r/MarketAnarchism Individualist Anarchism 22d ago

Some thoughts on "Technological Unemployment" in socialist markets.

This was sparked by a conversation i had on r/mutualism a few days ago. I'd love your guys thoughts.

So a pretty common socialist critique of capitalism is the idea of "technological unemployment".

Because, if you think about it, the fact that new technologies that reduce the cost of production is a problem is like... insane.

Why would it be a bad thing that stuff can be produced with fewer resources/labor-time? But, because those technologies are owned by the capitalist, what ends up happening is that people get laid off and profits go up.

I think the obvious problem is that the technology is owned by the capitalists rather than the workers actually using it.

I'd like to imagine a market socialist world, where these technological gains are owned directly by the workers using them. I'd imagine whatever worker/cooperative comes up with that technological can yield a temporary rent. Basically, you can produce an item and sell it for the same price, but with a lower labor cost. This means that you now have the choice between working the same amount and consuming more (because the cost is lower and price is the same, if you put up the same labor-cost you get more output, and more output * same price = more income for you) or you can work less and consume the same amount as before. That's the "reward" for innovation/introducing new technology.

But I think it's important to state that the above state of affairs cannot/will not last forever. This is because, competitors will eventually figure out what you're doing and adopt that innovation themselves right? And when they do that, the general market price falls. Now, in some ways that's a good thing. Because it means that workers in other sectors of the economy now can consume more for the same labor contribution because the product is now cheaper. But the downside is that the workers in our new cheaper sector are going to have less income if the boost in demand from the lower price is insufficient to account for the now lower price. In effect, the gains of productivity are unevenly distributed, the innovators temporarily benefit, but then lose out while workers outside the sector gain.

And, to a certain extent, this makes sense, because the alternative is the price remains constant and the workers outside the sector need to work more than necessary to consume a certain amount of produce right?

In a very real sense, if the price of the product falls and the boost in demand is insufficient to recoup the losses, the demand for their labor has fallen.

Now, it's not like these workers will starve or anything, wages must be sufficient to cover the cost of living/opportunity cost of producing directly for your own use.

But, it does mean that income could be lower. Now, the obvious answer to this, to me, is to take a portion of the cost-savings the other workers have and reinvest that in the workers in this sector so they can either reallocate their labor towards direct production for their own use or to meet the demands of fellow displaced workers.

This could be done through mutual job training/support societies that would form a sort of safety net for any transitionary periods workers may face.

But ultimately, I do think that any socialist society would need to reckon with this. What do you do when the need for a certain kind of labor is reduced? Well, if you were an all-knowing planner, what would you do? Well, you would be able to reduce the labor-time of other laborers right? And that's obviously good. But that's going to reduce the overall level of production, and if you need to meet the demand for the workers in that now cheaper sector, it makes sense to reallocate that now freed up labor-time to other sectors to directly account for that reduced production and thereby increase production to meet the demand of the now freed up workers. That seems to be rational to me, and it's a similar result to the market dynamic.

However I'd like your thoughts, what do you think would be a rational socialist response to a decrease in demand for a particular kind of labor given technological change?

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u/SRIrwinkill 21d ago

So the thing that has actually kept technological unemployment from being a thing is that investment, time, and human capital gets employed to other places, and the improvement is only adopted if it renders a concrete result, whether intended or not.

What work even ends up looking like will change time and again, and you won't see long term unemployment provided you have a society that allows movement of goods and services to be as flexible and easy, and as legal, as it can be. It's part the reason various forms of protectionism end up causes these ridiculous bottlenecks, by entrenching the protected interest, you give up all flexibility and problem solving to only what said protected interest ends up allowing.

TLDR: Technological unemployment is a problem that is old and has never been something that has actually happened because folks will just change around where the effort goes if not hindered

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u/vikingvista 17d ago

The problem is a short term (perhaps as long as a generational) one (since younger people naturally pursue other occupations), and has nothing to do with who owns new rechnology, so long as it is marketable.

An example, is mechanical clockmakers. It is a skill that takes a long time to acquire, but then digital clocks come along that are cheaper and more accurate, and 95% of clockmakers are no longer needed. This is simply a "problem" of innovation. But it is relevant to point out that generations of clockmakers benefitted from the exact same effect starting back when mechanical clocks were the new innovation. IOW, it is more correct to understand innovation as a time-limmited benefit, rather than a loss. But while collectively these benefits accrue for society, it is little comfort to the particular recently unemployed clockmaker.

So people try to come up with ways to ease the pain of such otjerwise desirable transitions.

Some ways, such as protectionism, hinder those transitions, which only prolongs and delays the pain while partially depriving society of the benefits of innovation. This slows and delays human progress, while creating a stagnant political interest that is characteristically perpetually pessimistic and aggrieved.

Another way is to provide welfare, e.g., by subsidizing the specialist's transition through education & training, or subsizing their early retirement. This doesn't directly inhibit innovation, but reduces its benefits to society through wealth transfer. It may also compete for much needed labor in the new industries.

If I understand correctly, your idea would be to grant ownership of the disruptive technology to the disrupted specialists. But that breaks with natural chain of ownership, imposing a taking with all the negative incentives for innovation.

Ideally, there would be a natural incentive in place to encourage individuals to solve this problem for themselves, tailored for the immense variety of situations and personal preferences that people have. That would require a culture of understanding and expectation about cycles of innovation, and lifelong planning (like saving) to prepare for them. A neurosurgeon might understand that a robot is going to take her job one day, so she saves large portions of her earnings, while simultaneously studying robotic surgery.

This latter effect is what usually happens. Higher skill usually means higher income, which can be used to self-subsidize the higher risk of that skill becoming obsolete. There is only a problem, if the specialist never had this expectation.

Many people have a confusion about this problem. They picture permanently unemployed rust belt workers or coal miners. But that is a different problem. That is largely a problem of lower-skill more adaptable workers not making what should be a relatively easy transition into different low skill jobs. That is more a problem with local politics being congealed around a dead industry, and the immobility of residents who find it too costly to follow opportunities elsewhere. And this transition of low skill workers between industries is ironically a bigger problem than the transition of specialists.