the late-2000s recession have brought the idea of structural unemployment back into mainstream attention, as observations are made about positions that require extensive specialized skill and experience standing long vacant even while general unemployment rates above 9% (and horror stories of fruitless job searches) would seem to suggest that such vacancies ought to be scarcer. The idea that automation has finally advanced to the point that the Luddite premise is no longer entirely fallacious is one of the components of some theoretical explanations for the string of jobless recoveries in developed economies in recent decades. Expectations that the (already eroding) fallaciousness will fall off sharply in coming decades underlie the fear of structural shift.

Although automatons that mimic humans so precisely as to be difficult to distinguish from them are probably a long way from being technologically feasible, they provide a thought experiment regarding the assertion that humans will always find new types of jobs to do that machines can't do. If one imagines an excellent robotic clone of oneself, which only required one year's worth of one's salary to buy or build but could last 10 years with minimal maintenance, that robot could be hired for any job that oneself could be hired for, but at much less pay. The idea that there would be any new type of job for the human to fall back to seems defeated. Of course, there are objections to this thought experiment. One is that it is irrelevant because its stated conditions are too far in the future to be worth speculating upon. Another is that the lack-of-new-jobs idea, even if true, could be moot, because post-scarcity economics could be in play, and jobs would be unnecessary for income anyway. However, it is interesting to ask oneself what intermediate states human socioeconomics might have to pass through to get from today's economy (scarcity-based trade, mediocre technology) to that distant future (post-scarcity abundance, very high technology). What would happen during an intermediate era when robots and other AI were mediocre but still fairly useful, and income still depended on having a job—that is, selling one's labor? Would the market value of that labor be depressed? Clearly total production (gross domestic product) could grow ever higher in this world; but how would money circulate? Would a large underclass of humans have no way to partake of the output, having no employment? Or would something happen (perhaps something we cannot foresee) that would cause a different scenario? Attempts to answer these questions have been made, as outlined below.

Writers such as Rifkin, Brain, and Ford often suggest that the structure of the economy will have to shift to a basic income because its present structural foundation (trading labor for income) will no longer be an available option on a full employment basis. It would perhaps be available to only 90% of workers in the next decade, perhaps 75% of workers a decade after that, and so on. Often included in the basic income idea is an element of civic obligation, such that able people must somehow contribute civically in order to receive the basic income (sometimes differentiated as guaranteed minimum income). The labor-market economy (trading labor for income) already achieves that outcome today (because working for income generally produces civic value in various ways, directly and indirectly), but the argument is that advanced automation will decouple the linkage that makes that possible. Thus the same result (trading civic value for income) would have to be driven by different forces—either non-market ones, or via a new kind of market. The non-market idea seems infeasible given the generally abysmal performance record of planned economies. But the idea of engineered new markets leaves room for the disciplining and motivating powers that make capitalist markets capable of positively shaping human behavior where government alone is usually unable.

New-market engineering

Brain and Ford's books, in stark contrast to Rifkin's, came later and were written by engineers with extensive under-the-hood knowledge of modern production methods, computer hardware and software, and the Internet. They explicitly reject non-market solutions as unworkable and instead suggest new kinds of markets. Rather than being "post-market" proponents, such authors could be called "new-market" proponents. They vigorously distance themselves from socialism or welfare states—generally seeking to keep a market economy with private enterprise, which they believe cannot be preserved unless its foundation is modified from its current structure. Thus, quite contrary to being anti-market agents (as critics might suppose them to be), they believe themselves to be salvaging markets from destruction. They envision creating consumer purchasing power by some other mechanism than the traditional labor market as we have known it so far, in order that free markets may continue to provide the invisible hand component of production-possibilities decisions. In other words, they believe that market forces are necessary to generate allocative efficiency, and they believe that without a structural modification that (at least partially) decouples purchasing power (and consumer confidence) from employment determined by the traditional labor market, there will be a systemic market failure, which they seek to avoid.

