Question on economics as it pertains to JOBS and the Great Depression

[nodeal]

I was having an argument with a friend over "jobs". He was saying how technological advancement, to a certain extent, is bad for the economy when it puts people out of work. Examples would be a machine that makes coats, putting tailors that make them by hand out of work; or a computer that causes an office's record keeper to lose his/her job, etc. etc.

Having read up on Hazlitt and others, we all know that this is false, since new technology employs new people, lowers production costs, causes net economic gains, and so forth.

Anyway, his talking points boiled down to this: the industrial revolution caused the great depression since the technological advancement that occurred during that time put many workers out of work. I had never heard this before. It sounded pretty absurd, but I'm always open to a new interpretation of history. What I want to know from all of you is: from a libertarian standpoint, what were the causes of the great depression? Was the Industrial Revolution a contributing factor? Does my friend's statement have ANY credibility?

Oh and just to throw this in there... he also claims World War 2 ended the Great Depression. Any insight on this?

[ClayTrainor]

I was having an argument with a friend over "jobs". He was saying how technological advancement, to a certain extent, is bad for the economy when it puts people out of work. Examples would be a machine that makes coats, putting tailors that make them by hand out of work; or a computer that causes an office's record keeper to lose his/her job, etc. etc.

Having read up on Hazlitt and others, we all know that this is false, since new technology employs new people, lowers production costs, causes net economic gains, and so forth.

Exactly! Technology simply free's up capital for further production and investment. This doesn't destroy jobs, any more than using a power screwdriver destroys jobs for people who use manual screwdrivers. It simply makes the labour more efficient and productive, which is a good thing for the economy!

We could have full employment tomorrow, if we get rid of all of our advanced tools and had do all the labor with our bare hands, but that would not boost the economy.


Oh and just to throw this in there... he also claims World War 2 ended the Great Depression. Any insight on this?

That position is a clear example of the Broken Window Fallacy.


http://www.youtube.com/watch?v=gG3AKoL0vEs

Breaking a window is destructive, not productive and the same can be said about War, but on an even greater scale. Capital that could've been used for infrastructure, businesses, charity etc. is put towards tanks and bombs that were used to blow up capital and human lives around the world. It is truly perverse logic to imply that wars are economically beneficial.

If your friend truly believes wars are economically productive, I would ask him how blowing up his house with everything he owns in it would be helpful to the economy....

[matt0611]

It may hurt the people that are directly put out of work in the short run, but it dramatically helps society as a whole in the long run.

If your friend had any point, how does he explain how our economy is so much more advanced and our quality of life is so much better than 250 years ago?

His argument doesn't pass the smell test.

[oyarde]

There were five unemployed people for every new job during the Depression . Now there are six.