Walker’s “Dying Economy” Resurrects Dead Argument

(Or: “Steve Jobs Putting the Squeeze on jobs?”, if you prefer)

By Aaron Krowne

In a recent article, UPI’s Martin Walker analyzes the economic funk the Western countries find themselves in, and ponders their future.  While he starts out promisingly, criticizing the failed consensus “bailout” methods since 2008, he shifts gears mid-way through the article to a non sequitur: blaming computers for what is sure to be a permanent malaise of unemployment.

I agree that with current monetary and economic policies we are faced with malaise as far as the eye can see, but not for such a silly reason.  Walker’s is essentially a luddite argument: that our economy simply cannot create jobs because computerization is eliminating the need for workers.

That’s poppycock.  In no previous era did technology REDUCE the demand for jobs — at best technological advancement is a proximate cause of temporary dislocation.  But a healthy economy can always absorb the majority of the unemployed into new jobs; often jobs that could not even be imagined a short while before.

So, is computer/software advancement somehow special?  I don’t think so.   As a degree-holding “computer guy” and someone who runs a totally online business, I can confirm that if revenues were better, I could hire many people to do tasks useful to me and my sites which I cannot automate.  These would be high-level editorial tasks, which, as the years go by, computers and software may make easier, but certainly not eliminate them (indeed, I would be more likely to engage the same employees in doing new tasks to increase revenue, once freed up from more rote tasks).

I can actually prove this is the case, because a short while ago I had such helpers.  But in dealing with the economy’s reduction in ad  revenue and frivolous lawsuit expenses (thanks to our predatory legal system, another significant economic hazard) I have actually had to let people go and destroy four or five full time jobs.

What I’m getting around to is this: the problem with the economy is monetary (and secondarily, because of dysfunctional general economic policy — such as over-regulation in ways that burden small businesses while failing to properly regulate major problem areas like banking).   Examples abound throughout history and around the world that where money is sound and major economic dysfunction absent (like famines, nearly always a consequence of state design), economies will readily create jobs through all manner of technological and business change.

Indeed, one could argue at length that technological advance HELPS create jobs (even if people might eliminate jobs up-front), because it makes every unit of currency proportionally more valuable through greater buying power, which effectively increases the amount of capital everyone has.  This new capital can, of course, be used for hiring and new business formation, which is exactly what will happen if the authorities haven’t screwed up the system so badly that no one can think of doing anything with this new capital other than hoarding it.

That’s where we are today.   To the extent corporations free up capital by computerizing jobs, they certainly aren’t rushing to re-deploy it ways that create new jobs, because, first and foremost, we are in the midst of a “permanent financial panic” created by government policies (if you want to see a stark illustration of the jobs vs. “zombie” capital principle, look at Bank Of America’s situation).   Now that part, Walker had right — if only he had continued addressing the cause, rather than shifting the blame to a superficial consequence (another example would be increased immigration — another “ill” correlated with increased joblessness; yet something no one cared about until the current financial crisis because clearly it wasn’t any sort of direct factor reducing jobs).

Sadly, I’m sure our economic overlords will be happy to seize upon Walker’s technological-luddite apologetics, as they help distract from the underlying monetary and economic dysfunction they themselves perpetuate.