Here’s an open letter to a Fox News analyst:
Dr. Keith Ablow
Disturbed by labor-saving techniques such as self-checkout lanes, you wonder why “no one was raising any red flags about the fact that machines had obviously put people out of work” (“Should Trump stop robots from stealing jobs?” Feb. 13). Your fear of mechanization is so intense that you call on the Trump administration to conduct a study to see if, because of mechanization, “rampant unemployment is likely.”
Such a study – one far more reliable than any that can be conducted by government officials – has been ongoing for quite some time. It’s called “history.” Since humans first invented controlled fire and carved arrows, history is a long tale of the invention and use of labor-saving techniques and devices. Domestication of oxen and horses. Pulleys. Levers. Irrigation channels. Metal saws. The printing press. Concrete. The wheel. All save labor, yet none has led to permanent increases in unemployment.
It’s true that the pace of introducing new labor-saving techniques has magnificently quickened in the past two hundred years. This fast pace continues today. Yet still we encounter no evidence that labor-saving techniques permanently increase unemployment.
You’ll reply “This time is different!” Perhaps, but I doubt it. And I’m so confident in my prediction that I’ll put $10,000 of my own my money where my mouth is.
I will bet you $10,000, straight up, that in not one of the next 20 years will the annual U.S. labor-force participation rate, as measured by the U.S. Bureau of Labor Statistics, fall below 58.1 percent – which is the lowest rate on record at the Bureau of Labor Statistics. (The labor-force participation rate hit this post-WWII low in December 1954. And because the unemployment rate does not count unemployed workers who are so discouraged that they’ve stopped looking for jobs, the labor-force participation rate is more likely than is the unemployment rate to capture any long-term job-destroying effects of technology.)
Because you are so worried about labor-saving technology causing secular job loss that you’re willing to empower government to tamp down the rate of innovation, you should not hesitate to accept my bet. If your worries are justified, you’ll not only earn $10,000 but also the right to brag that you correctly predicted a first-time-in-millennia change in the historical relationship between technology and jobs. If instead your worries prove to be unfounded, I’ll not rub it in too hard that you are only the latest in a long, long line of mistaken Luddites.*
Do we have a bet?
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
* Please note that technology can advance so far that the labor-force participation rate falls below 58.1 percent not because technology is impoverishing us but, rather, because it makes so many of us so much richer that lots of us simply choose not to work. If this result occurs, I’ll lose the bet despite the fact that this result will be an especially happy one for humankind. Nevertheless, I remain so confident that, as technology advances, humans will continue discover such a large number of wants and desires to satisfy through economic activities (and that foolish government interference will not stymie these activities) that the annual labor-force participation rate in the U.S. will not fall below 58.1 percent between now and 2037.
(HT Roger Brown for alerting me to Dr. Ablow’s essay.)