Or maybe the owner of the company will just buy more automation for the money he saved that will cause further savings?
Maybe. That would then create job for automation creators - and for somebody to mow the lawn of automation creator because he's now too busy to mow it himself, creating the automation. The point is - more productivity creates value, not destroys it. Even though the value created may be allocated differently - so if $100 of value were created, it may end up (grossly simplifying, of course) that somebody would have $150 and somebody -$50. If you think in human terms, getting -$50 sucks, and I can totally understand that and there may be talk how to help that particular unfortunate man to deal with it, of course. But if you switch to economics terms, it's still +$100.
It's the reverse of the famous Broken Window Fallacy. If the world worked like the author of the main post thinks it does, you could create wealth just by breaking and destroying things - which "creates jobs" both for breakers and for somebody who would the restore them. I think it is obvious that no value is created this way.
> That would then create job for automation creators
That would be significant for labor market only if creating next level of automation required more human labor of roughly same skill level than was freed by implementing previous level of automation. Which is possible but unlikely since most automation tools can be used in development of next version of automation. Robots are building robots and new software helps create newer software.
> The point is - more productivity creates value, not destroys it.
I agree. But value is not jobs. We will have more and more wealth altogether but less opportunities to get employed.
Don't get me wrong. I think it's awesome. People work way too much. I'm just saying we'll have to do with abundance of automation in more mature way than we currently do.
Humans will always figure out a way to combine the resources they have to generate additional value. It doesn't matter if these resources are wood, sand, oil, water, steel or software.
In the example given above, the owner of the business buying more automation is actually an explicit example of an enterpreneur REINVESTING. A manual job is being traded by a specialized job. Demand for specialized jobs is being created. I fail to understand where on earth that would be a bad thing.
When resources are reallocated, some people lose their jobs on the way, that's just the way life is. A responsible individual doesn't take a job for granted and saves so that he or she can go through bad times.
By visiting a third world country it is very easy to observe the lack of automation employed by its society. Yet, quality of life is ridiculous. Can you explain why?
1. Automation is lowering amount of available jobs at lower skill levels.
2. New markets created by automation no longer manage to suck lower skilled level workers back in before those markets themselves get automated.
3. Government can't allow for high unemployment as it causes civil unrest due to jobs being most common way people get money to fulfill their basic needs. Government then makes up some jobs and finds pathological ways to provide food and shelter for some people. Lots of new government entities were created or strengthened over recent years. Prison population is as always growing.
My conclusion:
We need to deal better, more honestly with inflow of unemployed that will not subside. 50% (or higher) unemployment is perfectly fine and eventual inevitability. But we shouldn't lock half of these people up and pay some of the rest to guard them and the rest of the rest to do some fake paper-pushing or citizen groping government jobs. I think basic income guarantee is good solution especially implemented together with sponsored, high quality education that can help some unemployed (those who can and are able) to make the jump into future highly skilled workforce that will architect, manufacture and implement further automation.
1. It doesn't really - it changes them. Changing from horsepower to cars eliminated the jobs of people that hauled horse manure - but created myriad of jobs for caring for, fixing, maintaining, selling and otherwise dealing with cars. The mistake here is that people see where jobs disappear, but don't see where they appear since they don't know where exactly to look.
I don't really see how car can be seen as exemplary labor saving invention. Steam engine, electric engine, radio communication, computer, internet sure, but car?
It's just a technology that allows you to build artificial horse that drinks stuff you can mine from underground and shits in the air you breathe instead of on the street you walk on. It surely saves some labor, but it turns so much on its head by increasing mobility and allowing for actions that were previously impossible that this labor saving part is pretty minor and is easily offset by paradigm change that car brought by.
Maybe. That would then create job for automation creators - and for somebody to mow the lawn of automation creator because he's now too busy to mow it himself, creating the automation. The point is - more productivity creates value, not destroys it. Even though the value created may be allocated differently - so if $100 of value were created, it may end up (grossly simplifying, of course) that somebody would have $150 and somebody -$50. If you think in human terms, getting -$50 sucks, and I can totally understand that and there may be talk how to help that particular unfortunate man to deal with it, of course. But if you switch to economics terms, it's still +$100.
It's the reverse of the famous Broken Window Fallacy. If the world worked like the author of the main post thinks it does, you could create wealth just by breaking and destroying things - which "creates jobs" both for breakers and for somebody who would the restore them. I think it is obvious that no value is created this way.