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Friday, February 12, 2010

They Replaced Horses, Didn't They?

Nick Rowe wonders "why human labor didn't go the same way as horse labor":

Of horses and men, by Nick Rowe: As a teenager I read Kurt Vonnegut's novel Player Piano. It's stuck in my economist's mind ever since. It describes life in the near-future when technology and machines have destroyed the demand for nearly all human labor, except for the labor of a small, highly-educated minority. The vast majority of the population would be unemployed, but for government make-work projects.
The book was published in 1952, so Vonnegut's near-future is our recent past. It didn't happen. But could it happen?
You can try to answer that question by playing with production functions... Or you can think about horses.
When horse-power became cheaper than human-power, horse labor replaced human labor. When steam-power in turn became cheaper than horse-power, horses in turn became replaced. The demand for horse labor rose, then fell. If the population of horses had kept growing at the same rate as the population of humans, most horses now would be redundant, with just a small elite minority of horses employed in very special jobs. Improving technology did in fact drastically reduce the demand for horse labor. If Kurt Vonnegut's novel had been about horses, it would have been a historical novel, not science fiction.
It happened to horses; why couldn't it happen to humans?
It's true that humans own the means of production (including their own labor, and horses' labor), and horses don't. That's important, because humans will therefore (at least in aggregate) reap the increased income from any increased output, even if human labor no longer has value. But for a human who owns only his own labor, that is little consolation.
New technology destroyed the demand for the labor of horses. There is nothing that makes it impossible for new technology to destroy the demand for the labor of humans. It hasn't happened yet, but it might. What's surprising, or what ought to surprise us, is that it hasn't happened yet. ...
The only reason I can think of why Kurt Vonnegut's novel never came true, why human labor didn't go the same way as horse labor, is this: humans are a lot more versatile than horses.

Will human versatility always be enough to dodge and weave around all possible changes in technology, forever? I doubt it. Forever is a long time.

Sort of reminds me of this.

    Posted by on Friday, February 12, 2010 at 12:25 AM in Economics, Technology | Permalink  Comments (76)


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