(translation 4 march 2014; “Terug naar excessen van vroeg-industriële tijd of naar geleide welvaartsverdeling?”)

One of the consequences of technological innovation is, not as you might think, the simple service and manual work is replaced but rather that “middle class” jobs are replaced. Bernard Condon and Paul Wiseman argue this convincingly AP IMPACT: Recession, tech kill middle-class jobs.:

Millions of middle-class jobs have been lost in developed countries the world over.

Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What’s more, these jobs aren’t just being lost to China and other developing countries, and they aren’t just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers. They’re being obliterated by technology.

Technological innovations have been throwing people out of jobs for centuries. But they eventually created more work, and greater wealth, than they destroyed. Ford, the author and software engineer, thinks there is reason to believe that this time will be different. He sees virtually no end to the inroads of computers into the workplace. Eventually, he says, software will threaten the livelihoods of doctors, lawyers and other highly skilled professionals.

Many economists are encouraged by history and think the gains eventually will outweigh the losses. But even they have doubts.
“What’s different this time is that digital technologies show up in every corner of the economy,” says McAfee, a self-described “digital optimist.” ”Your tablet (computer) is just two or three years old, and it’s already taken over our lives.”

At the same time, we see through the same and ever accelerating innovation a looming potential of large labor productivity growth in front of us. The work can literally be done by fewer people to create the same amount of goods and services, or social welfare.

Our economic / political system is based on a real middle class. If this group is compromised, the question is how the distribution of wealth can come without disturbing the established social balances drastically. As long as our system is based on work = income = share-in-the-wealth competition and tensions in the labor market will continue to grow. In an extreme degree that would create the same circumstances that led to great excesses in the labor market In the early industrial era.

John Evans in Get Ready To Lose Your Job | TechCrunch:

Moore’s Law has finally escaped the confines of the tech sector; as a result, our world is no longer changing linearly, and what’s more its rate of change is increasing; but Kurzweil’s would-be exponential growth is still damped down by the enormous technological barriers outside of the relatively simple world of semiconductors, by regulatory restrictions, and by simple human unwillingness to change that fast.

But in the interim, until we retool our societies around these new technologies and new economic realities, the next few decades will be extremely difficult for many people who have grown accustomed to thinking of themselves as middle class. Not everyone can become a computer programmer, genetic counselor, or startup CEO; a whole lot of Mead’s “ordinary people” will be stripped of their jobs and left behind in debt, poverty, and despair. No wonder the rich and skilled are doing their level best to entrench themselves at the top of our soon-to-be-rapidly-narrowing economic pyramid.


Anyhow adjustment to new equilibria in the short and medium-term will be associated with frictions. It will hitting (randomly) unsuspecting individuals. (Note: It is doubtful that if labor as a means to get access to wealth really will impoverise the aggregated demand can muster sufficient demand for the goods and services produced. This would feed the negative spiral heading us into a tailspin.

A longer-term solution could be that there is a – do not get scared for the word – “controlled” distribution of wealth. Where the available work, and the available wealth is distributed differently than it is today. The chance of this is small imo. In any case, we are heading for to a “Bumpy Ride” Hold on tight!

It’s good that people are not equipped to observe long term change well, otherwise it could turn into massive social unrest.

UPDATE 28/03/13
Additional reading How the internet is making us poor