Just as new-market advocates are pro-market and pro-private-property, they are also very much non-Luddite (in fact, exactly opposite of Luddite) in the respect that they like technology—they don't hate it. They want it to continue advancing as robustly as ever. They simply feel that income and purchasing power must be decoupled from human participation in production. (The decoupling does not have to happen all at once; it could start small and gradually increase.) If that happens, then they essentially do not have any problem with technology or automation, per se. In contrast to old-style welfare, they do not feel that income should be unconditional, or equal, or "free" (given out "for nothing"). They believe that people should have to work for it (in a new sense of the word "work"), in the respect that they are given incentives to do positive things, like take classes, read books, conserve (or remediate) environmental resources, and so on. People would be paid to do civically valuable things, and if they chose not to do those things, they would not be paid. In this way, new-market advocates align themselves with human nature, which generally requires selfish motivations and incentives to shape behavior, and with the market's invisible hand, which is needed to make the right production-possibilities decisions (because the idea that individual human managers, or groups of them, are capable of making those decisions correctly with zero invisible-hand assistance has been empirically discredited).

Discussions of new-market ideas usually lead to the topic of post-scarcity economic paradigms. But new-market engineers argue that without clear-eyed, realist engineering of the intermediate steps, there is an abyss of dysfunction and hardship between today's economy of scarcity and the starry-eyed goal of any fully developed economy of abundance.

Wage-recapture market variant

Ford's main new-market mechanism would be to create a tax that recaptures most (not all) of the value that firms and their customers gain from eliminating wages, then use the tax revenue to pay people for doing civically valuable actions—that is, pursuing activities, such as higher education or environmental preservation, that have positive externalities. The main reason for paying these "wages" need not be their altruistic or environmentalist components; the main reason is simply to prevent the market economy from collapsing due to noncirculation of value (that is, the lack of adequate trade which would occur if lack of consumer purchasing power and confidence left no way for an adequate mass market to exist). Ford points out that the tax could not take all of the gains away from the corporations and their customers, because this would destroy the natural incentive to innovate that a market economy needs to be sustainable. The value would be split between the innovators, their customers, and the rest of the population, because leaving out any of that trio would wreck the sustainability of the model. (The leaving out of the third leg is what is causing today's economic pathologies and promising tomorrow's, in the view of new-market engineers.) Ford's idea is an earnest market effort because it preserves the invisible hand as the maker of production-possibilities decisions for goods and services. However, it does rely on human planning (via a technocratic government agency in each country) to make the production-possibilities decisions for civic actions. The latter is viewed as unfortunate but necessary due to the lack of an alternative.

Mirror-image market variant

Another idea for a new-market mainspring which solves the aforementioned "lack of an alternative" problem is a "mirror image" idea, which has an even more private-sector approach in which the invisible hand helps make even the civic-actions production-possibilities decisions. In this model, the government does not collect a wage-recapture tax at all. Instead of enforcing tax payment, it only enforces payment of a new-style "wage" directly from corporations to consumers that looks to us today like something we might label "mandatory philanthropy", but which would actually be a true market wage of a new type.

Compared with the earliest variants of these ideas that involve direct support from the government, which could tax highly automated companies and use the revenue for both basic income and select reemployment, they have also evolved to include market-based mechanisms, comparable to minimum wage laws, requiring the private sector to employ humans but leaving the job descriptions to private innovation. In these lines of thinking, it is recognized that automation can continue to yield ever higher per capita standards of living (in contrast to classical Luddism), but the basic income or new markets decouple consumer purchasing power and confidence from the traditional labor market, which can suffer from fluctuations in the business cycle or (as Ford argues) even potential market failure. In its place would grow a new labor market insulated from these concerns. Such ideas recognize that there can never be a lump of labor, but also that a point will be reached when most humans aren't qualified or able to do most of the kinds of labor that remain after the automatable types are subtracted.

In today's old market, money flows from consumers, through (partially automated) companies, past the eyes of the government enforcement sentry (but not through its hands) as wages, into the hands of workers (who are also the consumers, thus completing the cycle of value recirculation). In the new market (mirror-image variant), money would flow from consumers, through (highly automated) companies, past the eyes of the government enforcement sentry (but not through its hands) as [new-style] "wages", and into the hands of [new-style] "wage" earners, who are paid the "wage" for civically valuable actions. (They are also the consumers, thus completing the cycle of value recirculation).

