Class Warfare Blog

June 26, 2013

Technology and Unemployment

I have been watching a video biography of Henry Ford and I was struck by the impact of the technological advances of the early 1900’s. There was overwhelming growth in employment because of technology. Not as many people were needed to work on farms as tractors and mechanical combines and other such machines were invented. Today the percentage of people working on farms is at an all-time low.

Economists would use this as an example of how technology can displace jobs. That example in isolation seems potent, but one must take a step back to see what is really happening. As the decline in farm labor took place beginning in the late 1800’s, what else was happening? Well, a great many jobs were created making those machines, servicing those machines, and selling those machines, that previously did not exist.

“Economists say that much of our current job losses
are due to technology. They are full of shit.”

Henry Ford opened the first automobile company in Detroit just five months before the turn of the twentieth century and within just a couple of years there was over 100 such companies making automobiles. Most of them failed but while they were failing workers worked and got paid. Ford’s company failed, then he created the Ford Motor Company. The astounding success of Ford’s Model T made him rich and provided jobs for hundreds of thousands of people. And there were also jobs created selling those cars, servicing those cars, selling gasoline, making gasoline, distributing gasoline, making replacement tires, making many hundreds of miles of improved roads and, of course, more cafes were needed as people traveled more, motels were invented, etc. etc. Automobile insurance was created … need I go on?

Economists say that much of our current job losses are due to technology. They are full of shit.

There has been no greater technological turnover currently than in China. Are they experiencing high unemployment? No.

Economists who say such stupid things are shills for corporate interests trading their reputations for some meager financial support. Here’s what is really happening: American corporations are exporting jobs from the U.S. to lower wage countries. This increases their profits and decreases the wages of the workers left behind as the competition for the remaining jobs increases. Worker insecurity reduces demand on wages. (Alan Greenspan, former Chairman of the federal reserve System proudly testified before Congress that the basis for the U.S. economy was “growing worker insecurity.” If workers are more insecure, they won’t do things, like asking for better wages and better benefits.)

That’s it. No technology bullshit. Pure greed. Money transferred out of your pocket and into the pocket of a corporation that is already effectively bloody rich. Of course, as you earn less money, you pay less in taxes so the government is starved and the social safety net is weakened.

Now, which political party advocates all of this is good? Hmmm?

Civilized countries prevent such abominations.


  1. Reducing people to appendages of machines, obsoleting humans, destroying skilled labor… what’s new? If you are looking at the history of industrial capitalism, nothing, it’s just the same old shit.


    Comment by History of Capitalism — June 26, 2013 @ 11:57 am | Reply

  2. The unemployed can’t of course contribute to the economy but employed people are also finding it hard to spend unless of course you’re a high income earner. Too many jobs are coming out of the service sector that barely pay over a minimum wage and many jobs are part-time, reducing one’s ability to spend without making it look like scarce jobs are the reason. It’s the lack of a livable wage along with training the unemployed to develop new skills that contributes to a poor economy.


    Comment by lbwoodgate — June 26, 2013 @ 12:01 pm | Reply

    • And the strategy is to keep unemployment high so that if you won’t do a job for a particular wage, someone will.

      As I have said before, the number 2 country in the world for manufacturing exports is Germany, which has higher labor costs and lower productivity than we do. It is not a matter of common sense, it is a matter of greed.

      And thanks for your posts. As a retired teacher I had fallen into a kind of “who cares” malaise and I find that when I read your posts I find I do care.

      It is also interesting to note that countries all over the world have lower costs for higher ed that we do and for reasons that involve conservative politics. I am working on a post on that now.


      Comment by stephenpruis — June 26, 2013 @ 1:59 pm | Reply

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