Skill-biased technical change

[phk]

If a new scientific or technological advance reduced the need for lower-skilled labor, it should still be implemented, and new science/technology shouldn't be restricted for this purpose.

[○∙◄☻¥tπ[╪AV┼cVê└]

If a very few automatically amass enormous profits while vast numbers are unemployed, a massive increase in socialism is the only solution. In the past, the economy found new jobs for those laid off, but that isn't happening any more.

[realisticidealist]

Definitely agree, though it would probably be best if the government implemented some program (or a large-scale private endeavor, but the former is more likely) to transition the displaced workers to new positions to avoid dragging down the economy in the medium-run for a large innovation. For smaller innovations, this probably isn't necessary.

[shua]

I shouldn't be restricted, but whether or not it should be implemented depends on the circumstance.  In some cases it is good for companies to value things other than efficiency.

[So rightwing that I broke the Political Compass!]

I'm in favour. I do find it amusing though the double standard with regards to outsourcing... people don't object that jobs are lost to machines, but they do object when they're lost to humans from another country? LOL.

[So rightwing that I broke the Political Compass!]

I also advocate that we respond to this economic trend with a radical rethink of our tax system. The present core of our("our" being all developed countries and most developing ones) tax system is income and payroll taxes. These:

a)Distort the decision-making with regards to adopting new technologies, by making human labour more expensive then the mechanical alternative in cases where it otherwise would have been more efficient.

b)Destroy their own revenue stream in the process, since the machines don't pay taxes.


Their are, to my mind, 4 possible tax systems that could be adopted to replace this dysfunctional one:

1)"Labour tax system" which would try to measure the value of both human and machine labour in an equal fashion and tax them accordingly. A horrible idea IMO because it would be horribly bureaucratic and arbitrary, but the sort of thing that would come naturally to politicians as a way of papering over the problem. I rank it joint-first in terms of likelihood of being implemented, last in terms of desirability.

2)Consumption taxes. Be they general like VAT, or specific like carbon/sin taxes. I rank them joint-first in probability of politicians falling on them, and second in terms of desirability.

3)Corporate taxes. In so far as the income tax is effectively a tax on corporate hiring of labour, it seems natural that the system most in line with the status quo while dealing with the problem would be to tax corporate profits more generally(and so indirectly taxing both machines and human labourers equally). Corporations will no doubt resist such a system(I suspect even those corps that would be net beneficiaries of shifting from income to a general corporate tax would resist) because they've bought into the idea that the official target of a tax is the one that pays it, just like everyone else. I rank it third in terms of likelihood of being implemented and third in desirability.

4)"Asset taxes". Be they full blown wealth taxes, increased land taxes, or indirect wealth tax through inflation. I rank it fourth in terms of likelihood of being implemented(except the inflation option, which is probably a joint first), and variable in terms of desirability(land taxes would be the most desirable policy response, inflation the least).
 

[Formerly Californian Tony]

Agree, of course. It is evident to anybody who looks back to the last five centuries that technological progress is ultimately economically beneficial.

[opebo]

It is fine as long as the State redistributes the bulk of the gains to those who are harmed. 

[Sibboleth]

These things are always more complicated than that.

[Sibboleth]

For example, and this is an issue people tend to forget or just not know about, technological change can actually make certain jobs significantly more dangerous. The classic case is pneumoconiosis in the coal industry, which was pretty much a direct consequence of technological advancement.

[NSA is just two letters away from NSDAP]

It is fine as long as the State redistributes the bulk of the gains to those who are harmed.