In this model, the decisions about what the civic actions are can be made by the invisible hand, because each "mandated philanthropist" gets a large degree of authority in what actions their "philanthropy" (which is actually [functionally] a new-style "payroll") will or won't pay for. Many such paymasters functioning simultaneously could constitute the "buyers" in a market for civically valuable actions (with mass-market "workers" as the "sellers"). There would still be some regulation involved, because, for example, it would be illegal to base the "payroll" decisions on race, color, religion, creed, gender, sexual orientation, ethnicity, disability, marital or veteran status, and so forth. To decide which "workers" were on a given "payroll", there might be a clearinghouse to randomly match the two, rotating assignments every several years. Or perhaps the businesses that run the "payroll" could even "hire" the "workers" themselves, in which case workers would compete for "jobs" by showing off how "productive" they could be in doing the civic actions (another level of invisible hand yet again). The "mirror image" name comes from the idea that this variant of new market is a very free market where the invisible hand remains just as powerful as it was in the 1945–2008 economy, but with many mirror-image aspects (which are visualized above by the amount of quotation marks that are necessary to signify mirror-image senses for words that were always [up till now] widely known only in their non-mirror-image senses).

The axis of reflection in the mirroring seems to be, at root, a "polarity shift" from where human individuals can add value only by doing production (from within production systems) to where they can also add value by avoiding hurting production systems (from outside). The hurt-avoidance comes from such civic actions as providing goods-and-services demand via consumption (which the system requires in order to stay running) instead of failing to consume (because of lack of income); ensuring the sustainable supply of energy and environmental resources to the production systems (by avoiding overconsuming those); and ensuring the supply of people educated enough to provide the few humans that the production systems will need in the future, by pursuing education and cognitively enriching pastimes. The humans that the systems need will be few, but those few will need to be highly intelligent, talented, and educated, constituting a human resource that might be endangered if the general population does not act as a "farm team system" for it by valuing education and self-education as a civic action. An analogy is provided by sports' relationship to general life. Few humans are talented and practiced enough to play professional sports, but the professional teams rely on a system that filters such scarce people out of the general population via little league/pee wee programs, high school play, college play, farm-team play, etc. People in the general population are not considered inferior human beings (versus the pro players) because of their lack of pro talent. They are valued as the fans and ticket-buyers that make the pro system economically viable. And a small fraction of them grow up to become pros themselves.

In today's old market, governments enforce the payment of wages by having outlawed their nonpayment (i.e., slavery); by levying tariffs on cheap competition from countries that kept their nonpayment (slavery) (that outlawing has now been global for many decades); and by attempting to minimize their underpayment (i.e., wage slavery, a sharply cheapened value of work [with elites and their customers keeping the money]). In the new market (mirror-image variant), governments enforce the payment of "wages" by outlawing their nonpayment (i.e., evading the "payroll"); by levying tariffs on cheap competition from countries that kept their nonpayment (non-participating countries); and by attempting to minimize their underpayment (i.e., "wage" slavery, a sharply cheapened value of civic actions [with elites and their customers keeping the money]).

One of the inherent challenges of the mirror-image variant is that various forms of dressing up corporations' financial self-interest in a specious cloak of civic virtue would inevitably arise. This would be a "washing" form of marketing and operations that included greenwashing and analogous washing in other domains of life (e.g., education, infrastructure). It seems unlikely that this can be entirely negated; instead, it would have to be perennially pruned by social censure and regulatory oversight. However, no other system is without its chronic weaknesses, either. For example, the classical variants of capitalism (implemented thus far) have scored poorly on various tests, such as environmental sustainability and (potentially) the employability of the average human (as that was traditionally defined) as automation grows pervasive. Twentieth-century variants of communism fared even worse in environmental sustainability, and also failed economically in average standard of living and politically in individual freedom. The wage-recapture new-market variant, with its technocratic decisions on how to spend the revenue, holds promise to minimize the corporate "washing" problem, yet it also holds risks of failing on allocative efficiency and market-driven innovation, which the mirror-image variant mitigates. As elsewhere in reality, each choice has pros and cons, rather than any choice being perfect. The "washing" problem may be the mirror-image analog of classical capitalism's tendency to exaggerate needs (for example, a maker of antibacterial soaps encouraging the populace to fear microbes to an irrational degree). Both are forms of conflict of interest that cause "chronic irritation" to a socioeconomic system but need not be "fatal" to it if given adequate "medical management". The washing problem may be less systemically injurious than the allocative inefficiency problem, just as the "exaggerated needs" problem of classical capitalism was less systemically injurious than the allocative inefficiency problem of central economic planning.

In choosing the decider of production-possibilities decisions (whether of goods, services, or civic actions), the invisible hand is generally preferred to committees of humans because it has proven to be superior at the decision making (except for regulatory issues such as race-color-religion-etc. and the "washing" discussed above). In the future it will also be necessary to ask what role artificial intelligence might possibly have in making those decisions, and whether humans would allow it. Perhaps artificial intelligence, like human intelligence, will share the role with the invisible hand but be barred from usurping the entirety of it.

Implementations

Regarding the chances of any new-market ideas being implemented, there are both significant barriers and significant drivers, with a net potential of perhaps "even chances". Ford discusses many of these barriers and drivers. The barrier side includes (a) natural cultural conservatism that powerfully resists systemic changes; (b) the powerful influence of laissez-faire ideals, which would resist any engineered systemic change to markets (especially anything involving a tax); (c) the fact that early implementation by individual countries faces an immediate threat from the export and offshoring competition of countries that haven't yet implemented; and (relatedly) (d) the all-or-nothing problem, which may occur if a new system would work well but only if the switch from old to new was an off-on switching rather than a gradual evolution. However, on the driver side there are powerful forces that may answer all of the barriers. Foremost would be a dawning realization by economic elites that they have a choice between a new market with prosperity, or the old market spiraling into near-total failure. Globalization so far has not threatened the wallets of economic elites (only those of average workers), and has in fact enriched the elites thus far; but the changing parameter values of the economic system as automation advances would alter that runtime environment and transform it into a new one, where even the elites' wealth would be threatened by a market failure that killed their businesses and reduced asset values throughout the economy. Realizing these options, elites might actually switch from opposing new markets to actively supporting their implementation (including addressing the competition between countries whose policies differed). The all-or-nothing problem does not have to occur if an implementation is engineered such that extremely profitable, extremely automated industries began piloting new markets while other industries continued with an old-market status quo for quite some time. In this model, the early adopters voluntarily become leaders, and the pilot projects would act simply as economic stimulus on the broader economy (although a type of stimulus much more effective than old-style stimulus, whose efficacy seems to be eroding because it relies on the Luddite premise being a total fallacy as opposed to shifting by degrees out of total fallaciousness). The overall transition in this model could actually be quite painless, as a generally prosperous economy changed gradually over decades from mostly-old-with-some-new to mostly-new-with-some-old. The selfish motivation of the early-adopter leaders would be the aforementioned choice faced by economic elites. They would choose to stimulate the broader economy because that result would ensure their own continuing strong sales and growth by preserving a runtime environment of general prosperity for them to operate within, without which depression or malaise would occur.

Given the aforementioned choice faced by economic elites, those in the private sector might even choose to pursue the new market without government involvement. But the private sector faces two hurdles that would make it difficult: the natural competition between firms (which is necessary and thus must be protected by competition law), and legal obligation to maximize shareholder value. The traditional definitions of shareholder value evolved in an earlier era whose commercial environment had different parameter values due to lack of advanced automation. Those traditional definitions would bar new-style payrolls. But in the face of market failure without them, perhaps a case would emerge for an updated definition. Competition is the other hurdle. Companies are barred by competition law from agreeing to limit competition, and even if they weren't, individual companies generally cannot make the first move of increasing expense without being killed by competition from rivals who don't. This is why "a level playing field" would have to be created by policy, or to use a different analogy, "a high tide that lifted all boats equally". This is directly analogous to existing minimum wage laws. Individual companies generally could not survive in the market if they volunteered to self-enforce minimum limits on wages (in the absence of any laws requiring them). There is breathing room for above-market wages (e.g., to attract superior talent) at some companies in some industries who enjoy a relatively high level of imperfect competition; but most companies in most industries face competition too close to pure to survive the attempt. In this sense, the mandated value recirculation (whatever anyone calls it, from "wage recapture" to "new-style wages") is as unremarkable and non-novel an idea as any legislative or regulatory mechanism in commerce. For goals that make long-term systemic balance possible but cannot be pursued by the self-interest of individual market players, these mechanisms provide a path by forcing all competitors to play the game by the same rules. Existing examples include employment standards (e.g., child labor laws, minimum wage laws), environmental protection, and financial regulation (to prevent bubbles and thus crashes). These exist in perennial tension with the forces of pure capitalism; thus the extremes perform checks and balances on each other. Businesses usually fight for inadequate regulation; government usually fights for excessive regulation; and a sustainable balance results. Over decades, systemic pathologies gradually push the balance point out of the sustainable range; periodic breakdowns then yield correction by counteractive forces (e.g., trust-busting [leftward correction], the Reagan revolution [rightward correction]).

Laissez-faire ideals reigned supreme worldwide for about three decades (roughly centered on the fall of the Soviet Bloc, which vindicated capitalism over central planning in many ways). In this environment, where the lesson commonly extrapolated was that pure capitalism will always be better than any mixed-economy alternatives, the prevailing theory has been that higher corporate taxes can only harm economic prosperity. The reasoning is partly that countries can simply compete to undercut each other's corporate tax rates (which is true), but also, more importantly, that only the invisible hand is capable of recirculating capital back toward the base of the economy in a successful manner (which is not to be dismissed lightly, and may in fact be true). The disparaging label for such ideas is "trickle-down economics", but many intelligent people have earnestly believed in these ideals; and the fact that their discounting has often been facile and done by imperfect opponents has only encouraged believers to stay faithful. Widespread fervor for trickle-down beliefs (in both the public and private sectors) poses a formidable barrier to the wage-recapture-tax new-market variant. But these conventional beliefs rely on the assumption that the Luddite premise is entirely and eternally fallacious. Unfortunately, there has already been a decade of empirical evidence that low taxes, new business investment, and economic growth no longer have a sure-fire correlation to strong, "good-jobs" employment in developed economies, and that alarming instances of structural unemployment resulting from software-driven automation are arising, with little to no "silver lining" or mitigating factors being discernible so far. If the Luddite premise has been starting to shift into partial accuracy, then no amount of continued low taxes and deregulation will ever be able to produce enough trickling down to create broad-based prosperity. In that case, mandating the payment of new-style wages could recirculate value back to the base of the mass market. The promise of the mirror-image variant would be that humans need not turn to taxes for the value recovery (at the top) nor to central planning for the distribution details (at the bottom). As long as the "minimum wage" (referring to the new-style wages) and other employment standards are being enforced, then government's role ends there.

Other conceptual implications

Regarding the premise that technological unemployment can produce structural unemployment even despite the fact that the lump of labor notion is eternally false: the premise conceivably could change states in continuous-graph fashion, from completely false to partially true, depending on parameter values in the commercial environment, most specifically, the available modes of value recirculation. In this view, for two centuries the premise was completely false or very nearly so, because the traditional labor market provided sufficient means of value recirculation. As that fails because of advanced automation, it could enter partial influence. But if new forms of broad-based personal income came into being (for example, basic income, guaranteed minimum income, or new-style wages), the premise could revert back to a state of complete or near-complete falsehood again. The difference would be that enough value was circulating broadly enough through a mass market of consumers and corporations that services which today could not possibly garner middle-class wages and benefits (for example, full-time jobs reading stories to hospitalized children, providing free nursing care to low-income elderly, or attending university) would become viable at that wage level.

It is also possible that new-market engineering does not actually stand in contradistinction to the mainstream economic view that new types of jobs will always arise (which is how it seems to appear today). Instead, it may conceivably be the new category, whose exact nature the conventional theory did not foresee but whose inevitable arising the theory was confident of. For the end result in either case (conventional view or new-market view) is that humans could get jobs as, for example, long-term care nurses to poor people who under older economic paradigms could not afford to pay for such nursing. In both cases, the productivity created by automation shifts human workers further into the service sector than they've ever yet been (that is, into a brand new territory of that sector). The only twist, in this view, is that it took a new kind of minimum wage law to jump-start the newly arising job types into commercial viability.

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Further reading

• Ramtin, Ramin (1991), Capitalism and Automation: Revolution in Technology and Capitalist Breakdown, London, UK and Concord, Massachusetts, US: Pluto Press, ISBN 978-0745303703.
• Scott, Ellis L.; Bolz, Roger W.; University of Georgia; Reliance Electric Company (1969), Automation and Society, Athens, Georgia, US: Center for the Study of Automation and Society.